Supreme Court Denies Bonus Exemption to Factories Run by Charitable Trusts
Supreme Court Denies Bonus Exemption to Factories Run by Charitable Trusts By Abhishek Jat, Advocate In a landmark ruling that clarifies the scope of exemptions under the Payment of Bonus Act, 1965, the Supreme Court has definitively established that factories operated by charitable trusts cannot claim exemption from paying statutory bonus to their workers. The judgment delivered on April 2, 2025, in the case of The Management of WORTH Trust v. The Secretary, WORTH Trust Workers Union, addresses the critical intersection of charitable purposes and commercial operations under labor welfare legislation. The case concerned the Workshop for Rehabilitation and Training of the Handicapped Trust (WORTH), formerly known as the Swedish Red Cross Rehabilitation Trust, which engages in rehabilitation of leprosy-cured patients and differently abled persons. While WORTH maintained its charitable character, since 1985 it has also conducted commercial manufacturing activities producing automo...