HR MANAGERS AND DEMOCRATIC VALUES  

The professional associations of HR managers are supposed to be the platforms for its members to believe and practice democratic values of equal opportunity and humanism. But some of them are promoting crony selection system coupled with inefficiency and dishonesty, under the blessings of so called HR gurus.

There are three major associations of people involved in human resource management practices in India, namely National Institute of Personnel Management(NIPM), Indian Society for Training and Development(ISTD) and the National HRD Network(NHRD). All of them have registered themselves as charitable societies under the Societies Registration Act and claim tax benefits. All of them have branches all over the country. The branches of NIPM and ISTD do not have to register separately but NHRD branches have to register themselves as societies. By virtue of being registered societies they have got the bylaws by which the office bearers and the executive committee members both at the head office and branch level have to be elected by their members. But there are flaws in the way they practice these democratic norms.

ELECTIONS

ISTD has best practices in regularly conducting elections once in a year both at the national level and at the branches. NIPM does so once in two years at the national level but at many branches the elections are replaced by selection of cronies by cronies. At the NHRD, contrary to its own bylaws selection of cronies by cronies is institutionalised both at the national level and at most of the branches. In this crony practice the existing office bearers will play a pivotal role in selecting the next set of office bearers so that mistakes of outgoing team are buried and sealed by the new team.

FLAWS OF CRONY SYSTEM

Crony system has helped handful of people to remain in the helm of affairs for many many years thereby preventing the infusion of new thoughts for change and development. In fact some of these cronies have pooled funds for investing in HR related consulting and publication companies, and are indirectly sharing vital information of the members with these companies, for personal gains. In fact the pioneers of crony selection system at NHRD are none other than Dr. T.V.Rao and late Dr.Udai Pareek who are revered as HR professors even though they are psychology professors.

WHY ARE THEY OPPOSED TO DEMOCRATIC PRACTICES

Democratic principles require that all the members will have equal; right to contest the election, right to exercise their franchise and all their votes will have equal value, thereby creating equal rights and responsibilities for all its members. But unfortunately the founding members come from Indian families who have lost their power and control over the society due to the introduction of democracy in India after independence in 1947. These families wanted freedom from British rule without universal franchise. Prior to 1947, the eligible Indian voters in general election are (1) those who are owning at least 100 acres of land or those who are graduates. Just 0.3% of the Indian population were meeting this criteria and thus this 0.3% Indians were voting on behalf of 99.7% Indians to elect the government for their convenience.  But the Constitution of India not only provided the right of vote to all its citizens but also gave equal value for their votes irrespective of their socio economic background; apart from the right to contest the elections even to the poor and to the illiterates. As a result the 0.3% Indians lost their control over the government and the society by giving birth to the 3M politics of new age politicians like Maya, Mulayam and Modi.

WHO ARE THEY

Today the people who are opposing democratic system of election and universal franchise in HR associations are neither traditional anti-socials nor the political hooligans. Rather they are the current or past HR heads of India’s most successful private sector organizations like Tatas, Birlas, Reliance,  etc. They represent respectable middle class Indian families   like the Vysas from Andhra to Rajastan, the Brahmins from Tamilnandu  to Punjab, and the Muselmans from Lucknow to Kolkata. They are academically meritorious and have studied in reputed colleges like TISS and XLRI. Since they are afraid of losing elections, they have replaced the statutory election system with crony selection system for the mutual benefit of select few. All the professional associations of doctors, lawyers, or chartered accountants are regularly conducting elections but HR associations like NHRD is an antithesis to democracy. The founders of NHRD –TV Rao, Anil Khandelwal, KK Verma, Kakoli Shah and father Abraham have lot of sympathies for crony selection system by virtue of belonging to 0.3% Indians category.

Seven years ago some like minded members highlighted the irregularities committed by these selected cronies in the purchase of office premises and were forced to shut their mouth by these so called meritorious HR heads who are afraid of elections. Today it is a blown out issue across many parts of India beginning with Delhi Chapter of NHRD. The cronies who have tasted the benefits without having to contest the election are not willing to conduct election as per the approved bylaws. As a result, in the second week of June 2016 all the past presidents of NHRD met in Mumbai, deliberated the developments in detail and finally decided to continue with the crony selection system since it has benefited their elevation as presidents in the past.

