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Object and scope of the Act

The object and scope of the Act are to provide persons employed in certain establishments or factories with the payment of bonus to and for matters connected therewith. The main object of the Act being is by allowing the employees to share the prosperity of the establishment. Thus, the maintenance of peace and harmony between labour and capital.

On the question whether the Act deals only with profit bonus, it was observed by the Supreme Court in Mumbai, that “bonus” is a word of many generous connotations and, in the Lord’s mansion, there are many houses. There is a profit based bonus which is one specific kind of claim and perhaps the most common. Then, there is a customary or traditional bonus. Which has its emergence from long, continued usage leading to a promissory and expectancy situation materialising in a right.

There is attendance bonus and what not. The Bonus Act speaks and speaks as a whole Code on the sole subject of profit based bonus but is silent and cannot. Therefore, annihilate by implication, other distinct and different kinds of bonuses. Such as the one oriented on custom. The Bonus Act, 1965 as it then stood does not bar claims to customary bonus or those based on conditions of service. Held, a discerning and concrete analysis of the scheme of the Bonus Act. And the reasoning of the Court leaves no doubt that the Act leaves the untouched customary bonus.

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