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The Employees
Compensation Act, 1923
Objectives ⚫ To provide employees and/or their dependents some relief in case of accidents arising out of and in the course of employment and causing either death or disablement of workmen. Scope and Coverage ⚫ The Act extends to the whole of India . The Workmen's Compensation (Amendment) Act, 2000. has brought all the workers within its ambit irrespective of their nature of employment i.e. whether employed on casual basis or otherwise than for the purposes of the employer's trade or business. For the first time, casual labourers will be provided compensation for death or disability.
⚫ The coverage of this act is also to employees employed
in hotels and restaurants. Employees Entitlement ⚫ Every employee/ contract worker/ casual employee, who suffers an injury in an accident arising out of and in the course of his employment, shall be entitled for compensation under the Act. ‘ Definition ⚫ Dependant means any of the following relatives of a deceased workman, namely: ⚫ a widow, a minor legitimate or adopted son and unmarried legitimate or adopted daughter, or a widowed mother, and ⚫ if wholly dependant on the earnings of the workman at the time of his death, a son or a daughter who has attained the age of 18 years ⚫ And any of the following wholly or partly dependent on the workman at the time of his death— a widower, a parent other than a widowed mother, a minor illegitimate son, a unmarried illegitimate daughter, a widowed daughter in law, a minor child of the deceased son & daughter & a paternal grandparent if not the parent of the workman is alive. Disablement :
⚫ Injury caused to a workman by an accident ordinarily
results in the loss of the earning capacity of the workman concerned and this loss of earning capacity is technically "disablement". ⚫ Disablements can be classified as (a) Total, and {b) Partial. ⚫ It can further be classified into (i) Permanent, and {ii) Temporary. Cont.. ⚫ Disablement, is said to be total when if Incapacitates a worker for all work he was capable of doing at the time of the accident resulting in such disablement. ⚫ "Total disablement" is considered to be permanent if a workman, as a result of an accident, suffers from the injury specified in Part I of Schedule I or suffers from such combination of injuries specified in Part II of Schedule I as would be the loss of earning capacity when totaled to one hundred per cent . ⚫ Disablement is said to be permanent partial when it reduces for all times, the earning capacity of a workman in every employment which he was capable of undertaking at the time of the accident. Every injury specified in Part II of Schedule I is deemed to result in permanent partial disablement. ⚫ Where the disablement is of a temporary nature and reduces the earning capacity of a workman in the employment in which he was engaged at the time of the accident it is "temporary partial disablement. Accident Compensation-when payable ⚫ The employer of any establishment covered under this Act, is required to compensate an employee: ⚫ who has suffered an accident arising out of and in the course of his employment, resulting into (i) death, (ii) permanent total disablement, (iii) permanent partial disablement, or (iv) temporary disablement ⚫ who has contracted an occupational disease accident arising out of and in the course of Employment ❒Accident arising out of and in the course of Employment ⚫ An accident arising out of employment implies a casual connection between the injury and the accident and the work done in the course of employment. Condition precedent for eligibility of compensation
The three tests for determining whether an accident
arose out of employment are : ⚫ At the time of injury employee must have been engaged in the business of the employer and must not be doing something for his personal benefit; ⚫ That accident occurred at the place where he was performing his duties; and ⚫ Injury must have resulted from some risk incidental to the duties of the service, or inherent in the nature or condition of employment. When is an Employer not liable to pay compensation ?
⚫ if the injury did not result in total or partial
disablement of a workman for a period exceeding three days, ⚫ if the workman was at the time of the accident under the influence of drink of drug, or ⚫ if the workman willfully disobeyed an order expressly given or a rule expressly framed for the purpose of securing safety of workman, or ⚫ If the workman willfully removed or disregarded any safety guard or other device which to his knowledge was provided for the purpose of securing his safety. ⚫ Exemptions: For death and total permanent disablement the above conditions do not apply Doctrine of Notional Extension: ⚫ The expression in the course of his employment’, is subject to the theory of notional extension;
⚫ This include an area which the workman passes and re-
passes in going to and in leaving the actual place of work.
⚫ There may be some reasonable extension in both time
and place and a workman may be regarded as in the course of his employment even though he had not reached or had left his employer's premises. AMOUNT OF COMPENSATION –section 4 ⚫ The amount of compensation payable to a workman depends on
❖the nature of injury caused by accident,
❖the monthly wages of the workman concerned, and ❖the relevant factor for working out lump sum equivalent of compensation amount as specified in Schedule IV.
