The objective of the Employee's  Compensation Act, 1923 is to impose an obligation upon the employers to pay compensation to workers for accidents arising out of and in course of employment. This Act was amended in the year 2009 which brought few changes and improvement.The Employee's Compensation (Amendment) Bill, 2016  is passed by thr Lok Sabha but yet to be passed by the Rajya Sabha.

Bill Summary
The Workmen’s Compensation (Amendment) Bill, 2009

ƒ
The Bill amends the Workmen’s Compensation Act, 1923, which provides for payment of compensation to the workmen and their dependents in the case of injury or death by industrial accidents. The Act applies to a specified group of people such as those employed in factories, mines, and plantations.
  • ƒThe Bill substitutes the word“workman” with “employee” so that the law is applicable to all types of employees and is gender neutral. It also amends Schedule II to increase the list of persons who are included in the definition of workmen. For example, the Act only included those people who were employed in repairing or altering any article in a place with more than 20 employees. The Bill
  • includes all persons employed in such work by omitting the requirement that the place should have 20 employees.
  • ƒThe compensation to employees in case of injury or death is a percentage of their monthly wage or a specified amount, whichever is more. The Bill increases the specified amount in case of death from Rs 80,000 to Rs1.20 lakh. In case of permanent disablement, the amount is increased from Rs 90,000 to Rs 1.40 lakh.
  • ƒThe Bill allows the central government to revise the monthly wage from time to time.
  • ƒThe employee shall be reimbursed for any medical expense incurred for treatment of injuries during the course of employment.
  • ƒThe funeral expense of the deceased workman has been increased from Rs 2,500 to Rs 5,000. It also allows the central government to modify the amount from time to time.
  • ƒThe state government may appoint any person to be a Commissioner for Workmen’s Compensation. The Bill stipulates that the person should be a member of a State Judicial Service for a minimum of five years or an advocate or pleader for a minimum of five years or a Gazetted officer with minimum of five years service having educational qualification and experience in personnel management, human resource development and industrial development.
  • ƒThe Commissioner shall dispose of cases related to compensation within a period of three months from the date of reference.

Workmen's Compensation Act, 1923

The Act applies to any person who is employed otherwise than in a clerical capacity, in railways factories, mines, plantations, mechanically propelled vehicles, loading and unloading work on a ship, construction, maintenance and repairs of roads and bridges, electricity generation, cinemas, catching or trading of wild elephants, circus, and other hazardous occupations and other employment specified in Schedule II to the Act, Under Section 2(3) of the Act, the State Governments are empowered to extend the scope of the Act to any class of persons whose occupations are considered hazardous after giving three months' notice in the official gazette. The Act, however, does not apply to members serving in the Armed Forces of Indian Union, and employees covered under the provisions of the Employees' State Insurance Act 1988 as disablement and dependents' benefit is available under this Act.

Definition [Sec 2(1)]

(d) "Dependent" means any of the following relatives of a deceased (dead) workman, namely :-

(i)      a widow, a minor legitimate or adopted son, and unmarried legitimate or adopted daughter, or a widowed mother; and

(ii)    if wholly dependent 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;


The Employee's Compensation (Amendment) Bill, 2016 (Current Status: Passed by LS)
  • The Bill amends the Employee’s Compensation Act, 1923.  The Act provides payment of compensation to employees and their dependants in the case of injury by industrial accidents, including occupational diseases.
  • Duty to inform employee of right to compensation: The Bill introduces a provision which requires an employer to inform the employee of his right to compensation under the Act.  Such information must be given in writing (in English, Hindi or the relevant official language) at the time of employing him. 
  • Penalty for failure to inform: The Bill penalises an employer if he fails to inform his employee of his right to compensation.  Such penalty may be between fifty thousand to one lakh rupees.
  • Appeals from the Commissioner’s order: The Act provides that any dispute related to an employee’s compensation will be heard by a Commissioner (with powers of a civil court).  Appeals from the Commissioner’s order, related to a substantial question of law, will lie before the High Court. 
  • Further, the Act stipulates that appeals can be made against orders related to compensation, distribution of compensation, award of penalty or interest, etc. only if the amount in dispute is at least three hundred rupees.The Bill raises this amount to ten thousand rupees.  It permits the central government to further raise this amount.
  • Withholding payments pending appeal: Under the Act, if an employer has appealed against a Commissioner’s order, any payments towards the employee can be temporarily withheld.  The Commissioner may do so only by an order of the High Court, until the matter is disposed of by the Court.  The Bill deletes this provision.

