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 Every employee of an establishment covered under the Act is entitled to bonus from his

employer in an accounting year provided he has worked in that establishment for not less than
thirty working days in the year on a salary less than Rs. 3,500 per month. [Section 2(13) read
with Section 8].
If an employee is prevented from working and subsequently reinstated in service, employee’s
statutory liability for bonus cannot be said to have been lost. Nor can the employer refuse for
such bonus. [ONGC vs. Sham Kumar Sahegal [1995] 1 LLJ].
There are, however, certain disqualifications of an employee to claim bonus in an accounting
year. An employee who has been dismissed from service for (a) fraud; or (b) riotous or violent
behaviour while on the premises of the establishment; or (c) theft, misappropriation or
sabotage of any property of the establishment is not entitled for bonus. [Section 9]
An employee in the following cases is entitled to bonus :
(i) A temporary workman is entitled to bonus on the basis of total number of days worked by
(ii) An employee of a seasonal factory is entitled to proportionate bonus and not the minimum
bonus as prescribed under Section 10 of the Act.
(iii) A part time employee as a sweeper engaged on a regular basis is entitled to bonus.
[Automobile Karmchari Sangh vs. Industrial Tribunal [1970] 38 FJR 268].
(iv) A retrenched employee is eligible to get bonus provided he has worked for minimum
qualifying period. [East Asiatic Co. (P.) Ltd. vs. Industrial Tribunal [1961] 1 LLJ 720].
(v) A probationer is an employee and as such is entitled to bonus. [Bank of Madura Ltd. vs.
Employee’s Union, 1970, (2) LLJ (21)].
(vi) A dismissed employee reinstated with back wages is entitled to bonus. [Gannon India
Ltd. vs. Niranjan Das [1984] 2 LLJ 223]
(vii) A piece-rated worker is entitled to bonus. [Mathuradas Kani vs. L.A. Tribunal AIR, [1958],
SC 899].
An employee in the following cases is not entitled to bonus :
1. An apprentice is not entitled to bonus. [Wheel & RIM Co. vs. Government of T.N. [1971] 2
LLJ 299 40 FJR 18].
2. An employee employed through contractors on building operation is not entitled to bonus.
(Section 32).
3. An employee who is dismissed from service on the ground of misconduct as mentioned
in Section 9, is disqualified for any bonus and not merely for bonus of the accounting year in
which he is dismissed (Pandian Roadways Corporation Ltd. vs. Presiding Officer [1996] 2 CLR 1175 (Mad.).

Published by

dheeraj kr singh
Category Corporate Law   Report

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