Bonus - Definition - Law Dictionary Home Dictionary Definition bonus

Definition :

Bonus, premium or advantage; an occasional extra dividend; a gratuity. As to the respective rights of tenant for life and remaindermen in a bonus declared by a company, see Bouch v. Sproule, (1887) 12 App Cas 385; Re Northage, (1891) 60 LJ Ch 488, and see Palmer's Company Law, 15th Edn., 228.

Means a premium paid in addition to what is due or expected e.g. year end bonus. In the employment context, worker's bonuses are not a gift or gratuity; they are paid for services or on consideration in addition or in excess of the compensation that would ordinarily be given; a payment made to the lessee for the execution of an oil-and-gas lease, the lessee received a large bonus at closing, Black Law Dictionary, 7th Edn., p. 176.

Bonus is not, as its etymological meaning would suggest, a mere matter of bounty gratuitously made by the employer to his employees; nor is it a matter of deferred wages. It has been held by this Court in Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, Kanpur, (1955) 1 SCR 991, that 'the terms 'bonus' is applied to a cash payment made in addition to wages. It generally represents the cash incentive given conditionally on certain standards of attendance and efficiency being attained', Sree Meenakshi Mills Ltd. v. Their Workmen, AIR 1958 SC 153.

Bonus in the industrial sense as understood in our country does come out of the available surplus of profits, and when paid, it fills the gap, wholly or in part, between the living wage and the actual wage. It is an addition to the wage in that sense, whether it be called contingent and supplementary, Central Bank of India v. Their Workmen, AIR 1960 SC 12 (25): (1960) 1 SCR 200.

The Bonus Act, 1965 dealt with only profit bonus and matters connected therewith and did not govern customary, traditional or contractual bonus, Mumbai Kamgar Sabha v. M/s. Abdulbhai Faizullabhai, (1976) 3 SCC 832: AIR 1976 SC 1455: (1976) 3 SCR 591.

Bonus paid to the employees under an award amounts to wages, Purushottam H. Judye v. V.B. Potdar, AIR 1966 SC 856: (1966) 2 SCR 353.