SC: Workers Entitled to Bonus Even if Factories Are Run by Charitable Trusts

SC: Workers Entitled to Bonus Even if Factories Are Run by Charitable Trusts

The Tribunal had awarded the workers the minimum bonus (8.33% of annual earnings), which the High Court upheld with the modification that the bonus be paid after deducting ex-gratia amounts already given. The Supreme Court ruled that: The appellant’s factories qualify as "factories" under the Factories Act, 1948, making the Bonus Act applicable. Since 1985, the trust had shifted its focus to larger-scale commercial activities. No evidence suggested that the trust was affiliated with the Indian Red Cross Society or had similar objectives. The appellant severed all ties with the Swedish Red Cross Society in 1989. Operating under a trust engaged in charitable work does not exempt the factories from providing workers benefits under the Bonus Act. Ex-gratia payments cannot replace the statutory bonus. The Supreme Court dismissed the appeal, directing the appellant to pay the bonus to workers as per the Bonus Act from 1996-1997 onwards, with compliance to be done within one month.

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