Payment of Bonus Act, 1965

Learning objectives

After reading this chapter, you will be able to understand:

  • Application of Bonus Act
  • Allocable surplus and available surplus
  • Eligibility for bonus and calculation of days
  • Minimum and maximum bonus
  • Set on and set off of allocable surplus

The practice of paying bonus in India appears to have originated during the First World War when certain textile mills granted 10% of the wages as war bonus to their workers in 1917.

In 1950, the Full Bench of the Labour Appellate evolved a formula for the determination of the bonus. A plea was made to raise that formula in 1959. At the second and the third meetings of the Eighteenth Session of the Standing Labour Committee held in New ...

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