Bonus amendment
Mahesh Agarwal
(Querist) 08 February 2017
This query is : Resolved
Dear Sir,
I am a contractor. I had executed a work in a PSU from 01.04.2014 to 31.03.2016. During that period Bonus payment ceiling was limited to Rs.3500/- and I had paid the bonus accordingly.
With an extraordinary Gazette dated 01.01.2017 the Bonus act has been amended as follows
An Act further to amend the Payment of Bonus Act, 1965.
BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:—
1. (1) This Act may be called the Payment of Bonus (Amendment) Act, 2015.
(2) It shall be deemed to have come into force on the 1st day of April, 2014.
2. In section 2 of the Payment of Bonus Act, 1965 (hereinafter referred to as the principal Act), in clause (13), for the words ‘‘ten thousand rupees’’, the words ‘‘twenty-one thousand rupees’’ shall be substituted.
3. In section 12 of the principal Act,—
(i) for the words ‘‘three thousand and five hundred rupees’’ at both the places where they occur, the words ‘‘seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher’’ shall respectively be substituted;
Sir, in my tender there was a condition which reads as follows -
‘It is imperative for each Tenderer to acquaint himself of all local laws, conditions and factors which may have any effect or bearing on the execution of works and supplies under the Scope of this Tender.
The Tenderers are required to familiarize themselves with (but not limited to)
The Income Tax Act, 1961, Indian Companies Act, 1956,
Indian Customs Act 1962, Factory Act 19
Arbitration Act
Contract Labour (regulation and abolition) Act 1970, / Factory Act
E P.F. Act 1952, / ESI Act
Workmen Compensation Act 1927,
Minimum Wages Act 1948 / Payment of wages Act / Gratuity Act.
Child Labour (Prohibition and Regu
Other related Acts and Laws and Regulations of India, with their latest amendments as applicable.
Sir, I had paid the Bonus to the workers @ Rs. 3500/- per year.
Sir, the Principal employer is asking me to pay the arrears of Bonus wef 01.04.2014 as per the notification. They are not releasing my Security deposit until I pay the arrears of Bonus.
Sir, kindly let me know that –
1. Whether I am liable to pay the arrears of bonus as per the amendment of Bonus act and the tender condition.
2. Whether the arrears should be reimbursed to me by the Principal employer if it is paid by me.
3. Whether any case has been filed in any Court regarding reimbursement of Bonus and any order has been passed by the Hon’ble Court.
Sir, please help me.
With thanks & regards
Mahesh Agarwal
Guest
(Expert) 08 February 2017
Mr. Mahesh Agarwal,
You are liable to pay the arrears of bonus, as per the amended Act.
The principal employer is liable to reimburse the amount of enhanced bonus.
Further, why there be any need to go to court? Pay the enhanced amount of bonus and claim the same as part of the contract amount from the principal employer, as the statutory conditions apply on him also through your contract agreement, as a part of contract.
However, if the principal employer denies reimbursement of the amount of enhanced bonus, you may refer the case to the arbitrator, as per the arbitration clause, as would have been the part of your contract agreement.
Rajendra K Goyal
(Expert) 08 February 2017
May proceed as advised by the expert P.S. Dhingra.
Guest
(Expert) 08 February 2017
Thanks for endorsing my views.
Ms.Usha Kapoor
(Expert) 09 February 2017
i FULLY ENDOSRE THE VIEWS OF PS.DHINGRA.
Guest
(Expert) 09 February 2017
Usha ji,
Thanks for endorsing my views.
Mahesh Agarwal
(Querist) 09 February 2017
Dear Sir,
I am very much thankful for your valued suggestion/views.
Sir, I had already asked the principal employer to give a confirmation regarding reimbursement of arrears of Bonus prior to my paying the same. I had requested that this is a part of contract but they are denying for the reimbursement.There is an arbitration clause in the contract but it is not possible for me to opt for that.
Sir, I am not interested in going to Court, I was asking whether any organization or contractor had approached the court and any order has been passed by the Hon’ble Court which may benefit me.
Sir, there is a clause in the contract for Price Variation whenever there is any increase/decrease in wages
‘The following Price Variation Clause will be applicable whenever there is a revision in Minimum Wages by Govt. of India.
Pr = Po (0.25 + 0.75 x MWr / MWo)
Pr = Revised Rate as on the date of Minimum Wages Rate Revision.
Po = Rate finalized in the Tender.
MWr = Revised minimum wages as applicable on the date of Revision ofMinimum Wages (Simple Average of Highly Skilled, Skilled, Semi Skilled &Unskilled)
MWo = Original minimum wages of Skilled, Skilled, Semi Skilled,Unskilled.
For Escalation/De-escalation of rates, the average of escalation/de-escalation in Minimum Wages for Highly Skilled, Skilled, Semi skilled and Unskillednotified for “Construction or Maintenance of Roads or Runways or in BuildingOperations” will be considered / applicable and the Escalation/De-escalationwill be applicable whenever there is a rate revision by Govt. during the currency of Contract. For this purpose, minimum wages declared by the Government Of India, Ministry of Labour, Office of TheCommissioner (Central) as notified for Construction or Maintenance of Roads or Runways or in Building Operations applicable to the respective State, where the Plant is situated. Any change in Minimum Wages prior to finalization of Contract shall be considered while issuing the Contract on receipt of Circular on increase/decrease of the
Minimum Wages. Tender Ranking shall be decided on the basis of offered Rate in the Price Bid.’
Sir, the payment of arrears of Bonus is a huge burden on me which I had not taken into account at the time of tender.
Please help me so that I may be able to make pressure on the Principal Employer for the reimbursement.
With thanks & regards
Mahesh Agarwal
Guest
(Expert) 09 February 2017
No written confirmation is needed, that is mandatory for the authorities to reimburse the subsequent enhancement of rates on any future date. They are liable to make payment according to the amended Act.
You can't approach the court without going for the arbitration as per the agreement.
For any further guidance on the issue your contract agreement as well as the orders of the authorities are required to be examined in detail,
Guest
(Expert) 10 February 2017
Usha ji,
Thanks for endorsing my views.
