Bonus Ceiling : Revision of ceiling of Bonus for Central Government and Railway Employees – NFIR Report

Bonus Ceiling

Revision of ceiling of Bonus for Central Government and Railway Employees

NFIR Report

In 2007, the calculation ceiling of bonus was increased from Rs.2500 to Rs.3500 pm , and the eligibility limit for bonus was raised from Rs.3500 to Rs.10,000 pm. For a number of years, all federation of Central Government employees have been demanding that the calculation ceiling limit be raised from Rs.3500.

The whole world, the Private Sector, unfortunately sometimes the Public Sector too feel that the Central Government employees get lucrative bonus. True, the Central Government employees do get bonus, but many people don’t realize about the Ceiling limit, fixed at Rs.3500.

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With the highest prescribed ceiling limit fixed at Rs.3500, the bonus is calculated based on the number of days announced. Last year, Railway employees were given bonuses of 78 days, employees of the postal department received 60 days bonus.

Civilian employees of the defence were given a bonus of 40 days. Employees of the public and private sectors wrongly assume that 60 days bonus implies tow monthsҠsalary. In simple terms, a 30 days bonus indicates a sum of Rs.3500 approximately. 60 days bonus implies that the worker will be given Rs.7000. in case of 75 days bonus, the worker makes Rs.8750.

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The amount is equal to one-fifth the salary of the employee. In 2007, the calculation ceiling of bonus was increased from Rs.2500 to Rs.3500 pm , and the eligibility limit for bonus was raised from Rs.3500 to Rs.10,000 pm. For a number of years, all federation of Central Government employees have been demanding that the calculation ceiling limit be raised from Rs.3500.

In the case of Central Public Sector undertakings, the wage revisions normally takes place after every five years. The 5th CPC in the case of Central Government employees recommended wage revision in every 10 years. In the past wage revision has been linked to the extent of erosion of real wages.

The degree of inflation in the economy determines the pace of erosion of the real value of wages. The retail prices of those commodities which go into the making of minimum wages have risen by about 160% from 1.1.2006 to 1.1. 2011, whereas the D.A. compensation in the case of Central Government employees on that date had been just 51%. Barring the Railways, Defence production units and Postal Department, Bonus is paid to the Central Government employees on adhoc basis.

The 30 days adhoc bonus is the maximum that is provided to them. The 4th and 5th Central Pay Commissions had recommended the introduction of productivity linked bonus scheme to all Departments as is presently the case in the three Departments mentioned above. Even the scheme of PLB is not uniform in as much as the Postal Department introduced a ceiling on the entitled number of days of bonus whereas no such ceiling exist either in the Railways or in the Defence Production organisations.

The Government is yet to implement these recommendations even though several rounds of discussions on the subject were held. There is no reason whatsoever, as to why this recommendation could not be implemented. There had been no rise in the adhoc bonus for past a decade even though there had been considerable amount of increase in the case of PLB over the years.

Recently, the Government requested the trade unions to withdraw their September 2 strike notice. During the negotiations that were held between the ministers and the trade union representatives, it was reported that the Government had accepted to raise the bonus ceiling limit from Rs.3500 to Rs.7000. Sources also said that the eligibility of bonus was raised from Rs.10,000 to Rs.20,000. But, no announcements in this regard were made by the Government.

The Railway workers federation, NFIR, wrote a letter to the Railway Minister on September 8. The letter demanded that the ministry take action based on the bonus announcement issued by the authorized government information bureau, PIB, on September 1, 2015.

NFIR has also written to the PM on the 5th of October, No. l/10/Part V, demanding revision of bonus eligibility and calculation of ceilings, before commencement of the Puja Holidays, they have also pointed out that the Government has already promised to end this confusion by September 2015.

Source: NFIR India