Charity Can’t Be a Cloak for Commerce: SC Orders Bonus for Workers in Profit-Making Trust-Run Factory

Worth Trust aimed to rehabilitate those who were cured of leprosy and disabled persons, and it made a noticeable impact in society. In 1985, the company started to mass-produce and sell auto and machine parts. Making this shift proved to be highly profitable, resulting in a lot of surplus money.

Those working in the factories involved pointed out that the Factories Act, 1948 already made them qualified for the Payment of Bonus Act, 1965, which would mean they should receive bonuses from the company profits. But Worth Trust resisted. It argued the institution was charitable and not-for-profit, which gave it exemption according to Sections 32(v)(a) and 32(v)(c) of the Bonus Act, just like the Indian Red Cross Society.

Still, the Supreme Court decided against it. The Court made it clear in its judgment on April 2, 2025 (SLP Civil No. 20474 of 2019), that the Trust’s active manufacturing work caused it to be regarded differently for labour-law purposes. It pointed out that Worth Trust gave up its connection with the Swedish Red Cross and even altered its trust deed, making it hard to compare it to the Indian Red Cross.

The Court made it clear: Just because a factory is run under a charitable trust doesn’t prevent the organization from meeting its obligations to employees. It decided that the employees deserved bonuses under the Act and ordered the Trust to guarantee a statutory bonus of at least 8.33% (minus any ex gratia payment already made from 1996-97) within one month from the date of the order.

The decision achieves a lot more than improved pay for workers. It shows that despite using charitable marketing, labour rights still need to be recognized, especially if the organization profits through its commercial activities.