BEST PRACTICES IN DEMOCRATIC SYSTEM

After continuous persistence by like minded members the Bangalore chapter of NHRD was registered as a charitable society in the year 2008 under the able leadership of Dr Gopal Mahapatra and Prof. Anuradha Mahesh. But unfortunately Gopal Mahapatra said “since there is no practice of holding election at the chapter level or national level I will not do so even though the registered bylaw requires it”. Finally it was highlighted to him by the members that he will be prosecuted for violation of bylaw, he relented and held the election. Since then election notifications are issued once in two years and elections are held wherever there are more number of contestants than the number of positions. It means all the members of the chapter now are eligible to contest the election, cast their votes and all their vote will have equal value.  It is immaterial since then whether the elected presidents (Mahalingam, Harish Devarajan, Sudeesh Venkatesh and Bala) are from upper caste or lower caste; from one caste or different caste but they command immense respect from all the members by virtue of getting elected through democratic means.

THE FALLACY OF TV RAO AND UDAI PAREEK

Thirty years ago, Prof. T.V.Rao and late Prof. Udai Pareek had formulated the theory that democratic election will kill professionalism and promote the politics of inefficiency. Hence they invented the crony selection system and seeded it across all the chapters of NHRD.  But Bangalore chapter of NHRD for the past eight years has become highly professional both in its philosophy and its practice. Those who have attended the national conference conducted at palace grounds Bangalore under the able leadership of Harish Devarajan and C Mahalingam and those who regularly attend the monthly lectures of NHRD Bangalore chapter can only understand the perpetual professional acclaim achieved by Bangalore chapter. I wish the intellectually honest people embrace democratic norms from now onwards based on Bangalore experiment.

Similar to what T V Rao and Udai Pareek did in NHRD;  Mr.D.R.Nagaraj the founding member of NIPM Karnataka chapter advocated crony election system and prescribed that senior most vice chairman should be unanimously elected to Chairman position of the chapter.  In this system Nagaraj had the right to place the persons of his choice as chairman for many many years. Then a NIPM trust was formed in 1984 to manage the money and properties of NIPM Karnataka chapter and only people belonging to Brahmin and Lingayath community were nominated as trustees. But inefficiencies crept in; the trust deed which was not registered has been assumed to have been registered; income tax exemption was not obtained; trustees were not carrying out trust objectives; the title deeds of the property were lost and trustees were not accountable to anyone. When all these anomalies were detected after thirty years in 2014, by Vice Chairman of the chapter, the powerful group of trustees headed by Nagaraj decided that the practice of elevating the Vice Chairman to Chairman post will not apply and there shall be elections. Yes- in the ensuing election the Vice Chairman was defeated by six votes, but democracy was restored. And, the dominance of NIPM trustees over NIPM office bearers was regulated. Free and fair election was again held in 2016 and a democratically elected team of office bearers have taken charge of the NIPM Bangalore chapter.

Hence it is time to thank the respected Dr.T.V.Rao, late Dr.Udai Pareek and Mr.D. R. Nagaraj who founded the theory of crony selection in lieu of democratic election for creating a compelling opportunity to experiment with successful democratic system. But crony selection practices have spread their strong roots across the country capable of disrupting the democratic process. Only the alert members can save the democratic practices.

OPPRESSIVE BRAHMINICAL ORDER AND CHALLENGING BACKWARD CASTES- NANGELI DIED FIGHTING BREAST TAX

This incident of oppressive brahminical order and challenging backward castes, tells us how miserable the conditions of the poor people in 19^th century. The king of Travancore is remembered for donating gold worth billions to the temple, but not criticised for the dubious methods he used to earn it.    Before the Britishers became Indian rulers, the local Kings of the time ensured the subjugation of the lower castes by imposing heavy taxes on them.

Their wealth was built on some of the worst taxes imposed anywhere in the world. Besides the tax on land and crops, lower castes had to pay taxes for the right to wear jewellery, the right of men to grow a moustache, and even the right of women to cover their breasts. The heavy taxes ensured that the lower castes were kept eternally in debt, while members of the upper castes flourished.

As yet another International Women's Day dawns, the coastal town of Cherthala(Kerala); recollects the extraordinary sacrifice by a young woman about a hundred years ago. Nangeli paid with her life to rebel against a brutal 'breast tax' (mulakkaram) which used to be collected from women if they wished to cover their breasts with cloth in public.

Nangeli, a lower-caste woman, was in her early thirties when she decided not to pay the humiliating tax to the king of Travancore. When the official tax collector repeatedly came to Nangeli's house to ensure she paid up her pending breast tax, she calmly asked him to wait for a while. Nangeli then placed a green plantain leaf on the floor, prayed, lit the holy lamp and then proceeded to chop off both her breasts. 

