The first demand is an immediate one, aimed at ensuring that employees receive the FY2025-26 Productivity Linked Bonus (PLB) around Durga Puja while the second seeks a structural overhaul of the bonus calculation formula.

Employee organisations are now pressing the government and the 8th Central Pay Commission (CPC) to address what they describe as an outdated ceiling that no longer reflects prevailing pay levels, minimum wages, or the cost of living.

The latest demand has come from the Joint Council of Postal Employees (JCPE), an umbrella organisation of seven postal unions. In a letter to the Secretary, Department of Posts, the JCPE sought payment of the PLB for FY2025-26 on or before 17 October, the day Durga Puja begins this year. Dussehra will be celebrated on 21 October.

“Durga Puja and Dussehra are among the most important festivals celebrated across different parts of the country and the festive period involves considerable additional expenditure for employees and their families,” the JCPE said in its communication.

Basis For Bonus

The call for early payment, however, is part of a larger concern regarding the bonus regime for Central government employees.

Employee organisations have simultaneously intensified their demand for an increase in the ceiling used for calculating the bonus, arguing that the existing limit of ₹7,000 a month is no longer compatible with the present salary structure.

The issue has gained renewed attention following a government notification dated 25 August concerning the statutory basis for bonus calculation.

Under the existing provision, when an employee’s wage exceeds ₹7,000 per month, the bonus is calculated with ₹7,000 as the wage or the minimum wage fixed by the Central government, whichever is higher.

The Staff Side of the National Council-Joint Consultative Machinery (NC-JCM), led by its Secretary Shiva Gopal Mishra, has sought a substantial increase in this ceiling. 

In a letter to the Cabinet Secretary in August, Mishra demanded that the bonus calculation ceiling be increased from ₹7,000 to ₹21,000. In the letter, Mishra argued that the Central government’s minimum wage has risen to ₹21,000, making the existing ₹7,000 ceiling unjustifiable.

The Staff Side had also raised the issue earlier at the 49th meeting of the National Council-JCM held on 11 May. During the meeting, the Official Side indicated that the matter could be considered after the revision of the ceiling under the Code on Wages, 2019.

Link It To Actual Pay, Say Employees

Employee organisations, however, want the issue to be addressed more comprehensively through the 8th CPC.

“The demand before the Pay Commission goes beyond merely increasing the existing statutory ceiling. Several employee bodies have argued that bonus should ultimately be linked to the actual pay drawn by an employee rather than being restricted by an artificially low calculation limit,” said Manjeet Patel, the National President of the NPS Employees Union.

The Federation of National Postal Organisations (FNPO), in its memorandum to the 8th CPC, has strongly criticised the existing arrangement. It has pointed out that the Payment of Bonus Act, 1965 established the principle that bonus represents deferred wages and provides for a statutory minimum of 8.33% of wages.

According to the FNPO, both PLB and Ad-hoc Bonus are currently calculated on monthly emoluments subject to a ceiling of ₹7,000 for 30 days. It described the restriction as irrational and outdated in the context of the present salary structure.

The Ministerial Staff Association, Survey of India, has also argued that the existing ceiling has progressively diluted the value of bonus as minimum wages and pay scales have increased. 

According to it, the ceiling has become so detached from prevailing remuneration that the amount received as bonus has become largely symbolic rather than a genuine performance-linked reward. It has proposed that PLB and Ad-hoc Bonus should be calculated on the actual Basic Pay plus Dearness Allowance drawn by an employee.

The Railway Senior Citizens’ Welfare Society has also called for revision of the existing bonus arrangement. It has maintained that the present bonus system should continue, but be revised periodically so that the benefit remains meaningful against the backdrop of rising living costs.

The emerging debate has two distinct dimensions. The first concerns the timing of the payment and the second is a longer-term policy issue concerning how bonus itself is calculated.

The issue is likely to remain part of the broader negotiations and submissions before the 8th CPC, which is examining various aspects of the pay and service conditions of central government employees.