[Repealed by Act 30 of 2001]

Be it enacted by Parliament in the Thirty-sixth Year of the Republic of India as follows :

Prefatory Note Statement of Objects and Reasons. The Payment of Bonus Act, 1965, as originally enacted in 1965, provided for payment of bonus to persons employed in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward and drawing salary or wages not exceeding Rs 1600 per mensem. Section 12 of the Act, as originally enacted, however, provided that where the salary or wage of an employee exceeded Rs 750 per mensem, the bonus payable to him shall be calculated as if his salary or wage were Rs 750 per mensem. This section was omitted by the Payment of Bonus (Amendment) Act, 1985, with a view to securing the computation of bonus payable under the Act in the case of employees drawing salary or wages exceeding Rs 750 per mensem on the basis of the salary or wage actually drawn by them. After the enactment of this Amendment Act, there have been demands that, having regard to the periodic revision of wages of employees and other relevant circumstance, the omission of Section 12 of the Act should be made applicable with respect to bonus payable for the accounting year commencing on any day in the year 1984 and that the eligibility limit for payment of bonus contained in the definition of employee in the Act should be suitably raised.

2. With a view to making available the benefit of the Payment of Bonus (Amendment) Act, 1985 in respect of the accounting year commencing on any day in the year 1984 in relation to employees in all factories or establishments to which the Payment of Bonus Act, 1965 applies, the President promulgated on the 27th September, 1985, in view of the impending festival season, the Payment of Bonus (Amendment) Ordinance, 1985. After the promulgation of the aforementioned Ordinance, Government decided that the eligibility limit for the payment of bonus, as provided for in the definition of employee in the Payment of Bonus Act, 1965, should be raised from Rs 1600 to Rs 2500, subject to the condition that the bonus payable to an employee drawing salary or wages exceeding Rs 1600 per mensem, shall be calculated as if his salary or wages were Rs 1600 per mensem. It was also decided to make these changes applicable in respect of the bonus payable under the Act for the accounting year commencing on any day in the year 1984 and every subsequent accounting year. Accordingly, the President promulgated on the 7th November, 1985, in view of the impending festival season, the Payment of Bonus (Second Amendment) Ordinance, 1985.

3. The Bill seeks to replace the aforesaid Ordinances.