(iii)   if wholly or in part dependent 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 a 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.

 

(f) "managing agent" means any person appointed or acting as the representative of another person for the purpose of carrying on such other person's trade or business, but does not include an individual manager subordinate to an employer;

(ff) "minor" means a person who has not attained the age of 18 years;

(g) "partial disablement" means, where the disablement is of a temporary nature, such disablement as reduces the earning capacity of a workman in any employment in which he was engaged at the time of the accident resulting in the disablement, and, where the disablement is of a permanent nature, such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time:

Ram, who worked in a printing business, got his fingers cut off by accident. This is “Partial Disablement” as it reduces his capacity to work in any such employment of similar nature.

Every injury specified in Part II of Schedule I shall be deemed to result in permanent partial disablement.

(l) "total disablement" means such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of the accident resulting in such disablement :

Permanent total disablement shall be deemed to result from every injury specified in Part I of Schedule I, mentioned below

or

from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the said Part II against those injuries, amounts to 100% or more;

As Sham can no longer work as a coolie or do any work of a similar nature because he lost his leg in an accident, he can be considered 100% disabled under this law.





Chapter II
Employee's Compensation


EMPLOYER'S LIABILITY FOR COMPENSATION. [Sec 3]

(1) If personal injury is caused to a employee by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter:

Employer shall not be liable to pay compensation in the following situations [Sec 3 (1)]

(a)       Any injury which does not result in the total or partial disablement of the workman for a period exceeding 3 days, employer is not liable to pay the compensation.

(b)      Accidents caused due to,

(i)     the workman having been at the time thereof under the influence of drink or drugs, (alcohol) or

(ii)    the willful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workmen, or

(iii)   the willful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of workmen,

 

Occupational Diseases.[Sec 3]

An occupational disease is any chronic ailment that occurs as a result of work or occupational activity. It is an aspect of occupational safety and health. An occupational disease is typically identified when it is shown that it is more prevalent in a given body of workers than in the general population, or in other worker populations.

[Sec 3 (2)]

If any injury or disease is caused which is specified in Part A, B and C of Schedule llI, it shall be deemed to have been an occupational disease or injury “arising out of and in the course of employment” enabling the employee to claim compensation.

Thus the Schedule III is divided in Part A, B & C in the following manner:—

If a employee employed in any employment specified in Part A of Schedule III contracts any disease specified therein it shall be presumed that such disease is “occupational disease” peculiar to that employment. For this no length of service is prescribed.

If a employee is employed in any employment specified in Part B of Schedule III for a period of 6 months and attracts any disease specified therein, it shall be presumed that such disease is “occupational disease” peculiar to that employment.

If a employee is employed in any employment specified in Part C of Schedule lll for a period as is prescribed by the Central Govt, attracts any disease specified therein as occupational disease, it shall be deemed to be an injury peculiar to that employment.

Those provision can be presented in the following table.

Occupational Diseases or Injuries could be arisen out of and in the course of employment
Schedule III read-with Section 3

Name of Diseases                                                 Length of the Service required
  1. As specified in Part A                                            No specific period of service prescribed
  2. As specified in Part B                                            6 months service required
  3. As specified in Part C                                            Period of Service as specified by the Central Govt.

The reason behind above conditions are, current employer shouldn’t be blamed for the occupational disease caused to an employee by the previous employment. There should be certain service time gap to decide whether current employer or previous employer is liable for the occupation disease caused to an employee.

Diseases which are specified in part A,B.& C of the Schedule lll, need not to be proved that they are 'occupational diseases' as they are already declared by schedule lll. In respect of any disease not covered by schedule lll, it is must for an employee to prove that such a disease was contracted in the course of employment.

SCHEDULE 3

LIST OF OCCUPATIONAL DISEASES


S. No.

Occupational disease

Employment

1

2

3

PART A

1

Infectious and parasitic diseases contracted in an occupation where there is a particular risk of contamination.

(a)  All work involving exposure to contracted in an occupation health or laboratory work;



(b) All work involving exposure to veterinary work;



(c)  Work relating to handling animals, animal carcasses, part of such carcasses, or merchandise which may have been contaminated by animals or animal carcasses;



(d) Other work carrying a particular risk of contamination.

2

Diseases caused by work in compressed air.

All work involving exposure to the risk concerned.

3

Diseases caused by lead or its toxic compounds.

All work involving exposure to the risk concerned.

4

Poisoning by nitrous fumes.

All work involving exposure to the risk concerned.

5

Poisoning by organo phosphorus compounds.

All work involving exposure to the risk concerned.

