UNIT-I

Course Name: B.B.A.

Semester Number: V
Subject Code: BBA-N-505
Subject Name: Industrial Law
Faculty Name: Himanshu Upadhyay
Designation: Assistant Professor

Unit-I-BBA-505-Industrial Law
 Amount of Compensation Sec.4

(1) Subject to the provisions of this Act, the amount of compensation shall be as follows,
namely:
(a) where death results from the injury an amount equal to [fifty per cent.] of
the monthly wages of the deceased
[employee] multiplied by the relevant
factor;
or
an amount of [one lakh and twenty
thousand rupees], whichever is more;
(b) where permanent total disablement results an amount equal to [sixty per cent.] of
from the injury the monthly wages of the injured
[employee] multiplied by the relevant
factor;
or
an amount of [one lakh and forty
thousand rupees], whichever is more:
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 (b);
Explanation I: For the purposes of clause (a) and clause (b), “relevant factor”, in relation
to an [employee] means the factor specified in the second column of Schedule IV against
the entry in the first column of that Schedule specifying the number of years which are
the same as the completed years of the age of the [employee] on his last birthday
immediately preceding the date on which the compensation fell due.
(c) where permanent partial disablement (i) in the case of an injury specified in Part
results from the injury. 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.

Unit-I-BBA-505-Industrial Law
Explanation I: Where more injuries than one is caused by the same accident, the amount
of compensation payable under this head shall be aggregated but not so in any case as to
exceed the amount which would have been payable if permanent total disablement had
resulted from the injuries.
Explanation II: In assessing the loss of earning capacity for the purposes of sub-clause
(ii), the qualified medical practitioner shall have due regard to the percentages of loss of
earning capacity in relation to different injuries specified in Schedule I.
(d) where temporary disablement, whether a half-monthly payment of the sum
total or partial results from the injury equivalent to twenty-five per cent. of
monthly wages of the [employee], to be
paid in accordance with the provisions of
sub-section (2).
(1A) Notwithstanding anything contained in sub-section (1), while fixing the amount of
compensation payable to a [employee] in respect of an accident occurred outside India,
the Commissioner shall take into account the amount of compensation, if any, awarded to
such [employee] 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
[employee] 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 (I), such monthly wages in relation to an employee as it may
consider necessary;
(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 deducted from any lump sum or half-monthly payments to which
the [employee] is entitled the amount of any payment or allowance which the
[employee] 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 [employee] before the
accident exceeds half the amount of such wages which he is earning after the
accident.

Unit-I-BBA-505-Industrial Law
Explanation: Any payment or allowance which the [employee] 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.
(2A) The employee shall be reimbursed the actual medical expenditure incurred by him
for treatment of injuries caused during the course of employment.
(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 [employee] results 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
dependent of the [employee] towards the expenditure of the funeral of such [employee]
or where the [employee] did not have a dependent or was not living with his dependent at
the time of his death 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 specified in this sub-section.

Compensation to be Paid when due and Penalty for Default (Sec.4A)

(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 [employee], as the case may be, without prejudice to the right of the
[employee] 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.

Unit-I-BBA-505-Industrial Law
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.
(3A) The interest and the penalty payable under sub-section (3) shall be paid to the
[employee] or his dependent, as the case may be.

Distribution of Compensation (Sec.8)

(1) No payment of compensation in respect of a [employee] whose injury has resulted in

death, and no payment of a lump sum as compensation to a woman or a person under a
legal disability, shall be made otherwise than by deposit with the Commissioner, and no
such payment made directly by an employer shall be deemed to be a payment of
compensation:
Provided that, in the case of a deceased [employee], an employer may make to any
dependent advances on account of compensation [of an amount equal to three months’
wages of such [employee] and so much of such amount] as does not exceed the
compensation payable to that dependent shall be deducted by the Commissioner from
such compensation and repaid to the employer.
(2) Any other sum amounting to not less than ten rupees which is payable as
compensation may be deposited with the Commissioner on behalf of the person entitled
thereto.
(3) The receipt of the Commissioner shall be a sufficient discharge in respect of any
compensation deposited with him.
(4) On the deposit of any money under sub-section (1) [as compensation in respect of a
deceased [employee]] the Commissioner *** shall, if he thinks necessary, cause notice to
be published or to be; served on each dependent in such manner as he thinks fit, calling
upon the dependents to appear before him on such date as he may fix for determining the
distribution of the compensation. If the Commissioner is satisfied after any inquiry which
he may deem necessary, that no dependent exists, he shall repay the balance of the money
to the employer by whom it was paid. The Commissioner shall, on application by the
employer, furnish a statement showing in detail all disbursements made.
(5) Compensation deposited in respect of a deceased [employee] shall, subject to any
deduction made under sub-section (4), be apportioned among the dependents of the
deceased [employee] or any of them in such proportion as the Commissioner thinks fit, or
may, in the discretion of the Commissioner, be allotted to any one dependent.
(6) Where any compensation deposited with the Commissioner is payable to any person,
the Commissioner shall, if the person to whom the compensation is payable is not a
woman or a person under a legal disability, and may, in other cases, pay the money to the
person entitled thereto.
(7) Where any lump sum deposited with the Commissioner is payable to a woman or a
person under a legal disability, such sum may be invested, applied or otherwise dealt with

Unit-I-BBA-505-Industrial Law
for the benefit of the woman, or of such person during his disability, in such manner as
the Commissioner may direct; and where a half-monthly payment is payable to any
person under a legal disability, the Commissioner may, of his own motion or on an
application made to him in this behalf, order that the payment be made during the
disability to any dependent of the employee or to any other person, whom the
Commissioner thinks best fitted to provide for the welfare of the [employee].
(8) Where, on application made to him in this behalf or otherwise, the Commissioner is
satisfied that, on account of neglect of children on the part of parent or on account of the
variation of the circumstances of any dependent or for any other sufficient cause, an order
of the Commissioner as to the distribution of any sum paid as compensation or as to the
manner in which any sum payable to any such dependent is to be invested, applied or
otherwise dealt with, ought to be varied, the Commissioner may make such orders for the
variation of the former order as he thinks just in the circumstances of the case:
Provided that no such order prejudicial to any person shall be made unless such person
has been given an opportunity of showing cause why the order should not be made, or
shall be made in any case in which it would involve the repayment by a dependent of any
sum already paid to him.
(9) Where the Commissioner varies any order under sub-section (8) by reason of the fact
that payment of compensation to any person has been obtained by fraud, impersonation
or other improper means, any amount so paid to or on behalf of such person may be
recovered in the manner hereinafter provided in section 31.

Unit-I-BBA-505-Industrial Law