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3. Payment of bonus act

4. Is it necessary to pay bonus? Yes, you are bound to pay to every employee in respect of any accounting year a minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee during the accounting year or one hundred rupees whichever is higher

5. By what time can you pay bonus ? the bonus should be paid within a period of eight months from the close of the accounting year (in case you are paying bonus after the award / judgement / dispute settlement – within 1 month of the judgement)

6. How is bonus calculated ? It is calculated on profit – using a formula given in the act. However, you can evolve and operate a scheme of bonus payment linked to production or productivity in lieu of bonus based on profits

7. Should bonus be paid to those workers also - who disobey company orders ? No, If the employee has done something illegal or if he is dismissed from service for fraud; or riotous or violent behaviour while on the premises of the establishment; or theft, misappropriation or sabotage then you dont have to pay him bonus. (read sec. 9 for details)

8. Can you recover penalty from employee from bonus payable ? Yes – read sec. 18 for details you can deduct the amount of loss / penalty from the amount of bonus payable

9. What is available surplus ? You have to calculate available surplus – in order to pay bonus (and this is very complicated). Available surplus is gross profit after providing some deductions as per sec. 6 & schedule I, II, & III of the act

10. Available surplus ... Schedule I – process of gross profit for Banking companies Schedule II – gross profit for other companies Deduct : 1. depreciation 2. development rebate 3. direct tax 4 deductions under Schedule III Dont deduct : 1. last losses, 2. last depreciations 3. .

11. EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952

12. Schemes implemented under this law ... Employees’ Provident Funds Scheme, 1952 Employees’ Deposit Linked Insurance Scheme, 1976 Employees' Pension Scheme, 1995

13. Is this law applicable on all units ? No, it is applicable on factories and other classes of establishments engaged in specific industries, classes of establishments employing 20 or more persons. If you are employing less than 20 persons, this law is not applicable on your unit. (Central govt. Can apply this act by giving 2 month notice on your unit also)

14. If you have less than 20 employees, can you still join these funds ? Yes, you can join voluntarily (mutual consent of the employers and the majority of the employees) under Section 1(4) of the Act.

15. Is it compulsory on all employees to join these funds ? No – but it is compulsory for employees drawing a pay not exceeding Rs. 6500 per month

16. What about those drawing > 6500 per month at the time of joining ? It is at the option of the employer and employee (they may join or may not join)

17. Why have these funds been created ? These funds are created out of contributions of employer and employees. These funds are provided to employees as monetary assistance when they are in distress and/or unable to meet family and social obligations

18. What will happen if employees leaves / resigns / switches over to a new company ? The funds of the employee are transferred when he leaves his employment and obtain re-employment in another establishment to which this Act applies. If the employee so desires, the funds will be transferred to the credit of his account in the Fund or as the case may be, in the Provident Fund of the establishment in which he is re-employed.

19. Pension – when will the employees get ? Minimum 10 years contributory service is required for entitlement to pension. Normal superannuation pension is payable on attaining the age of 58 years.

20. Is pension payable on resignation? No, Pension is payable in following cases : (a) Superannuation on attaining the age of 58 years; (b) Retirement; (c) Permanent total disablement; (d) Death during service; (e) Death after retirement/ superannuation/permanent total disablement; (f) Children Pension; and (g) Orphan pension

21. How much pension will I get, if I superannuate after 12 years of service and my pensionable salary is Rs 7000? Th formula is : (pensionable salary) * (Years of service (min. Is 20) + 2) /70 =(7000* 22) / 70 =2200 per month. Now 8 years' service is still left, so reduct 8*3% = 2200*.76 =1572 per month Answer

22. WORKMEN’S COMPENSATION ACT, 1923

23. What is the object of this law? The act fixes the liability for compensation in case of occupational disease or personal injuries of employee on employer and and prescribes the procedure of this compensation payment

24. When can compensation be demanded on accident / injury etc? The accident / injury / disablement / disease must be raised out of and in the course of employment.

