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Section 32 – The Payment of Bonus Act, 1965

The Payment of Bonus Act, 1965


32. Act not to apply to certain classes of employees. –


Nothing in this Act shall apply to –


(i) Employees employed by any insurer carrying on general insurance business and the employees employed by the Life Insurance Corporation of India ;


(ii) Seaman as defined in Cl. (42) of Sec.3 of the Merchant Shipping Act, 1958 (44 of 1958) ;


(iii) Employees registered or listed under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948), and employed by registered or listed employers ;


(iv) Employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority ;


(v) Employees employed by –


(a) The Indian Red Cross Society or any other institution of a like nature (including its branches) ;


(b) Universities and other educational institutions ;


(c) Institutions (including hospitals, chambers of commerce and society welfare institutions) established not for purposes of profit ;


(i) Employees employed through contractors on building operations ;


(ii) (Note: Clause (vii) omitted by Act 66 of 1980, (w.e.f. 21st August, 1980)


(iii) Employees employed by the Reserve Bank of India ;


(iv) Employees employed by –


(a) The Industrial Finance Corporation of India;


(b) By Financial Corporation established under Sec.3, or any Joint Financial Corporation established under Sec. 3-A of the State Financial Corporations Act, 1951 (63 of 1951) ;


(c) The Deposit Insurance Corporation ;


(d) [(Note: Subs. by Act 61 of 1981) the National Bank for Agriculture and Rural Development;]


(e) the Unit Trust of India ;


(f) the Industrial Development Bank of India ;


(Note: Omitted by Act 66 of 1980, (w.e.f. 21st August, 1980))


(g) Any other financial institution [(Note: Ins. by ibid) Other than a banking company], being an establishment in public sector, which the Central Government may, by notification in the official Gazette, specify having regard to –


(i) Its capital structure ;


(i) Its objectives and the nature of its activities; (ii) The nature and extent of financial assistance or any concession given to it by the Government; and


(iii) Any other relevant factor ;


(i) (Note: Clause (x) omitted by Act 23 of 1976, Sec.20, (w.e.f. 25th September, 1975)


(ii) Employees employed by inland water transport establishments operating on routes passing through any other country.




Applicability of the provisions of the Bonus Act to employees the Defence ministry canteen stores department. It was held that canteen stores department is an “establishment” engaged in any industry carried on by or under the authority of any department of the Central Government. (Radhu-k-Kallde of Bombay v. Union of India and other (1986) 1 S.C.J.5).



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The Payment of Bonus Act, 1965


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