In what could be seen as a christmas gift to the many of industrial workers earning up to `21,000 wages a month, Parliament on Wednesday passed the Payment of Bonus (Amendment) Bill doubling both the bounty calculation ceiling as well as the eligibility limit to `7,000 and `21,000, respectively.
The benefit would come into effect from April 1, 2014. It would be applicable to all establishments with 20 or more employees. The Bill was passed in Lok Sabha on Tuesday and got the nod of the Upper House by a voice vote on Wednesday.
Terming the amendment as “historic”, labour and employment minister Bandaru Dattatreya said, “This showcases the resolve of the government to ensure job security, wage security and social security for the workforce of the country to realize the vision of Make in India, Skill India and Digital India.”
The government had a lot of deliberations with both the employers as well as the employee association during the drafting stage of the amendment Bill. While industry associations were demaning exempting sick units from the requirement of paying bonus, trade unions have pitched for removal of the ceilings as “profits are not capped”.
The revision of the bonus eligibility and the amounts are generally done by factoring in the relevant price increases, the gauge used being the consumer price index-industrial workers or CPI(IW).
The Payment of Bonus Act, 1965, is also applicable to every factory and other establishments in which 20 or more persons are employed on any day during an accounting year. The last amendment to the eligibility limit and the calculation ceiling was carried out in 2007 and made effective from April 1, 2006.
The amendment of the 1965 Act for increasing wage ceiling and bonus calculation ceiling was one of the assurances given by the Centre after 10 day central trade unions went on one-day strike on September 2.