25. What is the difference between accident and injury ? Accident means an untoward mishap which is not expected or designed by workman, ‘Injury’ means physiological injury. Suppose a workman falls from the ladder and suffers injuries (accident caused injury). But accident may be an event happening internally to a man and in such cases accident and injury coincide. (case : Smt. Sunderbai v. The General Manager, Ordinance Factory Khamaria, Jabalpur, 1976 )

26. Can an employer make a contract with employee not to pay compensation? No any contract or agreement whereby a workman relinquishes any right of compensation from the employer for personal injury arising out of or in the course of the employment shall be null and void (sec 17)

27. What is the time limit for making notice & claim to the commissioner for compensation? The worker / his representative must make notice and then claim as soon as possible. It has to be made within two years (maximum duration) of the occurrence of the accident or, in case of death, within two years from the date of death. (Section 10)

28. What to do if the company becomes insolvent ? If the company is having insurance for workers' compensation, the worker must give notice of accident and resulting disablement therefrom to the insurers as soon as possible after he becomes aware of the insolvency or liquidation proceedings. As per sec. 530 of the Companies Act, 1956, the compensation will be paid in priority to all other debts at the time of insolvency settlement.

29. Should the employer submit a report to commissioner, even if there is not responsibility of employer on accident? Yes : If the employer is of opinion that he is not liable to deposit compensation, he must submit the grounds on which he disclaims liability.

30. Is it necessary for worker to get medical examination? Yes - before the expiry of 3 days from the time he had sereved a notice on employer about accident.

31. What are the powers of commissioner of workers compensation (appointed by state goverment)? He will have the powers of a Civil Court under the Code of Civil Procedure, 1908

32. What is the minimum compensation payable ? In case of accident, minimum compensation will be payable as per Schedule II and III in terms of Section 4 of the Act. In case of death, the minimum amount of compensation fixed is Rs. 80,000 and Rs. 90,000 in case of permanent total disablement. The existing wage ceiling for computation of maximum amount of compensation is Rs. 4000.

33. Is it necessary to inform in case of accident? Yes, as an employer, you have to inform within seven days of the death or serious bodily injury & send a report to the Commissioner giving the circumstances of the death or serious bodily injury in the prescribed form (Form EE of the Workmen’s Compensation Rules: Rule 17)

34. Can compensation be directly paid to the heirs of the deceased person? No The employer cannot make payment of compensation directly to the deceased's legal heirs. Employer has to deposit it to compmissioner. It is the Commissioner who decides on the distribution of compensation to the legal heirs of deceased’s workman. (Section 8)

35. When is an employer not liable to pay compensation? 1. When the injury lasts for less than 3days. 2. When the injury not resulting in death or permanent total disability is due to any of the following reasons: 1. the workman had taken drink or drugs, or 2. the workman wilfully disobeyed safety orders or 3. the workman removes safety devices

36. What is the Theory of notional extension of employment Even if worker leaves the factory, he is still in employement. Compensation can still be demanded. As per this theory, the compensation is payable if accident has arisen in the course of employment, which is not limited to the period of time the workman actually commenced his work and the time he downs his tools.

37. Is employement = work ? No “employment” has a wider meaning than work. A worker may be in course of his employment not only when he is actually engaged in doing something in the discharge of his duty but also when he is engaged in acts belonging to and arising out of it (Union of India v. Mrs. Noorjahan, 1979 Lab. I.C. 652).

38. MINIMUM WAGES ACT, 1948

39. Does this act only give minimum wages payable? No, it also regulates working hours, overtime, weekly holidays and overtime wages. Period and payment of wages, and deductions from wages are also regulated

40. How is minimum wages fixed ? There are 2 methods : 1. committee method 2 notification method

41. What is committee method? The government appoints as many committees and sub-committees as it considers necessary to hold enquiries and advise it in respect of wage fixation or revision

42. What is notification method ? As the name denotes, here the Government publishes a notification in the Official Gazette for the information of persons likely to be affected thereby and specify a date not less than 2 months from the date of notification, on which the wage fixation / revision proposals will be considered