Her husband Chirukandan came home to find his wife lying dead and mutilated. He is said to have jumped into her funeral pyre out of grief. “The incident happened in 1803. It created a lot of anger and the practice of collecting breast tax was put to an end here by 1812.

The place in Cherthala where Nangeli made her sacrifice is known as Mulachipa rambu, which in Malayalam means 'the land of woman's breasts'. However, with locals reluctant to spell out this name, it is now popularly known as Manorama Kavala.

Maternity leave for surrogate mothers- the boon and the bane

Dr G P Naik

Email naik@talentavenues.com Phone 09243470110

The Delhi High Court on 29^th Jan 2016 ruled in the case of a central government employee that surrogate mothers who have children through surrogacy are entitled to maternity leave which includes pre- and post-natal period. A similar judgement was delivered by the High Court of Kerala in respect of a state government employee on 6^th January 2015.

The earlier rulings of various courts have extended the maternity leave also to working women adopting the child. Therefore now there are three categories of working women eligible for maternity leave namely (1) woman delivering the child after becoming pregnant (2) woman adopting the child of some other woman and (3) woman engaging some other woman to carry her pregnancy, deliver the child and handover the child to her.

Legal aspects

Working women are eligible for 12 weeks (84 days) of maternity leave for child birth under ESI Act 1948 (payable by ESIC) or under Maternity Benefits Act  (payable by employer) as the case may be. The government employees are eligible for up to six months maternity leave under service rules applicable to them. Maternity leave is with full pay. Law makers then, had no inkling that courts will go to the extent of including child adoption and surrogacy for maternity benefit.

Purpose of maternity leave

The primary purpose of maternity leave is to protect the working women from health hazards arising out of pregnancy and child delivery. That is why half of the maternity leave is allowed to be availed before delivery and remaining half to be availed post delivery.

But unfortunately the courts in extending the benefit of maternity leave have ignored the importance of real women who deliver the baby for adoption or who share their womb for surrogacy. The courts, no doubt have delivered justice to one category of working women capable of attaining alternative motherhood without answering large many number of questions.

Who is a surrogate mother?

Surrogate mother is the one who carries in her womb, the progeny of another woman, delivers the baby only to be handed over to the woman who wants to attain alternative motherhood. In the process this hapless woman makes a supreme service to mankind by risking her health and aborting her motherhood feelings.

Unfortunately society has failed to call her as mother, rather she is called as surrogate woman and the other woman who receives the baby without delivering it, is called as mother.

LEGAL CONFUSION

Real mother: If both the women (1) one who carries the other woman’s  progeny in her womb  and (2) the woman who gets the child delivered by another woman,  are working women,   who should get the maternity leave, first woman, second woman or both. Unfortunately the courts are keeping quite on this matter.

Pre-natal leave: Pre-natal maternity leave is for the wellbeing of pregnant woman and the child in her womb.  Why should, an adopting woman or women receiving surrogate child be entitled to pre-natal leave, when she is not carrying the pregnancy, requiring rest and relaxation.

Adopting children older than six months: Even if we assume for the sake of argument, that maternity leave is for child care and not the for care of women who delivered the baby, whether maternity leave should be given to a woman who adopts, a child who is more than six months old. Because the maternity leave has to be availed, for twelve weeks (for industrial employees) or six months (for government employees) has to start at least at the time of child birth and end by the time the child attains three months or six months of age as the case may be.

Death of child: In case of a natural maternity, the woman is eligible for full leave of 12 weeks, even if the child dies, during this 12 weeks/ six months. The courts are not clear, about maternity leave if the adopted or surrogate child dies during this 12 weeks period.

Medical benefits: Whether the woman adopting a child or receiving child through surrogacy is eligible for medical benefits associated with maternity, without having a medical condition to qualify for the same.

Medical benefit for woman who is not your employee: Whether medical benefits associated with maternity can be extended to the woman who is not employed in your organization, but she carries the pregnancy and delivers the baby to fulfil the aspiration of your female employee.

How about working men: Historically maternity benefit is given only to working women and not working men, by assuming that it is the working women who have to deal with their health and medical conditions arising out of pregnancy and child delivery. If the woman who adopt a child or get a child through surrogacy can be given maternity benefit, why not extend it to working men who want to have a child through adoption and surrogacy.

Equality before law: There are lot of working men, not having children for various reasons. Should they not be given the maternity benefit for becoming fathers either through adoption or through surrogacy, failing which the constitutional right of equality before law becomes meaningless?

