Employee's Compensation Act, 1923 - (AMENDMENT) ACT, 2017 - accident at work - occupational disease - disability benefits
Employee's Compensation Act, 1923 - (Amendment) Act, 2017
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;
(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.
‘(dd) “employee” means a person, who is—
(i)_a railway servant as defined in clause (34) of section 2 of the Railways Act, 1989, not permanently employed in any administrative district or sub-divisional office of a railway and not employed in any such capacity as is specified in Schedule II; or
(ii) (a) a master, seaman or other member of the crew of a ship,
(b) a captain or other member of the crew of an aircraft,
(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with a motor vehicle,
(d) a person recruited for work abroad by a company,
and who is employed outside India in any such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as the case may be, is registered in India; or
(iii) employed in any such capacity as is specified in Schedule II, whether the contract of employment was made before or after the passing of this Act and whether such contract is expressed or implied, oral or in writing; but does not include any person working in the capacity of a member of the Armed Forces of the Union; and any reference to any employee who has been injured shall, where the employee is dead, include a reference to his dependents or any of
(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
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.
Whether an employee earning more than the wage ceiling stipulated under the Employees' State Insurance Act, 1948 is eligible to claim compensation under Employee's Compensation Act? In the matter of the S. Palanivel v. Deputy Commissioner of Labour, Salem, [M.A. Nos. 204 of 2020 and 2523 of 2017 decided on July 31, 2020], the Madras High Court held that, an employee, whose wages exceed the ceiling limit specified under the ESI Act making him ineligible to claim compensation under the ESI Act, is entitled to claim compensation under the Employee's Compensation Act.
Union of India v. K.M. Shankarappa, (2001) 1 SCC 582,
The executive has to obey judicial orders. Without enacting an appropriate legislation, the executive or the legislature cannot set at naught a judicial order.
The Code replaces the following four laws: (i) the Payment of Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal Remuneration Act, 1976.
Proposed & drafted Labour Laws
LABOUR CODE ON INDUSTRIAL RELATIONS BILL, 2015
LABOUR CODE ON WAGES BILL, 2015
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:
Whether an assault caused to an employee while he was driving a vehicle on duty can be considered to be an accident arising out of or in course of the employment in terms of Section 3 of the Employee's Compensation Act?
In the matter of the Branch Manager, SBI General Insurance Company Limited v. Sri Dulal Debnath, [MFA(E/C) NO.05 OF 2019 decided on June 12, 2020], the Tripura High Court, by relying on the definition of 'accident' as provided in the Halsbury's Laws of England, held that an assault can be considered to be an accident, since the assault was an unlooked-for mishap or untoward event which brought about personal injury to the workman.
Further, with respect to the question, as to whether such an accident can be considered as sustained in course of and arising out of his employment, the Tripura High Court, by relying on the Bombay High Court judgment in the case of Trustees of the Port of Bombay v. Yamunabai, [AIR 1952 Bom 382], answered the question in affirmative, by noting that when the incident of assault on the employee had happened, there was a causal relationship between the accident and the employment i.e. the accident had occurred on account of a risk which is an incident of the employment. Therefore, the incident of assault was held to be an accident arising out of or in course of the employment.
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 employees, 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 employees,
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
As specified in Part A No specific period of service prescribed
As specified in Part B 6 months service required
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.
AMOUNT OF COMPENSATION [Sec 4]
This section deals with how compensation is to be calculated for injured or deceased employee.
Calculation of the compensation is made on the monthly wage or salary of employee.
The amount of compensation varies from employee death, permanent total disablement, permanent partial disablement and temporary disablement.
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.
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 .
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 clauses (a) and (6).”;
Whether a disablement suffered by an employee, which does not fall under the category of scheduled injury specified under the Employee's Compensation Act, is entitled to claim compensation in accordance with Section 4(1)(b) of the Employee's Compensation Act?
In the matter of National Insurance Company Limited v. Dheeraj Singh, [MA No. 140/2013 decided on August 7, 2020], the Jammu and Kashmir High Court held that, an employee is entitled to claim compensation computed in accordance with Section 4(1)(b) (Amount of compensation) of the Employee's Compensation Act, even if the cause for the disablement is not a scheduled injury but comes within the purview of the definition of 'total disablement'.
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.
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 .
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.
(1-A) Notwithstanding anything contained in sub-section (1), while fixing the amount of compensation payable to a workman in respect of an accident occurred outside India, the Commissioner shall take into account the amount of compensation, if any, awarded to such workman in accordance with the law of the country in which the accident occurred and shall reduce the amount fixed by him by the amount of compensation awarded to the workman in accordance with the law of that country.
