The bonus paid to the employees under the Payment of Bonus Act, 1965 (“Bonus Act”, hereinafter) is entirely profit-based for the reason that it is a complete code in itself.1 The Bonus Act does not recognise/mandate the payment of any other bonus except the bonus based on profits under the Scheme provided under the Bonus Act. Even though various other kinds of bonuses are recognised in industrial law, they have been left uncovered by the Bonus Act. Even though section 17 of the Bonus Act talks about “customary bonus” and its adjustment against the statutory bonus payable under the Bonus Act in a statutory year, the section in express terms refers to puja bonus and other customary bonus as available for deduction from the bonus payable under the Act, thus making a clear distinction between the bonus payable under the Act and “puja” bonus or other customary bonus.2
It has become commonplace to see managements equating bonus payable under the Bonus Act with incentive bonus schemes that they might have in place. For instance, such an...