Women in industrial establishments: Whether the benefits from above judgments can be extended to working women in industrial establishment is a puzzle left to the wisdom of every individual. Legally speaking, both the judgments mentioned above are not applicable to industrial establishments and they are applicable only to government department employees. The court should have extended this judgement to women employed in industrial establishments also, in order avoid hearing another case on the same subject.

Missing link of humanism: Courts are not aware, why any woman agrees to carry in her womb by risking her life and dignity, the baby of and for another woman. Only the women from marginalised sections of the society will take up this job due to compelling circumstances. It is true that no one represented such marginalised women in the above cases, but it would have been fair if courts had looked at this matter. 

If  Rohit  Vemula had not died

I do not know why did Vemula Rohit hanged himself at the University of Hyderabad. Without attributing the motives for his death, let us assume that he is still alive, and examine whether he was meted out injustice, by the Government and the University.

1)      If five dalit students had assaulted the ABVP student leader, then it is a criminal case and the police should have taken action.  Why did the police kept quite?

2)      How was the presence of these five dalit students in the hostel became a threat when they were not a threat in the class room, library and in the entire university campus?

3)      When there is allegation of physical assault against five dalit students, why did the High Court asked the University to take action rather than asking the police to book the case against dalit students.

4)      When ABVP leader Sushil Kumar is the root cause of this incident, why did his mother approached High Court rather than counselling her son?

5)      Staging a play like 'Muzaffarnagar Abhi Baaqi Hain' is the fundamental right of any citizen subject to reasonable restrictions. If playing this drama is illegal, then police should have taken action against dalit students. Why did the ABVP leader Sushil Kumar took law into his hands and caused this entire chain of tragic events.

6)      Why did the the High Court which delivered undue justice to ABVPs Sushil Kumar, did not protect the fundamental right of dalit students for staging a drama.

7)      If Smriti Irani, Bangaru Dattatreya and Appa Rao are honest, why are they not revealing the written correspondence among them in this regard.

8)       If Smriti Irani is honest why did she formed the fact finding committee after the death of the student, rather than doing so earlier to avert this tragedy.

9)      If ABVP is not anti-dalit, then why are they not helping the dalits in trouble?

TWO DAYS WORKSHOP ON

COMPENSATION AND BENEFITS MANAGEMENT

TALENT AVENUES CORPORATION

No. 203, Second Main Road, Brindavan Extension, Arakere Mico Layout,

Bangalore 560 076

Phone. 9243470110 /8050313451/ 9900028300. Email naik@talentavenues.com 

www.talentavenues.com    

TWO DAYS WORKSHOP ON

COMPENSATION AND BENEFITS MANAGEMENT

Date

29-30 Jan 2016

Venue

Atria Hotel, Near Maharani’s Science College, Palace Road, Bangalore 560 009

DELEGATE REGISTRATION FORM

Title of the programme	Two days workshop on Compensation and Benefits Management
Date of the programme	29-30 Jan 2016
Name of the delegate
Email Id of the delegate
Phone No. of the delegate
Name of the organization
Cheque/ DD No.
We prefer online payment of fees. Our bank details are as under.	Name of the Account: Talent Avenues Corporation Account No.32028728271.  IFSC Code: SBIN0014951. MICR Code:  560002179. Account type: Current Account. Bank Name: State Bank of India. Branch Name: Hulimavu, Bangalore.

ABOUT THE WORKSHOP

Managing compensation and benefits is a professionally challenging task. Managers are expected to attract, develop, motivate and retain talented employees by offering best salary and allowances without increasing cost to the company. Best practices in pay also require full compliance to statutory requirements. The employees and employers of today do not want uniform salary for everyone; rather it has to be customized to each and every employee based on his/ her individual needs. Trade unions want that salary should be collectively negotiated with them. This workshop aims to address all such challenges starting from basic issues.

LEARNING OBJECTIVES

By attending this programme you will learn:-

1)      What are the various components of compensation and benefits?

2)      What factors determine the compensation?

3)      What are the differences between managerial and workmen compensation?

4)      How to design incentives, allowances and benefits.

5)      What is CTC and how to distribute it?

6)      What are the statutory requirements like ESI, PF, Gratuity, Minimum wages and Bonus?

7)      How to determine annual increments?

8)      How to conduct wage negotiation with individual employees and with trade unions.

9)      How to increase the take home pay without violating law and without paying more?

