THE EMPLOYEES COMPENSATION ACT, 1923

1. THE EMPLOYEES COMPENSATION ACT, 1923

2. Introduction & Historical Background: • This Act may be called the Workmen's Compensation Act 1923. • It extends to the whole of India. • It has come into force on the first day of July 1924.

3. Objective • This act is to provide for the payment of certain classes of employers to their employees, of compensation for injury or death by accident.

4. Who is an Employer?

5. Employee:

6. Employee (contd..) i.) Driver ii) Helper iii) Mechanic iv) Cleaner v) Any other capacity in connection with a motor vehicle Motor vehicle

7. Employee (contd..) But does not include Employed in any other capacity as specified in Schedule II • Whether contract of employment was: • made before or after the passing of this Act • expressed or implied, oral or in writing; • member of the Armed Forces of the Union; • any reference to any employee who has been injured shall, where the employee is dead, include a reference to his dependants or any of them • Clerical staff LakshminarayanaShettyvsShantha And Anr. on 16 April, 2001

8. Employer's liability for compensation: PratapNarain Singh Deo v. SrinivasSabata, 1976

9. Employer's liability for compensation: Sec 2

10. Part C of Schedule III Employer's liability for compensation: Sec 2(A) a) Continous period as specified by Central Government b) while in the service of one or more employers c) Unless contrary proved All employers shall be liable for the payment of the compensation in such proportion as the Commissioner may in the circumstances deem just.

11. Sec 3. The Central Government or the State Government after giving by notification in the Official Gazette not less than three months' notice of its intention so to do may by a like notification add any description of employment to the employments specified in Schedule III and shall specify in the case of employments so added the diseases which shall be deemed for the purposes of this section to be occupational diseases peculiar to those employments respectively and thereupon the provisions of sub-section (2) shall apply in the case of a notification by the Central Government within the territories to which this Act extends or in case of and notification by the State Government within the State as if such diseases had been declared by this Act to be occupational diseases peculiar to those employments.

12. Blanning v. C. H. Bailey Ltd., 1942 Sec 4. Save as provided by sub-sections (2), (2A) and (3) no compensation shall be payable to a workman in respect of any disease unless the disease is directly attributable to a specific injury by accident arising out of and in the course of his employment.

13. Sec 5.Nothing herein contained shall be deemed to confer any right to compensation on a workman in respect of any injury if he has instituted in a civil court a suit for damages in respect of the injury against the employer or any other person; and no suit for damages shall be maintainable by a workman in any court of law in respect of any injury – if he has instituted a claim to compensation in respect of the injury before a Commissioner; or if an agreement has been come to between the workman and his employer providing for the payment of compensation in respect of the injury in accordance with the provisions of this Act.

18. Doctrine of Notional Extension: • The expression in the course of his employment', connotes not only actual work but also any other engagement natural and necessary thereto, reasonably extended both as regards work-hours and work-place. It refers to the time during which the employment continues. . However, this is subject to the theory of notional extension of the employer's premises so as to 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. This is also called as the Doctrine of Notional Extension. The doctrine of notional extension could not be placed in a strait jacket; it was merely a matter of sound common sense as to when and where and to what extent this doctrine could be applied.

19. Employer is not liable to pay compensation to a worker in the following cases:- • If the injury did not result in total or partial disablement for a period exceeding three days .This three days was substituted for seven days by a amendment in the act in 1959(w.e.f 1-6-1959). • In respect of any injury not resulting in death caused by an accident • which is directly attributed to :- • The workman having been at the time of accident under the influence • of drug or drink. • The willful disobedience of the workmen to an order expressly given , • or to a rule expressly framed for the purpose of securing the safety of • workmen. • The willful removal or disregard by the workman of any safety guard • or other devices which he knew to have been provide for the purpose • of securing the safety of workmen.

20. Following are the some more other remedies in favor of Employer:- Sec (10)(i) Notice and claim :- No Claim for compensation shall be entertained by the commissioner unless notice of the accident has been given in prescribed manner as soon as practicable after the happening thereof two years of the occurrence of the accident . Although there are some provisions available in favour of workmen. Sec(11)(ii) Medical Examination:- workman has to submit himself for medical examination by a qualified medical practitioner if so required by the employer or commissioner . if not his right to compensation shall be suspended during the continuance of such periods if he does not give sufficient cause of refusal. Sec(30)(i) Appeal :- An appeal shall lie to the high court from certain order of the commissioner , where substantial question of law is involved within 60 days.

21. AMOUNT OF COMPENSATION SEC 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.

22. In accordance with Section 4 of the Act, the amount of compensation payable will be as under : • Where death results from an injury, an amount equal to fifty percent of the monthly wages of the deceased workman multiplied by the relevant factor given in Schedule IV of the Act or an amount of One lakh and twenty thousand rupees whichever is more. • Examples: Shailesh , a worker aged 35 meets with an accident and dies while at work (i.e. in the course of employment). At the time he drew a monthly wage of Rs.2,500/-. As per Schedule IV of the Act the relevant factor applicable to his case would be Rs. 197.06. As such, the amount of compensation payable to his dependants will be arrived at in the following way: (i) 50% of Rs. 2,500 = 1,250 (ii) 1,250 x relevant factor (i.e.197.06) = Rs.2,46,325.00/- (total compensation payable) • Where the monthly wages of a worker is more than Rs.4000 /-, it is taken to be only Rs.4,000/- for calculating other compensation in case of the death , or permanent disablement.

