SCOPE OF SECTION 32(5)(c) OF THE PAYMENT OF BONUS ACT, 1965
KAUSHIKI RANJAN
Students of CHANAKYA NATIONAL LAW UNIVERSITY
Best Citation – KAUSHIKI RANJAN, SCOPE OF SECTION 32(5)(c) OF THE PAYMENT OF BONUS ACT, 1965, 1 ILE LLR 23, 2022
Abstract
The term ‘bonus’ has not been defined anywhere in the Payment of Bonus Act, 1965. However in a layman’s language ‘bonus’ refers to cash payment which is paid in addition to wages. It’s not like an ex gratia payment [1] but more like a reward that is paid to employee for his productive work towards the organization.
The basic purpose of bonus was to bridge the gap between minimum wages and living wages. Additionally, bonus is given to share the profit earned by the firms amongst the employees and staff members.[2] The concept of bonus was introduced for the first time in July, 1917, at that time it was known as war bonus. It was first time paid to the employees of textile industry in India wherein certain textile mills was granted 10% of wages as war bonus to their employees.[3]
Afterwards in the year 1965 a principle legislation was enacted in India related to the procedure of payment of bonus by the name “Payment of Bonus Act, 1965.” Later, The Code on Wages, 2019, also known as the Wage Code, was formulated by Parliament which consolidated the provisions of four labour legislation concerning wage and bonus payments. In this research paper, the researcher will be specifically dealing with the Scope of Section 32(5)(c) of Payment of Bonus Act 1965 and for this purpose the research paper has been further differentiated under four folds. The first-fold briefly explains the background or historical perspective behind the Payment of bonus Act 1965. The second-fold briefly analyze Section 32 of the Bonus Act which specifically deals with those institutions who are exempted from paying bonus to their employees. The third chapter briefly analyze whether hospital has to pay bonus to their employees or not and the last but not the least critically analyze whether profit making is an essential element for determining the non applicablity of non applicablity of section 32(5)(c) of the act.
[1] Niharika Sakshi, https://www.linkedin.com/pulse/history-bonu-india-niharika-sakshi,(last visited 3rd March, 2022).
[2] https://paycheck.in/labour-law-india/work-and-wages/bonus-payment/bonus-payment(last visited 3rd March, 2022).
[3] Payment of Bonus Act, 1965.