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Section 34 – The Payment of Bonus Act, 1965

The Payment of Bonus Act, 1965


34. Employees and employers not to be precluded from entering into agreements for grant of bonus under a different formula. –


Nothing contained in this Act shall be construed to preclude employees employed in any establishment or class of establishments from entering into agreements with their employer for granting them an account of bonus under a formula which is different for that under this Act :


Provided that no such agreement shall have effect unless it is entered into with the previous approval of the appropriate Government :


Provided further that any such agreement whereby the employees relinquish their right to receive the minimum bonus under sub-section (2-A) of Section 10 shall be null and void in so far as it purports to deprive them of such right :


Provided also that such employees shall not be entitled to be paid bonus in excess of –


(a) 8.33 per cent of the salary or wage earned by them during accounting year if the employer has no allocable surplus in the accounting year or the amount of such allocable surplus is only so much that, but for the provisions of sub-section (2-A)of Section 10, it would entitle the employees only to receive an amount of bonus which is less than the aforesaid percentage, or (b) Twenty per cent, of the salary or wage earned by them during the accounting year.




Employer and workmen enter into settlement before Conciliation Officer on 9th October, 1972 within the meaning of Sec.34 (3) of Payment of Bonus Act – On a reference before the tribunal workmen claims three month Salary as customer’s bonus or 2% of salary as per the Act – Validity of award directing payment of three months basic wages as on 31st March 1972 instead of 31st March 1970 in term 1 of the Settlement. (Dishergarh Power Supply Co., Ltd. v. The Workmen of Dishergarh Power Supply Co., Ltd., (1986) 3 SCJ 247).



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The Payment of Bonus Act, 1965


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