23. Where permanent total disablement results from the injury an amount equal to sixty percent of the monthly wages of the injured workman multiplied by the above mentioned relevant factor or an amount of One lakh and fourty thousand rupees whichever is more. •  Examples: Sanjay Iyer , a worker aged 35 meets with an accident and suffers permanent total disablement while at work (i.e; in the course of the employment ) At the times he drew a monthly wage of Rs.2,500 /- The amount of compensation payable will be arrived at as follows : (i) 60 % of Rs.2,500=1,500 (ii) 1,500 X relevant factor (i.e; 197.06)=2,95,590.00/- (total compensation payable)

24. Where permanent partial disablement results from the injury- (i) in the case of an injury specified in part II of schedule I , such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by that injury, and (ii) in the case of an injury not specified in schedule I , such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner) permanently caused by the injury. • Where temporary disablement, whether total or partial, results from the injury, a half monthly payment of the sum equivalent to twenty five percent of monthly wages of the employee, to be paid in accordance with the provisions of sub section (2).

25. It may be borne in mind that the age given in first column of Schedule IV is the completed years of age on the last birth day of the workman immediately preceding the date on which the compensation fell due. The same may be worked out accordingly. • Where the monthly wages of a workman exceed Four thousand rupees, his monthly wages for the purpose of calculation of amount of compensation shall be deemed to be Four thousand rupees only. • For computing the monthly-wages, charges on the following counts shall also be included:- • Bonus • Accommodation • Ration • Clothing • Medical re-imbursement • Washing Allowance • The above charges will be calculated based on the SSR(standard schedule of rates) rates as circulated from time to time.

26. METHOD OF CALCULATING WAGES SEC 5: In this act and for the purposes thereof the expression “monthly wages” means the amount of wages deemed to be payable for a month’s service(whether the wages are payable by the month or by whatever other period or at piece rated),and calculated as follows, namely: (a). Where the workman has during a continuous period of not less than twelve months immediately preceding the accident, been in the service of the employer who is liable to pay compensation, the monthly wages of the workman shall be one twelfth of the total wages which have fallen due for payment to him by the employer in the last twelve months of that period.

27. (b). Where the whole of the continuous period of service immediately preceding the accident during which the workman was in the service of the employer who is liable to pay the compensation was less than one month, the monthly wages of the workman shall be average monthly amount which during the twelve months immediately preceding the accident was being earned by a workman employed on the same work by the same employer or if there was no workman so employed, by a workman employed on similar work in the same locality. (c). In other cases including cases in which it is not possible for want of necessary information to calculate the monthly wages under Para 11 above, the monthly wages shall be thirty times the total wages earned in respect of the last continuous period of service immediately preceeding the accident from the employer who is liable to pay compensation divided by the number of days comprising such period.

28. Dependency on employee. • Sec 2(d) "Dependent" means any of the following relatives of a deceased workman namely • (i) a widow a minor legitimate or adopted son an unmarried legitimate or adopted daughter or a widowed mother; and • (ii) 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 who is infirm;

29. (iii) if wholly or in part dependant on the earnings of the workman at the time of his Death- • (a) a widower • (b) a parent other than a widowed mother • (c) a minor illegitimate son an unmarried illegitimate daughter or a daughter legitimate or illegitimate or adopted if married and a minor or if widowed and minor. • (d) a minor brother or an unmarried sister or a widowed sister if a minor • (e) a widowed daughter-in-law • (f) a minor child of a pre-deceased son • (g) a minor child of a pre-deceased daughter where no parent of the child is alive or • (h) a paternal grandparent if no parent of the workman is alive;

30. COMMISSIONER • Definition:-According to this act “ commissioner” means a commissioner for workmen’s Compensation appointed under section 20. • Reference to commissioner:- • Sec 19 (1) if any question arises in any proceedings under this act as to the liability to the person to pay compensation (including any question as to whether a person insured is or is not a workman) or as to the amount or duration of compensation (including any question as to the nature or extent of disablement), the questionshall , in fault it of agreement, be settled by a commissioner. • Sec 19(2) No civil court shall have jurisdiction to settle, decide or deal with any question which is by or under this act required to be settled, decided or dealt with by a commissioner or to enforce any liability incurred under this act.

31. Appointment of commissioner • Sec20(1) the state government may, by notification in the official gazette appoint any person to be a commissioner for workmen compensation. • Sec 20(1A) a subject to the provision of sub section (1), no application for the settlement of any matter by a commissioner,(other than an application by a dependent or dependents for compensation ) shall be made unless and until some question has arisen between the parties in connection therewith which they have been unable to settle by agreement. • Sec 20(2) an application to a commissioner may be made in such a form and shall be accompanied by such fee,if any, as may be prescribed , and shall contain , in addition to any particulars which may be prescribed , the following particulars namely , • a concise statement of the circumstances in which the application is made and the relief and order which the applicant claims • in the case of a claim for compensation against an employer , the date of service of notice of the accident on the employer and ,and if such notice has not been served and or has not been served in due time, the person for such omission .

32. The names and address of the parties • Except in the case of an application by dependants for compensation a concise statement of matters on which agreement has and of those on which agreement has not been come to. • Sec 22(3) if the applicant is illiterate or for any other reason is unable to furnish the required information in writing, the application shall, if the applicant so desires, be prepared under the direction of the commissioner.

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