(1B) The Central Government may, by notification in the Official Gazette, specify, for the purposes of sub-section (/), such monthly wages in relation to an employee as it may consider necessary.;
(2A) The employee shall be reimbursed the actual medical expenditure incurred by him for treatment of injuries caused during the course of employment.”;
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
Employer is liable to reimburse the actual medical expenditure incurred by the employee for treatment of injuries caused to during the course of employment.
Employer is liable to pay injured employee with half monthly wages for a period of disablement, subject to a maximum of five years.
(2) The half-monthly payment referred to in clause (d) of sub-section (1) shall be payable on the sixteenth day-
(i) from the date of disablement where such disablement lasts for a period of twenty-eight days or more, or
(ii) after the expiry of a waiting period of three days from the date of disablement where such disablement lasts for a period of less than twenty-eight days; and thereafter half-monthly during the disablement or during a period of five years, whichever period is shorter:
Provided that- (a) there shall be deducted from any lump sum or half-monthly payments to which the workman is entitled the amount of any payment or allowance which the workman has received from the employer by way of compensation during the period of disablement prior to the receipt of such lump sum or of the first half-monthly payment, as the case may be; and (b) no half-monthly payment shall in any case exceed the amount, if any, by which half the amount of the monthly wages of the workman before the accident exceeds half the amount of such wages which he is earning after the accident.
Explanation .-Any payment or allowance which the workman has received from the employer towards his medical treatment shall not be deemed to be a payment or allowance received by him by way of compensation within the meaning of clause (a) of the proviso.
(3) On the ceasing of the disablement before the date on which any half-monthly payment falls due, there shall be payable in respect of that half-month a sum proportionate to the duration of the disablement in that half-month.
(4) If the injury of the workman results in his death, the employer shall, in addition to the compensation under sub-section (1), deposit with the Commissioner a sum of ][two thousand and five hundred rupees][for payment of the same to the eldest surviving dependant of the workman towards the expenditure of the funeral of such workman or where the workman did not have a dependant or was not living with his dependant at the time of his death to the person who actually incurred such expenditure.
THE EMPLOYEE’S COMPENSATION (AMENDMENT) ACT, 2009
in sub section (4)
(A) for the words “two thousand and five hundred rupees”, the words “not less than five thousand rupees” shall be substituted;
(B) the following proviso shall be inserted, namely:—
“Provided that the Central Government may, by notification in the Official Gazette, from time to time, enhance the amount specified in this sub-section.”.
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)]
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].
4A. Compensation to be paid when due and penalty for default. -
(1) Compensation under section 4 shall be paid as soon as it falls due.
(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim.
(3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner shall-
(a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent. per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due; and
(b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty per cent. of such amount by way of penalty:
Provided that an order for the payment of penalty shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed.
Explanation .-For the purposes of this sub-section, "scheduled bank" means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934).] [(3-A) The interest and the penalty payable under sub-section (3) shall be paid to the workman or his dependant, as the case may be.
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)].
Whether a Commissioner under the Employee's Compensation Act, can award interest at a rate less than the statutory rate prescribed under Section 4-A(3)(a) of the Employee's Compensation Act?
In the matter of United India Insurance Company Limited v. Narinder Kour, [MA No. 51/2018 with IA Nos. 1, 2 and 3 of 2018 decided on August 21, 2020], the Jammu and Kashmir High Court, while relying on the Jammu and Kashmir High Court's decisions in the matter of National Insurance Company Limited v. Dheeraj Singh, [MA No.140/2013], and Ghulam Mohd. v. Divisional Manager, SFC Doda, [MA No.576/2010], held that, under the Employee's Compensation Act, the Commissioner has no discretion to grant interest at a rate less than the minimum statutory interest prescribed under Section 4-A(3)(a) (Compensation to be paid when due and penalty for default) of the Employee's Compensation Act.
Section - 5. Method of calculating wages. -
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 rates) 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;
(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 ][* * *][the 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 clause (b)], the monthly wages shall be thirty times the total wages earned in respect of the last continuous period of service immediately preceding the accident from the employer who is liable to pay compensation, divided by the number of days comprising such period.
Explanation .-A period of service shall, for the purposes of [this][section], be deemed to be continuous which has not been interrupted by a period of absence from work exceeding fourteen days.
Workmen’s Compensation Act: Interest On Compensation Amount To Be Awarded From The Date Of Accident - Supreme Court observed.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.7470 OF 2009
North East Karnataka Road Transport Corporation ....Appellant(s)
Smt. Sujatha ...Respondent(s)
The employer had challenged the compensation awarded to the wife of a workman who had died in the course of employment.
In this case, the Commissioner for employee’s Compensation had awarded the interest at the rate of 12% per annum on the awarded sum but it was awarded from the expiry of 45 days from the date of order and that too, if the employer failed to deposit the awarded sum within 45 days.