⚫ There is no distinction between an adult and a minor
worker with respect to the amount of compensation. COMPENSATION FOR DEATH ⚫ In case of death resulting from injury, the amount of compensation shall be equal 50% of the monthly wages of the deceased workman multiplied by the relevant factor. ⚫ The monthly wages shall be taken as Rs.15,000/-
⚫ Or an amount of Rs 1,20.000/- whichever is more.
Example: ⚫ A workman is employed in a factory on a monthly wage of Rs 18000/- While working he met with an accident and dies on Feb, 2020/= His date of birth is july 18 , 1970. The amount of compensation payable to his dependent would be
50* monthly wages* Relevant factor of age 30
100
0r 1,20,000 whichever is higher
50* 15,000* 207.98 = 15,59,850
100 COMPENSATION FOR PERMANENT/PARTIAL TOTAL DISABLEMENT ⚫ In case of permanent total disablement resulting from the injury, the amount of compensation shall be 60% of the monthly wages of the injured workman multiplied by the relevant factor or Rs. 1,40,000/- whichever is more.
⚫ For the above example the compensation would be
60* 15000* 207.98 = 18,71,820/-
100 ⚫ If the disability is 50% the above amount shall be further divided by 50% ⚫ If the employee produces the bills for medical treatment it should be reimbursed by the employer COMPENSATION FOR TEMPORARY DISABLEMENT (TOTAL OR PARTIAL) ⚫ If the temporary disablement, whether total or partial results from the injury, the amount of compensation shall be a half monthly payment of the sum equivalent to 25% of the monthly wages of the workman to be paid in accordance with the provisions. ⚫ The half monthly payment shall be payable on the sixteenth day from the date of disablement where such disablement lasts for a period of 28 days or more compensation is payable from the date of disablement ⚫ In other cases after the expiry of a waiting period of three days from the date of disablement means 19th day from the disablement. COMPENSATION TO BE PAID WHEN DUE AND PENALTY FOR DEFAULT (section 4A) ⚫ As per this section, compensation has to paid within one month from it fell due ⚫ In case the employer does not accept the liability of paying the compensation, he is bound to deposit the extent of the liability he accepts with the commissioner or paid to the workman. If he defaults, the commissioner may order: ❖ the payment of the amount with interest at 12 % per year ❖ if the default to be unjustifiable then the commissioner may order payment of a further sum not exceeding 50% of the amount due, by way of penalty. ❖ In case of death of employee, the employer is bound to deposit the compensation amount with the Commissioner. He should also pay Rs.5000/- as funeral expenses to the family. He may pay not more than 3 months wages to the family. Payment of Compensation to Contract Labour ⚫ The principal employer is liable to pay compensation to contract labour in the same manner as his departmental labour. He is entitled to be indemnified by the contractor. The principal employer shall not however be liable to pay any interest and penalty leviable under the Act Occupational Diseases ⚫ Workers employed in certain types of occupations are exposed to the risk of contracting certain diseases which are peculiar and inherent to those occupations. A worker contracting an occupational disease is deemed to have suffered an accident out of and in the course of employment and the employer is liable to pay compensation for the same. Medical Examination ⚫ The employee shall issue notice to the employer as soon as the accident occurs; ⚫ The employer may get the concerned workman examined by a qualified medical practitioner, within 3 days from receiving the notice of accident. The employee must present himself for such examination otherwise he shall loose his right to the compensation. ⚫ Failure of employer to have the workman medically examined does not debar him from challenging the medical certificate produced by the workman. Obligations of Employers ⚫ To submit accident report to the Commissioner in the prescribed form within 7 days of the accident which results in death or a serious bodily injury to a workman.
⚫ To submit a statement to the Commissioner (within 30
days of receiving the notice) in the prescribed form, giving the circumstances attending the death of a workman as result of an accident and indicating whether he is liable to deposit any compensation for the same. ⚫ To maintain a notice book in the prescribed fromat at a place where it is readily accessible to the workman.
⚫ To submit an annual return of accidents specifying the
number of injuries for which compensation has been paid during the year, the amount of such compensation and other prescribed particulars. Obligations of Employees ⚫ To send a notice of the accident in the prescribed form, to the Commissioner and the employer, within such time as soon as it is practicable for him. This notice is precondition for the admission of the claim for compensation.