10)  How to reduce income tax burden of employees without violating the law?

11)  How to develop low cost compensation models.

12)  How to compensate contract workers.

13)  How to attract, develop, motivate and retain talented employees with pay.

WORKSHOP METHODOLOGY

Participants of this work shop will learn through, lectures, presentations, role plays, and practice sessions to gain hands on experience in handling compensation and benefits management.

PARTICIPANT PROFILE

This programme is suitable for managers and executives in HR, production, IT, operations, finance, accounts, marketing, sales, service and quality control.

PARTICIPATION PROCEDURE

Those who want to attend this workshop are requested to email their nominations to naik@talentavenues.com

FEES

ü  Early bird offer: Rs.7900 per participant if fees along with registration form are received by us on or before 18^th Jan 2016.

ü  Group offer: Rs.7900 per participant if three or more people from same organization are nominated.

ü  Rs.8500 per participant if fees along with registration form are received by us after 18^th Jan 2016.

ü  The fees include the cost of course material, stationery, lunch, tea and applicable taxes. The Cheque / D.D should be drawn in favour of Talent Avenues Corporation payable at  Bangalore. ( We encourage online payment of fee)

PROGRAMME SCHEDULE

Day One
Time	Topics to be covered	Learning activities
09.15-09.30	Delegates registration
09.30-11.00	Understanding the various components of compensation and their features.	Lecture and individual activities
11.00-11.15	Tea
11.15-01.00	Learning statutory aspects of compensation and benefits management.	Lecture, case discussion and  role pay
01.00-01.45	Lunch
01.45-03.15	Variable pay, incentives, allowances, perquisites and benefits.	Team work and presentation
03.15-03.30	Tea
03.30-05.30	Designing customized compensation and benefit packages to attract and retain talented employees.	Lecture, case discussion
Day Two
09.30-11.00	Wage negotiation with individual employees and trade unions.	Lecture and role play
11.00-11.15	Tea Break
11.15-01.00	CTC based compensation and getting the best out of it.	Case study, lecture and presentation
01.00-01.45	Lunch
01.45-03.15	Designing compensation models for business excellence	Expert guided exercises
03.15-03.30	Tea
03.30-05.30	Income tax provisions for salaried class and minimizing the tax liability.	Lecture, experience sharing and case discussion.

RESOURCE PERSONS

Dr. G P Naik is professor of HRM and an experienced trainer in HR domain. He is a doctorate in Management from Canara Bank School of Management Studies, Bangalore University. Previously he was the Head of Learning and Development at Karle Group of Companies, Bangalore. He has provided performance management solutions to several companies. He has rendered training and consultancy services to several reputed organizations like Karnataka Employers’ Association, International Labour Organization, Labour Department of Government of Karnataka, Indo-Nissin, Sasken, Indo-US MIM, Persistent Systems, Sasaara Financial Services, Aditya Birla, Oracle, Madura Coats, Infosys, Chamundeshwari Sugars, BEML, HAL, NTPC, Grasim, Schneider Electric, TVS Motors, MTR Foods, and GMR.

He has authored two books on competency mapping and three books in the area of training and development, 10 book chapters and over 100 articles. His areas of interest are Compensation and Benefits, Performance Management, Competency Mapping, Assessment Centre, 360 Degree Feedback, Recruitment and Selection, Career and Succession planning, Employee Discipline and Statutory Compliance, and Strategic Talent Management.  He has over two decades of experience working in reputed organizations like LIC of India, Institute for Social and Economic Change, Bank of Baroda, Bangalore University, M S Ramaiah Institute of Management, Presidency College, PES Institute of Technology, Karle Group of Companies and IFIM Business School. 

ABOUT TALENT AVENUES CORPORATION

Talent Avenues Corporation is a Management Consultancy based out of Bangalore City in India. It is led by a group of eminent management professionals who have vast experience in working across organizations of repute. We at Talent Avenues Corporation provide cutting edge management solutions to meet the organizational needs for value creation.

Our services include training, consulting and research in the area of Human Capital Management across industry verticals and sectors. We provide services at diagnostic, design, implementation and evaluation levels. We offer customized services suited to the needs of individual organizations as well as modular programmes which can be effectively deployed across any organization.

We work with contemporary tools and tested methodologies to ensure predicted outcome becomes reality. Our services and products are robust enough to give you all round results that last longer. We update our offerings from time to time based on changing organizational needs and customer feedback.

