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The Payment of Bonus (Amendment) Act, 2015

The present enactment, namely, The Payment of Bonus (Amendment) Act of 2015 (Act no. 6 of 2016) was enacted as the Act of Parliament with the aim and object to amend the provisions of the Principal Act in the payment of Bonus relation. The Principal enactment, i.e. The Payment of Bonus Act of 1965 (Act no. 21 of 1965) was enacted to make provisions for the payment of bonus to the persons who are found employed in certain establishments and such bonus will be paid on the basis of profits or on the production or productivity basis. Moreover, the present Amending Act was firstly introduced as a Bill in the Lok Sabha on December 7th of the last year, i.e. 2015. There after the Rajya Sabha had passed it on December 23rd of the same year. And on December 31st, 2015 this Act was given assent by the honourable President of India and it was published in the Official Gazette in the first month of 2016. Moreover, the present Amending Act is brought into force retrospectively, from the year 2014 (April 1st). And this Amending law is containing only Four Sections.

The present Amending Act is as such offering first provision which is introductory in nature and offering the short title and commencement of this enactment as already have discussed in the earlier paragraphs. Moreover, from section 2 to section 4 this enactment is offering amending provisions. The first Amending provision, i.e. Section 2 of this Amending Act speaks for the amendment of the clause (13) of the Section 2 of the Principal Act. Said clause in the Principal enactment is offering the definition to the terms ‘employee’ and it was contemplated in the same that the employee means any person who is employed on a salary or wage not exceeding Rs 10,000 per mensem in any industry for doing any skilled or unskilled manual, supervisory, managerial, administrative, clerical or technical work for hire or reward either in the express or implied terms of employment. The mention occurs in this definition, of Rs. 10,000 is sought to be amended to replace with the words ‘Twenty- one thousand rupees’, by this present Amending Act. As such, the present Amending Act has enhanced the eligibility limit for payment of bonus from the salary or wage of an employee from Rs. 10,000 per mensem to Rs. 21,000.

Secondly, the section 3 of the Amending Act amends the provision contained under section 12 of the Principal Act. The said Section 12 of the Principal Act was providing for bonus calculation in relation to the certain employees (for factory workers and also for the workers in the establishments having 20 or more workers). The wage ceiling for the calculation of such workers bonus under the Principal enactment was provided to Rs. 3500 per mensem, but now the present Amending law’s section 3 is requiring the enhancement of such ceilings from Rs. 3500 per mensem to Rs. 7000. As such the wage ceiling is doubled with this provisions introduction.

It was found that present to the introduction of this Amending Act’s concerned Bill, there were several representations received from by the Central Government from the Individuals, Trade Unions and also from various Associations where they claim the enhancement of the Bonus and also they claim the removal of the earlier ceilings. In result to this, the present Amending Act was enacted.

Moreover, this present Amending Act is also imposing a single more barrier on the part of Central Government. While the section 38 of the Principal enactment is empowering the Central Government to make rules for carrying out the purpose and effect of this enactment, the present Amending Act is imposing a condition precedent in this connection by inserting the new Sub- section (1) against the existing Sub- section (1) in the said section 38. This Condition is requiring the Central Government to previously publish any such rules which it seeking to made under the concerned provision, under this Act.

Adv. Faim Khalilkhan Pathan