PART B

1

Diseases caused by phosphorus or its toxic compounds.

All work involving exposure to the risk concerned.

2

Diseases caused by mercury or its toxic compounds.

All work involving exposure to the risk concerned.

3

Diseases caused by benzene or its toxic homologues.

All work involving exposure to the risk concerned.

4

Diseases caused by nitro and amido toxic derivatives of benzine or its homologues

All work involving exposure to the risk concerned.

5

Diseases caused by chromium, or its toxic compounds

All work involving exposure to the risk concerned.

6

Diseases caused by arsenic or its toxic compounds.

All work involving exposure to the risk concerned.

7

Diseases caused by radioactive substances or radiations.

All work involving exposure to the substances and ionising action of radioactive ionising radiations.

8

Primary epitheliomatous cancer of the skin, caused by tar, pitch, bitumen, mineral oil, anthracene, or the compounds, products or residues of these substances.

All work involving exposure to the risk concerned.

9

Disease caused by the toxic halogen derivatives of hydrocarbons (of the aliphatic and aromatic series).

All work involving exposure to the risk concerned.

10

Diseases caused by carbon disulphide.

All work involving exposure to the risk concerned.

11

Occupational cataract due to infra-red radiations.

All work involving exposure to the risk concerned.

12

Diseases caused by manganese or its toxic compounds.

All work involving exposure to the risk concerned.

13

Skin diseases caused by physical, chemical or biological agents not included in other items.

All work involving exposure to the risk concerned.

14

Hearing impairment caused by noise.

All work involving exposure to the risk concerned.

15

Poisoning by dinitrophenol or a homologue or by substituted dinitrophenol or by the salts of such substances.

All work involving exposure to the risk concerned.

16

Diseases caused by beryllium or its toxic compounds.

All work involving exposure to the risk concerned.

17

Diseases caused by cadmium or its toxic compounds.

All work involving exposure to the risk concerned.

18

Occupational asthma caused by recognised sensitising agents inherent to the work process.

All work involving exposure to the risk concerned.

19

Diseases caused by fluorine or its toxic compounds.

All work involving exposure to the risk concerned.

20

Diseases caused by nitroglycerine or other nitroacid esters.

All work involving exposure to the risk concerned.

21

Diseases caused by alcohols and ketones.

All work involving exposure to the risk concerned.

22

Diseases caused by asphyxiants carbon monoxide, and its toxic derivatives, hydrogen sulfide.

All work involving exposure to the risk concerned.

23

Lung cancer and mesotheliomas caused by asbestos.

All work involving exposure to the risk concerned.

24

Primary neoplasm of the epithelial lining of the urinary bladder or the kidney or the ureter.

All work involving exposure to the risk concerned.

25

Snow blindness in snow bound areas.

All work involving exposure to the risk concerned.

26

Disease due to effect of cold in extreme cold climate.

All work involving exposure to the risk concerned.

27

Disease due to effect of cold in extreme cold climate.

All work involving exposure to the risk concerned.

PART C

1

Pneumoconioses caused by sclerogenic mineral dust (silicosis, anthraoosilicosis, asbestosis) and silico-tuberculosis provided that silicosis is an essential factor in causing the resultant incapacity or death.

All work involving exposure to the risk concerned.

2

Bagassosis.

All work involving exposure to the risk concerned.

3

Bronchopulmonary diseases caused by cotton, flax hemp and sisal dust (Byssinosis).

All work involving exposure to the risk concerned.

4

Extrinsic allergic alveelitiscaused by the inhalation of organic dusts.

All work involving exposure to the risk concerned.

5

Bronchopulmonary diseases caused by hard metals.

All work involving exposure to the risk concerned.

6

Acute Pulmonary Oedema of High Altitude.

All work involving exposure to the risk concerned.


AMOUNT OF COMPENSATION [Sec 4]

  1. This section deals with how compensation is to be calculated for injured or deceased employee.
  2. Calculation of the compensation is made on the monthly wage or salary of employee.
  3. The amount of compensation varies from employee death, permanent total disablement, permanent partial disablement and temporary disablement.

 SCHEDULE I

PART I

LIST OF INJURIES DEEMED TO RESULT IN PERMANENT TOTAL DISABLEMENT

Serial
No.

