The Act extends to the whole of India and is applicable to every factory as defined in him Factories Act, 1948, and to every other establishment in which 20 or more persons are employed on any day during an accounting year. However, the appropriate Government, can, by giving two month’s notice, extend this Act to any establishment employing between 10 and 20 workers.
It may be noted that employment of more than 20 persons even for one day will make the employer liable for bonus. Similarly, an employer cannot escape liability simply because the number of employees working in his factory/ establishment has fallen below 20 at any time of the year.
But under Section 36 of the Act, the appropriate Government may, having regard to the financial position and other relevant circumstances of any establishment, grant exemption from all or any of the provisions of this Act for such period as may be specified and subject to any conditions.
Section 3 of the Act further clarifies that if an establishment consists of different departments or branches at same or different locations, it shall include such departments/branches also, for the purposes of computation of bonus under this Act.
But if for any accounting year a separate set of accounts (balance sheet and profit and loss account) are prepared and maintained for a particular department or branch, then such department or branch shall be taken as a separate establishment for the purpose of computation of bonus under this Act for that year.