The parliamentary Industry, Commerce and Consumer Welfare Protection Committee on Wednesday directed the Finance Ministry to revise the draft bill to amend the Bonus Act 1973 due to an ambiguous provision regarding the distribution of bonus by public enterprises to their employees. 

As per the proposed amendment, for-profit government companies will be allowed to distribute a part of the profits as bonus to their employees if they have cleared all contingencies and loan liabilities. However, not-for-profit public enterprises have been barred from distributing bonus. 

Expressing concern over the recent move by Nepal Oil Corporation (NOC) to distribute bonus, lawmakers said the government needed to clearly define the oil monopoly’s status. 

NOC has set aside Rs2.36 billion from the profits of the last two years to award its employees a bonus. The move has drawn flak as it has not allocated funds to repay loans taken from the Infrastructure Development Fund. 

NOC has been charging customers Rs5 per litre extra for gasoline to repay the loan and contribute to the fund.

“Moreover, the government has not clearly defined the role of the state-owned monopoly which is the sole supplier of an essential commodity,” said Subash Chandra Thakuri, coordinator of the sub-committee of the House panel. “We have allocated the money to comply with the law that says that 10 percent of the net profit should be set aside as bonus for employees,” said NOC Acting Deputy Managing Director Nagendra Sah. 

Ishwor Nepal, secretary of the Office of the Auditor General, said there was no clear categorization of NOC as a for-profit or not-for-profit government entity. 

“The Bonus Act is not applicable to NOC as it has a monopoly on essential products, and being a state enterprise, there is no line separating management and workers or shareholders,” he said. 

“It is not appropriate that government bodies such as NOC that deal in essential commodities should look to maximise profits instead of working to ensure people’s welfare,” lawmaker Rajya Laxmi Shrestha said.