Our clients benefit in multiple ways by working with us; because we save their time by accelerating our timelines, we cut their cost by making our programmes and services affordable, we make value addition by offering contemporary programs which add value to business and we create possibilities which others could not even think. Visit us at www.talentavenues.com to know more about our work or write to us at naik@talentavenues.com

Thanks and Regards

Dr G P Naik

Director

Talent Avenues Corporation

No.203, Second Main Road, Brindavan Extension, Arakere Mico Layout, Bangalore 560 076.

Phone 9243470110/ 8050313451 / Nagesh 9900028300

Email naik@talentavenues.com

www.talentavenues.com

WHAT IS THE RATE OF WAGE/ SALARY FOR LEAVE ENCASHMENT?

If an employee wants leave encashment of one month, how much will your pay?

PRACTICES

Companies follow different practices to determine the salary for leave encashment. Some companies pay only the basic pay, some others pay basic pay and dearness allowance, and few others pay the gross salary. It is so because law does not say, what constitutes wage/ salary for the purpose of leave encashment.

CONSEQUENCES

You can pay anything in non-unionised organizations and labour inspectors also do not bother you much about it. But it will have serious adverse implications in unionised organizations.

RIGHT APPROACH

If the employee had availed leave instead of seeking encashment, you would have paid him all the components like basic, DA,HRA, CCA  i.e. gross salary. Hence it is both wisdom and professionalism to pay gross salary for encashment, subject to the following.

Leave encashment will not qualify for ESI, PF, deduction.

Leave encashment amount should not be considered for determining the bonus and gratuity.

Leave encashment is subject to deduction of income tax. 

PAYMENT OF BONUS (AMENDMENT) ACT 2015

HOW TO CALCULATE BONUS AS PER PAYMENT OF BONUS ACT AMENDED IN 2015?

The payment of bonus has been amended and notified by the central government on 1^st Jan 2016.

Major changes in the amended Act are as under.

ELIGIBILITY FOR BONUS:  Employees earning upto Rs.21000 salary or wage (earlier limit Rs.10000). Salary or wage means only basic pay and dearness allowance).

WAGE OR SALARY CEILING FOR CALCULATION OF BONUS: Rs.7000 or the wages fixed by the government under Minimum Wages Act whichever is higher (earlier limit was just Rs.3500).

EFFECTIVE DATE: Retrospectively with effect from 1^st April 2014.

Let us understand the implications by the following examples.

LIST OF YOUR EMPLOYEES AS ON 31^ST MARCH 2014 AND THEIR ELIGIBILITY FOR BONUS

Name	Designation	Basic pay (Rs).	DA (Rs)	HRA (Rs)	Other allowances (Rs)	Total  (Rs)	Eligibility as on 31 Mar 2014	Eligibility  as per amended Act	Remarks
Abudul	Officer	20000	2000	1000	1000	24000	NO. Basic +DA is more than 10K	NO. Basic +DA is more than 21K	Do not pay
Binoy	Manager	10000	12000	1000	1000	24000
Chinnu	Supervisor	14000	8000	2000	3000	27000
Dodda	Worker	7000	4000	3000	2000	16000	NO. Basic +DA is more than 10K	YES. Basic + DA is less than 21K	Calculate and pay w.e.f 1st April 2015 on Rs.7K pay
Elangov	Manager	8000	3000	3000	1000	15000
Francies	Manager	8000	5000	8000	2000	23000
Gopal	Manager	8000	3000	2000	11000	24000
Hamsa	Worker	8000	2000	3000	10000	23000	NO. Basic +DA is more than 10K	YES. Basic + DA is less than 21K	Their pay is fixed under minimum wages Act. Hence pay on full basic +full DA.
Indu	Worker	8000	2000	3000	2000	15000
Jockey	Worker	10000	2000	3000	2000	17000
Krishna	Supervisor	10000	2000	3000	2000	17000
Lokesh	Supervisor	10000	4000	4000	1000	19000
Muniya	Supervisor	10000	4000	4000	1000	19000
Nazeer	Worker	3000	4000	4000	1000	12000	YES. Basic + DA is less than 10K. Calculate on Rs.3500 wages.	YES. Basic + DA is less than 21K. Calculate on Rs.7000 wages.	You have already paid on Rs.3500 wages. Now calculate and pay the difference.
Ompraka	Worker	3000	2000	3000	2000	10000
Preeti	Worker	3000	2000	3000	2000	10000
Quaseem	Worker	3000	2000	3000	2000	10000
Raja	Worker	3000	2000	3000	2000	10000
Shiva	Worker	3000	2000	3000	2000	10000
Thomas	Worker	2000	1000	3000	2000	8000	YES. Basic + DA is less than 10K. Calculate on actual wages i.e. on Rs.3000 wages.	YES. Basic + DA is less than 21K. Calculate on Rs.7000 wages.	You have already paid on Rs.3000 wages. Now calculate and pay the difference.
Uday	Worker	2000	1000	3000	2000	8000
Vidya	Worker	2000	1000	3000	2000	8000
Watson	Worker	2000	1000	3000	3000	9000
Xevier	Worker	2000	1000	3000	2000	8000
Yellappa	Worker	2000	1000	3000	2000	8000
Zende	Worker	2000	1000	3000	2000	8000

