AIOE says bonus payment issue not discussed with govt

All India Organisation of Employers' (AIOE), an allied body of the industry chamber FICCI, today said the issue related to enforcing the Payment of Bonus Act retrospectively from April 1, 2014 was not taken up during its consultations with the government and unions.
AIOE President Sanjay Bhatia has approached Labour Minister Bandaru Dattatreya regarding the prospective implementation of the Payment of Bonus (Amendment) Act 2015, FICCI said in a statement.
"Besides the fact that enforcing the amended legislation with retrospective effect had never been discussed in the tripartite discussion, which is the cornerstone of Indian labour policy, industry is facing severe problem in implementing the amended legislation," it added.

The Labour Ministry holds tripartite consultations with the trade unions and the employers to thrash out bottlenecks and reservations regarding various bills and policies.
The Payment of Bonus (Amendment) Bill, 2015 was passed by Parliament during the recently concluded Winter Session.
It provides for enhancing the monthly bonus calculation ceiling to Rs 7,000 per month from the existing Rs 3,500. It also enhances the eligibility limit for payment of bonus from Rs 10,000 per month to Rs 21,000 per month.

The recommendation by the organisation says that firms have closed their account books for the year 2014-2015 on March 31, 2015, setting apart the amount of bonus out of the allocable surplus as per the practice.

The amount so set apart is adequate and proportionate to the commitment/agreement with the unions, according to which bonus has been distributed and taxes paid.
"Now, re-opening the account books and enhancing the amount of bonus would upset the entire exercise, disturbing other financial commitments," it added.
While, discussing the minimum bonus and coverage, though employer representatives fully cooperate, despite having reservations on both the counts, the government overlooked this practical difficulty in implementation, which is unjustifiable and inequitable, it said.
"It is therefore, requested to enforce the amendment with prospective effort i.E. From the financial year 2015-16," it has suggested.

Secondly, by amending section 12 of the existing legislation, salary or wage of an employee for the purpose of calculating bonus is to be taken either Rs 7000 or the minimum wage of the scheduled employment, as fixed by the appropriate government, whichever is higher.
The net impact of this amendment will be that a corporate or industry having operations in more than one state will have to distribute different amount of bonus in each state, opening a flood gate for disputes. The provision therefore, needs to be revisited, AIOE said.