Retrospective applicability of Bonus Bill rattles MSMEs
Updated: Dec 26, 2015 04:13:29pm
New Delhi, Dec 26 (KNN) The Payment of Bonus (Amendment) Bill 2015 passed by the Lok Sabha on 22nd December 2015 has created quite a stir in the industry.
The Bill, awaiting assent of the President of India, is slated to be become effective retrospectively on the first day of April 2014.
“The applicability of this Act with retrospective effect will have disastrous effect upon industry, particularly MSMEs. Many industries who have already paid bonus by way of ex-gratia or performance bonus or under any other nomenclature, will now be required to pay statutory bonus also’, says Dr. Sangam Kurade President of Federation of Indian Micro and Small & Medium Enterprises (FISME) .
“This will cause enormous administrative difficulties and will invite harassment from the Labour Inspectors”, he said.
According to Labour Law expert Mukesh Saxena, the employees who have already received bonus calculated on their maximum wage as Rs. 3500/- will have to be paid arrears of bonus treating their maximum wage to be Rs. 7000/- per month or the minimum for their category of employees, subject to the provisions of the Act.
In section 2 of the Payment of Bonus Act 1965 in clause (13) in place of the words “ten thousand rupees”, the words “twenty-one thousand rupees” are substituted.
“It means that the employees who are getting basic wage and dearness allowance of up to Rs. 21,000/- per month and are performing the jobs as defined in the Payment of Bonus (Amendment) Bill 2015, shall be entitled to be paid bonus under the Act 1965”, he explained.
Further, the words ‘three thousand five thousand rupees; have been substituted with the words ‘seven thousand rupees’ or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher’.
It means that from 2014-15, the calculation of bonus will be done on Rs. 7,000/- or the minimum wage of that category, whichever is higher. However, it should be clarified that section 12 applies to employees whose salary of wage exceeds Rs. 3500/-, which is now substituted by Rs. 7000/-.
The national MSME federation, FISME is to urge the President to consider applicability of the Act prospectively. (KNN/ AB)
The Bill, awaiting assent of the President of India, is slated to be become effective retrospectively on the first day of April 2014.
“The applicability of this Act with retrospective effect will have disastrous effect upon industry, particularly MSMEs. Many industries who have already paid bonus by way of ex-gratia or performance bonus or under any other nomenclature, will now be required to pay statutory bonus also’, says Dr. Sangam Kurade President of Federation of Indian Micro and Small & Medium Enterprises (FISME) .
“This will cause enormous administrative difficulties and will invite harassment from the Labour Inspectors”, he said.
According to Labour Law expert Mukesh Saxena, the employees who have already received bonus calculated on their maximum wage as Rs. 3500/- will have to be paid arrears of bonus treating their maximum wage to be Rs. 7000/- per month or the minimum for their category of employees, subject to the provisions of the Act.
In section 2 of the Payment of Bonus Act 1965 in clause (13) in place of the words “ten thousand rupees”, the words “twenty-one thousand rupees” are substituted.
“It means that the employees who are getting basic wage and dearness allowance of up to Rs. 21,000/- per month and are performing the jobs as defined in the Payment of Bonus (Amendment) Bill 2015, shall be entitled to be paid bonus under the Act 1965”, he explained.
Further, the words ‘three thousand five thousand rupees; have been substituted with the words ‘seven thousand rupees’ or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher’.
It means that from 2014-15, the calculation of bonus will be done on Rs. 7,000/- or the minimum wage of that category, whichever is higher. However, it should be clarified that section 12 applies to employees whose salary of wage exceeds Rs. 3500/-, which is now substituted by Rs. 7000/-.
The national MSME federation, FISME is to urge the President to consider applicability of the Act prospectively. (KNN/ AB)
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