KNOW MORE ABOUT PAYMENT OF BONUS ACT 1965

Chapter 25

The Payment of Bonus Act, 1965

The dictionary meaning of the term bonus is something given or paid in addition to what is usual or expected. It is a sum of money or an equivalent given to an employee in addition to the employee's usual wages.

Prior to the payment of bonus Act was passed, bonus was linked to profits, which means that if an establishment did not make profits in a particular year the employer was not liable to pay bonus. In other words payment of bonus was not mandatory. But this Act provides for mandatory payment of annual bonus by employer to certain class of employees whether the establishment made profit or loss.

But during the first five years from the year in which a new establishments sells goods or renders service, bonus shall be payable only if and in respect of the years in which it makes profit. If the establishment does not make profit during the first five years, it need not pay bonus for those years but it should start paying from sixth year irrespective of the profit or loss. 

Applicability

The Act is applicable to every factory and any other establishment in which twenty or more persons are employed on any day during an accounting year.  Within these organizations employees drawing wages upto Rs.10000(Rs.21000 with effect from 1^st April 2014) per month are eligible for receiving the bonus. Where the monthly wages of any eligible employee exceeds Rs.3500 (Rs.7000 with effect from 1^st April 2014 the bonus shall be calculated as if the monthly wages are Rs.3500 (Rs.7000 or the minimum wages fixed by the government under Minimum wages Act whichever is higher).

Important definitions

a)      Available  Surplus shall be the gross profits for that year after deducting, depreciation, development rebate or investment allowance allowed to the employer under income tax Act, direct tax payable by the employer and the deductions specified in schedule III of the Act.

b)      Allocable surplus means in relation to an employer, being a company other than a banking company which has not made the arrangements for payment of dividends out of profits, in accordance with section 194 of Income Tax Act, sixty-seven per cent of the available surplus in an accounting; year; and in any other case, sixty percent of such available surplus.

c) Appropriate Government means in relation to an establishment in respect of which the appropriate Government under the Industrial Disputes Act, 1947, is the Central Government, the Central Government; in relation to any other establishment, the Government of the State in which that other establishment is situated.

d)      Employee means any person other than an apprentice employed on a salary or wage not exceeding ten thousand rupees per month in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward. It is important to note here that employee is not defined based on designation or nature of work rather it is defined on the basis of monthly salary.

e)      Set on means where for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under section 11, then, the excess shall, subject to a limit of twenty per cent. of the total salary or wage of the employees employed in the establishment in that accounting year, be carried forward for being set on in the succeeding accounting year and so on up to and inclusive of the fourth accounting year to be utilized for the purpose of payment of bonus in the manner illustrated in the Fourth Schedule.

f) Set off  means where for any accounting year, there is no available surplus or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees in the establishment under section 10, and there is no amount of sufficient amount carried forward and set on under sub-section (1) which could be utilized for the purpose of payment of the minimum bonus, then, such minimum amount or the deficiency, as the case may be, shall be carried forward for being set off in the succeeding accounting year and so on up to and inclusive of the fourth accounting year in the manner illustrated in the Fourth Schedule.

g)      Wage or salary means all remuneration other than over-time allowance capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance.

h)      But does not include (i) any other allowance which  the employee is for the time being entitled to; (ii) the value of any house accommodation or supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles; (iii) any traveling concession; (iv) any bonus (including incentive, production and attendance bonus); (v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force; (vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him; (vii) any commission payable to the employee. Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to from part of the salary or wage of such employee.

