Govt doubles monthly bonus calculation ceiling to Rs 7,000

The Cabinet Wednesday decided to double the wage ceiling for calculatingbonus to Rs 7,000 per month for factory workers and establishments with 20 or more workers.

"The Payment of Bonus (Amendment) Bill, 2015 to enhance the monthly bonus calculation ceiling to Rs 7,000 per month from existing Rs 3,500 was approved by Union Cabinet here," a source said after the Cabinet meeting.

The amendment bill will be made effective from April 1, 2015. Now the bill will be tabled in Parliament for approval.

The bill also seeks to enhance the eligibility limit for payment of bonus from the salary or wage of an employee from Rs 10,000 per month to Rs 21,000.

The Payment of Bonus Act 1965 is applicable to every factory and other establishment in which 20 or more persons are employed on any day during an accounting year.

The bill also provides for a new proviso in Section 12 which empowers the central government to vary the basis of computing bonus.

At present, under Section 12, where the salary or wage of an employee exceeds Rs 3,500 per month, the minimum or maximum bonus payable to employees are calculated as if his salary or wage were Rs 3,500 per month.

The last amendment to both the eligibility limit and the calculation ceilings under the said Act was carried out in 2007 and was made effective from April 1, 2006.

This amendment in the Act to increase wage ceiling and bonus calculation ceiling was one of assurances given by the Centre after 10 central trade unions went on one-day strike on September 2.

The government had hinted at meeting workers' aspirations on nine out of 12 demands submitted by the unions

Three Bank may be forced to look at a merger in 1st stage

The proposal to consolidate state-owned banks is back on the drawing board. This will be undertaken by the public sector bank board, which will be set up in the next few months.

With the government showing reluctance in providing financial support to state-owned banks that have failed to show significant growth in their businesses, many “weaker” banks may be forced to look at mergers.

The setting up of the board was proposed by finance minister Arun Jaitley in this year’s Union Budget. The board, once set up, would act as an independent consultant and identify the banks with the right synergies that could be merged.

“The issue is being looked at though there is nothing concrete at this stage, the bank board, which would be independent and part time in nature, once set up would look at the consolidation exercise in the banking space,” a senior government official, who did not wish to be identified, told HT.

Andhra Bank, Bank of Maharashtra and United Bank of India (UBI), all of which have comparatively less assets, may be among the banks that may be forced to look at a merger.

UBI has a market capitalisation of Rs 1,815.7 crore and a gross non-performing asset – loans that do not yield returns – ratio of 9.49%.

Bank of Maharashtra, which has a market capitalisation of Rs 3,997.6 crore has a gross NPA ratio of 6.33% and Andhra Bank, with a market capitalisation of Rs 4,217 crore has a gross NPA ratio of 5.31%.

Gross NPAs of all public sector banks stood at 5.17% as of March 2015.

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Tata cuts 1,200 jobs as Chinese dumping hits UK steel plants

Companies with Indian roots are making waves in the British industrial circles – for the wrong reasons. Tata Steel, one of Europe’s largest steel makers, on Tuesday announced major cutbacks and restructuring of its assets in the UK, a day after 16 companies of the Swraj Paul-led Caparo Group were put under administration.

Britain’s steel industry is reeling under dumping of Chinese steel, high energy costs and taxes. Coincidentally, Chinese President Xi Jinping arrived here on a high-profile four-day visit on Tuesday. The industrial crisis dominated the House of Commons on Tuesday, and Prime Minister David Cameron assured MPs that he would take up the issue with President Xi.

Tata Steel’s Long Products Europe business, while announcing it would stop production of steel plate, specifically identified China as the source of cheap imports. The changes would lead to around 1,200 job losses – about 900 in Scunthorpe and 270 in Scotland, as well as some at other Long Products Europe sites.

Plate mills in Scunthorpe, Dalzell and Clydebridge would be mothballed while one of the two coke ovens at the Scunthorpe steelworks would be closed, the company said.

Karl Koehler, chief executive of Tata Steel’s European operations, said: “The UK steel industry is struggling for survival in the face of extremely challenging market conditions. We need a fairer system to encourage growth. The European Commission needs to do much more to deal with unfairly traded imports – inaction threatens the future of the entire European steel industry.”

Caparo Group companies are active in UK steel and associated engineering businesses such as forging and pressing of metal products for aerospace, automotive and other industries, and production of fastenings, wire, tubes and other accessories.

Pricewaterhouse Coopers, which was appointed administrator for Caparo, said it would be “rapidly assessing all options for the businesses through this week and beyond”.

Nearly 1,700 people employed by Caparo in Britain may lose jobs. Just last week, SSI’s steel mill in Redcar was closed down, shedding 1,700 jobs.

LICWage Revision update

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