In the Financial Year 2023-24, Z Systems Ltd., a company governed by the Payment of Bonus Act, 1965, incurred significant losses and reported a negative net profit in its financial statements. The Board of Directors deci

The Payment of Bonus Act, 1965 provides for the payment of bonus to persons employed in a factory or certain establishments, employing 20 or more persons, on any day during an accounting year, on the basis of profits or on the basis of production or productivity and for matters connected therewith. Section 10 of the Payment of Bonus Act, 1965 provides that: Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 per cent. of the salary of wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year: Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year, the provisions of this section shall have effect in relation to such employees as if for the words "one hundred rupees", the words "sixty rupees" were substituted. Thus, even if the employer suffers losses during the accounting year, it is bound to pay minimum bonus as prescribed under section 10. Accordingly, employees will succeed.