Eligibility for bonus

a)      Employees drawing monthly wage up to Rs.10000 per month are eligible for receiving bonus from the employer once in a year (section 2[13]).

b)      Where the monthly wage exceeds Rs.3500, bonus shall be calculated as if the wage is Rs.3500 per month (section 12).

c)       The employee should have worked in the establishment for at least 30 days during the accounting year. The days of layoff, leave with wages, the days of absent due to temporary disablement caused by accident arising out of and in the course of employment and the days of maternity leave with wages shall be included to compute the minimum number of days worked (section 8 & 14).

d)      The minimum bonus payable shall be 8.33% of the annual wages drawn by the employee or Rs.100 which ever is higher. In case of employees who are less than 15 years of age the minimum  bonus payable shall be 8.33% of the annual wages drawn by the employee or Rs.60 whichever is higher(section 10).

e)      Where the employee has not worked on all the working days during the previous accounting year the minimum bonus of Rs.100 or Rs.60 as the case shall be proportionately reduced if it is more than 8.33% of the monthly wage(section 13).

f)       Where the allocable surplus is more than the minimum bonus stated above the employer shall pay higher percentage of annual wage as bonus subject to a maximum of 20% of the annual wage (section 11).

g)      In respect of newly started establishments for the first five accounting years the employer is liable to pay bonus only for the accounting years in which profit is made without applying the provisions of set on and setoff. For the sixth accounting year set on or setoff shall be made by taking into account the surplus or deficiency of fifth and sixth accounting years only. For the seventh accounting year set on or setoff shall be made by taking into account the surplus or deficiency of fifth, sixth and seventh accounting years only (Section 16).

h)      Where the employer has paid interim bonus before the due date the employee is eligible to receive only the balance amount (Section 17).

i)        During  the financial year if any eligible employee has caused financial loss to the employer such losses can be adjusted and remaining amount of bonus shall be payable(Section 18)

j)        Bonus shall be paid in cash. Bonus shall be paid within 8^th month from the last day of closing the accounting year. Where there is any dispute pending under section 22 in respect of bonus payable, it shall be paid within one month from the date of award becoming enforceable or  settlement becoming operational in respect of the said dispute (Section 19).

Disqualification for receiving bonus

An eligible employee shall be disqualified from receiving bonus under this Act if he is dismissed from service for, fraud, riotous or violent behavior while on the premises of the establishment, or theft, misappropriation or sabotage of any property of the establishment (section 9).

Recovery of bonus

a)      Section 21 and 22 of the Act prescribes the procedure for recovery of unpaid bonus as under. 

b)      Where any bonus due to an employee from the employer under an award, settlement  or agreement, the employee or any person authorized by the employee and in case of death of the employee, his legal heirs shall make an application to the authority notified by the government for the recovery of the money due to him. For this purpose the Government of Karnataka has notified the Deputy Labour Commissioners as authorities by it notification dated 5^th April 2006.  If the authority is satisfied that the money claimed is payable, it shall issue a certificate to the District Collector to recover the due as if land revenue and pay to the employee.

c)       Such application shall be made within one year from the due date.

d)      If there is any dispute between the employee and the employer in respect of bonus payable under this Act it shall treated as dispute under Industrial Disputes Act 1947, and resolved accordingly.

Penalties

a)      Section 28 to 30 of the Act deals with penal provisions as under.

b)      Any person who contravenes any provision of this Act or the Rule  or refuses to obey the order/ requisition made under this Act shall be punished with  imprisonment up to six months and fine up to one thousand rupees.

c)       No court shall take cognizance of any offence under this Act unless a complaint is made by the Labour Commissioner.

d)      No court inferior to the court of presidency magistrate or judicial magistrate of first class shall try any offence under this Act.

Authorities

The Government of Karnataka by gazette notification No.LD/139/LET/2011(2) dated 9^th June 2011 has appointed the following officials of labour department to exercise the official powers under this Act.

a)      Authority to grant permission for change of accounting year under section 2(1) (iii)(b): Labour Commissioner

b)      Inspectors under Section 27: Labour Commissioner, Additional Labour Commissioner, Joint Labour Commissioner, Deputy Labour Commissioner, Assistant Labour Commissioner and Labour Officer of the respective jurisdiction.

c)       Authority under Section 21:  Deputy Labour Commissioner of respective jurisdiction.

d)      Authority under section 30 to initiate prosecution: Labour Commissioner, authorized by the government.

 Registers to be maintained, returns to be submitted and notices to be displayed

a)      Register of allocable surplus in Form A.

b)      Register of the set on and set off allocable surplus in Form B.

c)       Register of bonus paid and deduction made from the bonus in From C.

d)      Annual return Form D to the inspector within 30 days from the last date set for payment of bonus under the Act.