Description of injury

% Percentage of loss of earning capacity

1

Loss of both hands or amputation at higher sites

100

2

Loss of a hand and foot

100

3

Double amputation through leg or thigh, or amputation through leg or thigh on one side and loss of other foot

100

4

Loss of sight to such an extent as to render the claimant unable to perform any work for which eye sight is essential

100

5

Very severe facial disfigurement

100

6

Absolute deafness

 

 

PART II
LIST OF INJURIES DEEMED TO RESULT IN PERMANENT PARTIAL DISABLEMENT
Amputation Cases - Upper limbs - Either arm

1

Amputation through shoulder joint

90

2

Amputation below shoulder with stump less than
20.32 cms. from tip of acromion

80

3

Amputation from 20.32 cms. from tip of acromion to less than 4" below tip of olecranon

70

4

Loss of a hand or of the thumb and four fingers of one hand or amputation from 11.43 cms. below tip of olecranon

60

5

Loss of thumb

30

6

Loss of thumb and its metacarpal bone

40

7

Loss of four fingers of one hand

50

8

Loss of three fingers of one hand

30

9

Loss of two fingers of one hand

20

10

Loss of terminal phalanx of thumb

20

Amputation cases - Lower limbs

10A

Guillotine amputation of tip of thumb without loss of bone

10

11

Amputation of both feet resulting in end bearing stumps

90

12

Amputation through both feet proximal to the metatarso-phalangeal joint

80

13

Loss of all toes of both feet through the metatarso-phalangeal joint

40

14

Loss of all toes of both feet proximal to the proximal inter-phalangeal joint

30

15

Loss of all toes of both feet distal to the proximal inter-phalangeal joint

20

16

Amputation at hip

90

17

Amputation below hip with stump not exceeding 12.70 cms. in length measured from tip of great trenchanter but not beyond middle thigh

80

18

Amputation below hip with stump exceeding 12.70 cms. in length measured from tip of great trenchanter but not beyond middle thigh

70

19

Amputation below middle thigh to 8.89 cms. below knee

60

20

Amputation below knee with stump exceeding 8.89 cms. but not exceeding 12.70 cms.

50

21

Amputation below knee with stump exceeding 12.70 cms.

50

22

Amputation of one foot resulting in end bearing

50

23

Amputation through on foot proximal to the metatarso-phalangeal joint

50

24

Loss of all toes of one foot through the metatarso-phalangeal joint

20

Other injuries

25

Loss of one eye, without complications, the other being normal

40

26

Loss of vision of one eye, without complications or disfigurement of eyeball, the other being normal

30

26A

Loss of partial vision of one eye

10

Loss of -
A - Fingers of right or left hand
Index finger

27

Whole

14

28

Two phalanges

11

29

One phalanx

9

30

Guillotine amputation of time without loss of bone

5

Middle finger

31

Whole

12

32

Two phalanges

9

33

One Phalanx

7

34

Guillotine amputation of tip without loss of bone

4

Ring or little finger

35

Whole

7

36

Two phalanges

6

37

One Phalanx

5

38

Guillotine amputation of tip without loss of bone

2

B - Toes of right or left foot
Great toe

39

Through metatarso-phalangeal joint

14

40

Part, with some loss of bone

3

Any other toe

41

Through metatarso-phalangeal joint

3

42

Part with some loss of bone

1

Two toes of one foot, excluding great toe

43

Through metatarso-phalangeal joint

5

44

Part, with some loss of bone

2

Three toes of one foot, excluding great toe

45

Through metatarso-phalangeal joint

6

46

Part, with some loss of bone

3

Four toes of one foot, excluding great toe

47

Through metatarso-phalangeal joint

9

48

Part-with some loss of bone

3


SCHEDULE IV

(See section 4)

FACTORS FOR WORKING OUT LUMP SUM EQUIVALENT OF COMPENSATION AMOUNT IN CASE OF PERMANENT DISABLEMENT AND DEATH.


     

Completed years of age on the last birthday

of the employee immediately preceding the

date on which the compensation fell due   

Factors

Not more than

16

.

.

.

.

.

.

228.54


17

.

.

.

.

.

.

227.49


18

.

.

.

.

.

.

226.38


19

.

.

.

.

.

.

225.22


20

.

.

.

.

.

.

224


21

.

.

.

.

.

.

222.71


22

.

.

.

.

.

.

221.37


23

.

.

.

.

.

.

219.95


24

.

.

.

.

.

.

218.47


25

.

.

.

.

.

.

216.91


26

.

.

.

.

.

.

215.28


27

.

.

.

.

.

.

213.57


28

.

.

.

.

.

.

211.79


29

.

.

.

.

.

.

209.92


30

.

.

.

.

.

.

207.98


31

.

.

.

.

.

.

205.95


32

.

.

.

.

.

