Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Code:
Provided that where for any accounting year a separate balance-sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, such department or undertaking or branch shall be treated as a separate establishment for that accounting year, unless such department or undertaking or branch was, immediately before that accounting year, treated as part of the establishment.
Legal Commentary & Landmark Judgments: Section 28
Section 28 enacts the principle of establishment unity for bonus determination, providing that all departments, undertakings, and branches of an establishment, whether situated in the same place or different places, must be treated as parts of the same establishment for bonus calculation, unless separate audited balance sheets have been historically maintained.
Multi-locational companies operating diverse divisions must maintain distinct, audited standalone books of account if they intend to pay branch-specific bonuses. If a company historically published consolidated balance sheets and distributed uniform bonuses across all branches, it cannot unilaterally isolate an unprofitable branch to pay minimum 8.33% bonus while paying 20% elsewhere; the Tribunal will enforce historical consolidated accounting.