The bench comprising Justice Abhay Manohar Sapre and Justice Indu Malhotra noticed that in Pratap Narain Singh Deo vs. Srinivas Sabata, a four-judge bench of the apex court had held that an employer becomes liable to pay compensation as soon as as the personal injury is caused to the workman in the accident which arose out of and in the course of employment and that it is the date of the accident and not the date of adjudication of the claim, which is material.
It also observed that the division bench of Supreme Court in National Insurance Company Ltd vs. Mubasir Ahmed and Oriental Insurance Company Ltd. vs. Mohmad Nasir & Anr., without noticing the above judgment, had held that payment of compensation fall due only after the commissioner’s order or with reference to the date on which the claim application is made.
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.
Whether ex-gratia amount, which is not paid in accordance with the statutory provisions, can be deducted from the compensation awarded under the Employee's Compensation Act?
In the matter of Nusrat Jahan v. The Managing Director, [Misc. First Appeal bearing No. 200839/2017 (WC), decided on June 25, 2020], the Karnataka High, Court after referring to certain precedents, including a recent judgment of the High Court of Himachal Pradesh in the matter of State of Himachal Pradesh v. Guddi Devi, [FAO 201 of 2009], held that, any payment made dehors of Sections 8 (Distribution of compensation), 28 (Registration of agreements) and 29 (Effect of failure to register agreement) of the Employee's Compensation Act cannot be deducted from the statutory compensation payable under Employee's Compensation Act.
The Karnataka High Court also observed that, in view of Sections 8, 28 and 29 of the Employee's Compensation Act, it was evident that no direct payment made to the deceased workman/ dependents, including any payment in the nature of ex-gratia compensation, can be deducted from the compensation awarded except in accordance with procedure stated in the above referred sections which, inter-alia, requires any such deposit to be made with the Commissioner directly.
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 EMPLOYEES ABROAD OF COMPANIES AND MOTOR VEHICLES. [Sec 15B]
(i) in the case of employees 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 employees, 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.
THE EMPLOYEE'S COMPENSATION (AMENDMENT) ACT, 2017
17A. Every employer shall immediately at the time of employment of an employee,inform the employee of his rights to compensation under this Act, in writing as well as through electronic means, in English or Hindi or in the official language of the area of employment, as may be understood by the employee.
PENALTIES. [Sec 18A.]
(a) fails to maintain a notice-book which he is required to maintain under sub-section (3) of section 10, or
(b) fails to send to the Commissioner a statement which he is required to send under sub-section (1) of section 10-A, or
(c) fails to send a report which he is required to send under section 10-B, or
(d) fails to make a return which he is required to make under [section 16, or] shall be punishable with fine] [which shall not be less than fifty thousand rupees but which may extend to one lakh rupees.]
(e) fails to inform the employee of his rights to compensation as required under section 17A
(2) No prosecution under this section shall be instituted except by or with the previous sanction of a Commissioner, and no Court shall take cognizance of any offence under this section, unless complaint thereof is made ] [within six months of the date on which the alleged commission of the offence came to the knowledge of the Commissioner].,
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.
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.
Section 25. Method of recording evidence. -
The Commissioner shall make a brief memorandum of the substance of the evidence of every witness as the examination of the witness proceeds, and such memorandum shall be written and signed by the Commissioner with his own hand and shall form part of the record: Provided that, if the Commissioner is prevented from making such memorandum, he shall record the reason of his inability to do so and shall cause such memorandum to be made in writing from his dictation and shall sign the same, and such memorandum shall form part of the record: Provided further that the evidence of any medical witness shall be taken down as nearly as may be word for word.
25 A. The Commissioner shall dispose of the matter relating to compensation under this Act within a period of three months from the date of reference and
intimate the decision in respect thereof within the said period to the employee.
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.
Section 30. Appeals. - (1) An appeal shall lie to the High Court from the following orders of a Commissioner, namely:-
(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 4-A;]
(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:
Provided that no appeal shall lie against any order unless a substantial question of law is involved in the appeal, and in the case of an order other than an order such as is referred to in clause (b), unless the amount in dispute in the appeal is not less than [ten thousand rupees or such higher amount as the Central Government may, by notification in the Official Gazette, specify]:
Provided further that no appeal shall lie in any case in which the parties have agreed to abide by the decision of the Commissioner, or in which the order of the Commissioner gives effect to an agreement come to by the parties:
[Provided further that no appeal by an employer under clause (a) shall lie unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against.] (2) The period of limitation for an appeal under this section shall be sixty days. (3) The provisions of section 5 of [the Limitation Act, 1963 (36 of 1963)], shall be applicable to appeals under this section.