.

203.85


33

.

.

.

.

.

.

201.66


34

.

.

.

.

.

.

199.4


35

.

.

.

.

.

.

197.06


36

.

.

.

.

.

.

194.64


37

.

.

.

.

.

.

192.14


38

.

.

.

.

.

.

189.56


39

.

.

.

.

.

.

186.9


40

.

.

.

.

.

.

184.17


41

.

.

.

.

.

.

181.37


42

.

.

.

.

.

.

178.49


43

.

.

.

.

.

.

175.54


44

.

.

.

.

.

.

172.52


45

.

.

.

.

.

.

169.44


46

.

.

.

.

.

.

166.29


47

.

.

.

.

.

.

163.07


48

.

.

.

.

.

.

159.8


49

.

.

.

.

.

.

156.47


50

.

.

.

.

.

.

153.09


51

.

.

.

.

.

.

149.67


52

.

.

.

.

.

.

146.2


53

.

.

.

.

.

.

142.68


54

.

.

.

.

.

.

139.13


55

.

.

.

.

.

.

135.56


56

.

.

.

.

.

.

131.95


57

.

.

.

.

.

.

128.33


58

.

.

.

.

.

.

124.7


59

.

.

.

.

.

.

121.05


60

.

.

.

.

.

.

117.41


61

.

.

.

.

.

.

113.77


62

.

.

.

.

.

.

110.14


63

.

.

.

.

.

.

106.52


64

.

.

.

.

.

.

102.93


65 or more

.

.

.

.

.

  99.37




Method of calculating wages: [section 5]

The method of calculating monthly wage is prescribed and it is laid down that way to the workman has worked during a continuous period of not less than 12 months, the monthly wage shall be 1/12 of the total wages fallen due to him by the employer in the last 12 months ( clause (a)).

Where Workman was employed for less then a month
the monthly wages of the workmen shall be calculated on the basis of the wages earned by the workmen employed by such employer for the similar work. If no such other workman is employed, then wages shall be calculated on the basis of the wages paid to a workman employed on similar work in the same locality.

where the calculation is not possible in both ways as explained above, then the monthly wages shall be 30 times the total wages earned by the workman divided by the number of days comprising such period.

For calculating the continuous service under this section, the absence of 14 days shall not be treated as interruption.


Circumstances under which employer is liable to pay compensation to the employee

Compensation in case of death of employee [Sec 4(1) (a)]

While calculating the compensation of the workman, age of the workman and relevant factor is taken in to account.


50% of monthly wages of the deceased employee X relevant factor with corresponding age of injured workman specified in Schedule IV.
or
1,20,000/- rupees of compensation.
Whichever is more.

Example: Muniyappa, 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)

Compensation in case of permanent total disablement [Sec 4(1) (b)]


60% of monthly wages of employee X relevant factor with corresponding age  of injured workman specified in Schedule IV .
or
1, 40,000/- rupees of compensation.
Whichever is more.

For above the calculation of the compensation in case of death or permanent partial disablement, the monthly wage of workman is limited to 4000/- Rupees only. Or the government may prescribe and change the monthly wage  amount for calculation of the compensation.

Example: Shyam, a worker aged 35 meets with an accident and suffers permanent total disablement while at work (i.e. in the course of employment) At the time she 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)

‘‘Provided that the Central Government may, by notification in the Official Gazette, from time to time, enhance the amount of compensation mentioned in above both cases"



Compensation in case of permanent partial disablement [Sec 4(1) (c)]


Injury specified in Part II of Schedule I.

The calculation of the compensation is similar to that of permanent total disablement.

Example:
                                                                    Part II of schedule I
Nature of injury                                                                                            Percentage of loss of disablement

(1)   Amputation to shoulder joint                                                                              90%
(2)   Amputation to below shoulder                                                                            80%
(3)   loss of fingers of one hand                                                                                 50%
(24) Loss of all toes of one foot                                                                                 20%
(48) part of some loss of bone                                                                                     3%

Part II of schedule I contains 48 entries specifying various nature of injuries in left-hand column and corresponding percentage of disablement.

In case of (1) Amputation to shoulder joint
90% of monthly wages of employee X relevant factor with corresponding age  of injured workman specified in Schedule IV .
or
1, 40,000/- rupees of compensation.
Whichever is more.


More injuries than one are caused by the same accident

All injuries compensation caused by same accident will be added but compensation amount payable should not exceed more than what would have been payable in the case of permanent partial disablement.

In case of an injury not specified in the scheduled I


Percentage of total permanent disablement as is proportionate to the loss of earning capacity as may be determined by the medical practitioner.

In case of temporary disablement with the total or partial results from the injury
  1. Employer is liable to reimburse the actual medical expenditure incurred by the employee for treatment of injuries caused to during the course of employment.
  2. Employer is liable to pay injured employee with half monthly wages for a period of disablement, subject to a maximum of five years.

Medical examination -  [Section 11]

  • In case of payment of half monthly wages to an employee, such employee may be required to produce himself before the doctor at such intervals according to [Medical examination -  Section 11(1)]
  • if the employee refuses to produce himself before the doctor as required by the employer, for free of cost, in such case, employee  right to any compensation will be rejected during the period of his refusal or failure to appear before the doctor. [Section 11(2)]
  • if the employee leaves the vicinity of his place of employment without medical examination, employee right to compensation shall be rejected until he returns and offers himself a medical examination [Section 11(3)].
  • if the employee dies without such medical examination, the Commissioner of employee's compensation, if he thinks fit, may direct the payment of compensation to the dependents of the employee [Section 11(4)].
  • If the injury of any injured employee is aggravated due to his failure or refusal to appear for a medical examination or after having so appeared, failure to follow the instructions of Doctor, in that case such employee will not be entitled to any compensation for the aggravated injuries but will be entitled to injuries only resulted in the disablement if the employee had regularly attended and followed the instructions of the doctor [Section 11(6)]
NOTE: If the injury to the employee caused disablement for not more 3 days, in such a case employer is not liable to pay any compensation to the employee, except the medical expenditure


Compensation in case of Temporary disablement [Sec 4(1) (d)]

Ramamurthy (Road sweeper employed on contract basis for Bangalore City Corporation) slipped and fell from a garbage truck and fractured his hand. He could not work for one month. This is temporary disablement.

In case of temporary disablement, payments equal to 25 % of the workers' wages shall be made at fortnightly intervals (every two weeks). [Sec 4(2)] In case the disablement lasts for more than 28 days, the employer should make the payment on the 16th day from the day of the disablement.

If the period of disablement lasts for less than 28 days, the payment shall be made after the expiry of 3 days. This wait for 3 days is to ascertain how long the temporary disablement will last—less than/equal to 28 days or more.

In case the employer makes any payment to the worker before the payment of this half monthly (every two weeks) or lump sum amount, it shall be deducted from any lump sum or half-monthly payments. [Section 4 (2) (a)]

[Sec 4(2A)]

The employee shall be reimbursed the actual medical expenditure incurred by him for treatment of injuries caused during course of employment.

If the injury of the workman results in his death, [Sec 4(4)]

The employer shall, in addition to the compensation for death as calculated above, deposit with the Commissioner a sum of Rs.5000/- for payment of the same to the eldest surviving dependent of the workman towards the expenditure of the funeral of such workman or if the workman did not have a dependent or was not living with his dependent at the time of his death, the funeral expenditure should be paid to the person who actually incurred such expenditure.


‘‘Provided that the Central Government may, by notification in the Official Gazette, from time to time, enhance the amount of towards the funeral expenditure"


COMPENSATION TO BE PAID WHEN DUE AND PENALTY FOR DEFAULT. [Sec  4A].

Employer must pay the compensation to the workman within one month of time. If employer fails to pay the compensation within one month of time, the commissioner can direct the employer to pay Compensation amount by adding 12% of simple interest per annum  or specified by the Central Government.

If there is no proper reason or there is no justification by the employer for  delay in payment of compensation, in that case the commissioner can direct the employer to pay extra sum of not exceeding 50% of compensation amount as the penalty. [Sec 4A (b)]


REVIEW [Sec 6]

  • In the case of temporary disablement of the workman, employer should pay the amount as compensation for every two weeks.
  • If workman condition is improving, employer can make a application to the commissioner for reduction of compensation amount payable
  • If the workman condition is becoming worse, with the help of the qualified medical practitioner can make an application to commissioner for increase in compensation amount payable for every two weeks.
  • If the accident is found to have resulted in permanent disablement, be converted to the lump sum to which the workman is entitled less any amount which he has already received by way of half-monthly payments.

COMMUTATION OF HALF-MONTHLY PAYMENTS [Sec 7]

In the case of temporary disablement of the workman, his compensation amount can settlement by way of lump sum amount or can make an application to commissioner for settlement of lump sum amount after a period of at least 6 months.


DISTRIBUTION OF COMPENSATION. [Sec 8]

  • Compensation must be paid to the dependents only. No other persons except dependents having are right to claim compensation.
  • Compensation should not be paid directly to the workman by his employer in case of injury or death etc.
  • Employer should deposit the workman compensation with the commissioner.
  • The deposited compensation to workman shall be paid through the commissioner to the workman.
  • If no dependent is there for deceased (dead) workman, there is no necessity to pay compensation by the employer. [Sec 8 (4)].
  • If two or more dependents exist for a deceased workman, the compensation amount shall be distributed by the commissioner according to his wish. [Sec 8 (5)].
  • If the workman dependent is of legal disability ((a minor), or mental capacity) or neglect of children, the compensation amount shall be invested for their according to the directions of the commissioner.

Compensation not to be assigned, attached or charged [Sec 9]


Except to the workman, compensation should not be passed or attached to other person. Only in case of death of the employee, such compensation should be given to his/her dependents.


NOTICE AND CLAIM. [Sec 10]

After the occurrence of the accident to the workman, giving notice to the employer is must.
After the occurrence of the accident to workman or the death of the workman, with in 2years notice should be given to the employer.
Without giving notice of accident or death of the workman, claim of compensation is not considered by the commissioner.
Every notice given to employer about the accident of the workman should contain the following details.
a) Name of the injured workman.
b) Address of the injured workman.
c) Date on which the accident happened.
Notice should be registered post addressed.

POWER TO REQUIRE FROM EMPLOYERS STATEMENTS REGARDING FATAL ACCIDENTS.[Sec 10A]

Commissioner receives information from any source about the death of the workman or the occurrence of the accident to the workman under employment, he is having power to send notice to employer through registered post demanding the employer fro explanation about the cause and reasons for the accident or the death of the workman.

Within 30 days from the receipt of the notice from commissioner by the employer has to submit all the details of the accident or the death of the workman. Employer should mention whether he is liable to pay the compensation or not liable to pay the compensation to the workman.

  • If employer accepts the liability to pay the compensation to the workman, employer should deposit the compensation with the commissioner with in 3oday from the receipt of the notice.
  • If employer rejects the liability to the compensation to the workman, employer should mention all details why he is not so liable.

REPORTS OF FATAL ACCIDENTS AND SERIOUS BODILY INJURIES. [Sec 10B]

After the occurrence of the accident results in death of the workman, or serious bodily injury of the workman, employer should give notice  to the authority appointed by the state government within 7 days.

Explanation : "Serious bodily injury" means an injury which involves, or in all probability will involve, the permanent loss of the use of, or permanent injury to, any limb, or the permanent loss of or injury to the sight or hearing, or the fracture of any limb, or the enforced absence of the injured person from work for a period exceeding twenty days.


CONTRACTING. [Sec 12]

In case of contracting, the principal (person who employed the workman fro contract) or contractor (principal for the purposes of his trade or business contracts with any other person) is liable to pay the compensation to the employed workman who is injured.

INSOLVENCY OF EMPLOYER [Sec 14]

In the case where the employer of the worker has entered into an agreement with insurers (insurance company), to pay compensation and subsequently the employer (may be company) becomes insolvent or closing down of company, then in the event of any accident happening, the employer’s liabilities will be transferred to the insurers, and they would be treated as the employers of the aggrieved worker for the purpose of paying compensation.

Compensation cannot be claimed from the insurer in any case in which the workman fails to give notice to the insurers of the happening of the accident and of any resulting disablement as soon as practicable after he becomes aware of the institution of the insolvency or liquidation proceedings.

If the liability of the insurers is to be less than that of the original employers, then the worker can claim the balance amount from the insolvency proceedings. [Sec 4(2)]

If employer has taken insurance to cover claims arising out of workers’ accidents, the insurance company will be responsible to pay compensation. It is interesting that in such cases were an employer has taken insurance and the employer will back the worker’s claim against the insurance company! Naturally, as insurance company is not responsible to pay the worker compensation. The practice of taking insurance is common only amongst the bigger contractors/ companies.

In the case of the compensation being half monthly payments (every two weeks), the insurers may convert that to an appropriate lump sum and pay that compensation to the worker. [Sec14 (5)]



SPECIAL PROVISIONS RELATING TO MASTERS AND SEAMEN. [Sec 15]

  • Master of the ship is treaded as the employer and seamen are treated as the workman employed under him.
  • Notice of the accident and disablement to the seaman is not necessary, if it has happened on board of the ship.
  • In the case of the death of a master or seaman, the claim for compensation shall be made within one year after the news of the death has been received by the claimant. [Sec 15(2)]
  • In case ship has lost the claim for compensation by claimant shall be made within 18 months from the date ship is lost.

SPECIAL PROVISIONS RELATING TO CAPTAINS AND OTHER MEMBERS OF CREW OF AIRCRAFT'S. [Sec 15A]

  • Captain of the aircraft is treaded as the employer and crew are treated as the workman employed under him.
  • Notice of the accident and disablement to the crew is not necessary, if it has happened on board of the aircraft.
  • In the case of the death of a Captain of the aircraft r or crew, the claim for compensation shall be made within one year after the news of the death has been received by the claimant. [Sec 15A(2)]
  • In case aircraft has lost, the claim for compensation by claimant shall be made within 18 months from the date ship is lost..

SPECIAL PROVISIONS RELATING TO WORKMEN ABROAD OF COMPANIES AND MOTOR VEHICLES. [Sec 15B]

(i) in the case of workmen who are persons recruited by companies registered in India and working as such abroad, and

(ii) persons sent for work abroad along with motor vehicles registered under the Motor Vehicles Act, 1988 (59 of 1988) as drivers, helpers, mechanics, cleaners or other workmen, subject to the following modifications, namely :- (1) The notice of the accident and the claim for compensation may be served on the local agent of the company, or the local agent of the owner of the motor vehicle, in the country of accident, as the case may be,

(2) In the case of death of the workman in respect of whom the provisions of this section shall apply, the claim for compensation shall be made within one year after the news of the death has been received by the claimant:


CONTRACTING OUT [Sec 17]

Any contractor agreement made for give-up of compensation from the employer in case of the accident or the death of the workman is void and not valid.


PENALTIES. [Sec 18A.]
Fine of rupees 5000/- as the punishment for disobeying the following
  1. Fails to maintain the notice-book of the workman employed at premises by the employer.
  2. Employer fails to send a statement with in 30days of the receipt of the notice from commissioner demanding the reasons for cause of the accident to the workman.
  3. Employer fails to send a statement with in 7days to the commissioner the reasons for cause of the serious bodily injuries to the workman.
  4. Employer fails to mention correct number of injuries for which compensation has to be paid.

APPOINTMENT OF COMMISSIONER. [Sec 20]
(1) The State Government may, by notification in the Official Gazette, appoint any person who is or has been a member of a State Judicial Service for a period of not less than five years or is or has been for not less than five years an advocate or a pleader or is or has been a Gazetted officer for not less than five years having educational qualifications and experience in personnel management, human resource development and industrial relations”

(2) Where more than one Commissioner has been appointed for any area, the State Government may, by general or special order, regulate the distribution of business between them.

(3) Any Commissioner may, for the purpose of deciding any matter referred to him for decision under this Act, choose one or more persons possessing special knowledge of any matter relevant to the matter under inquiry to assist him in holding the inquiry.

(4) Every Commissioner shall be deemed to be a public servant within the meaning of the Indian Penal Code (45 of 1860).

FORM OF APPLICATION [Sec 22]

  • Application should be made before the commissioner by the dependents of the workman for claiming the compensation
  • Fee is necessary for Application to commissioner. [sec 22(2)]
  • Application form should consist the following details

a)      Reason for application for compensation

b)      Relief they need.

c)       Claims

  • Date of the notice given to the employer about the accident of the employer
  • If application is illiterate, he or she can take help of other person in preparing the application form.

REGISTRATION OF AGREEMENTS.[Sec 28]


When there is agreement (memorandum) of compensation in between workman and employer for lump sum amount settlement against the half monthly payments (every two weeks payments) to the women or a person under a legal disability, employer should sent the memorandum to the commissioner.

Memorandum should not be obtained by fraud, undue influence or other improper means. If the commissioner satisfies with memorandum, it shall be registered.

[Sec 29]
If memorandum of agreement is not send to commissioner by the employer shall be liable to pay the full amount of compensation which he is liable to pay.


Appeals [Sec 30]
In the following circumstance the employer or workman can appeal to High court of that state

(a) an order awarding as compensation a lump sum whether by way of redemption of a half-monthly payment or otherwise or disallowing a claim in full or in part for a lump sum;
(aa) an order awarding interest or penalty under section 4A;
(b) an order refusing to allow redemption of a half-monthly payment;
(c) an order providing for the distribution of compensation among the dependants of a deceased workman, or disallowing any claim of a person alleging himself to be such dependant;
(d) an order allowing or disallowing any claim for the amount of an indemnity under the provisions of sub-section (2) of section 12; or
(e) an order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions :