The workmen compensation act,
1923
Objective
The workmen compensation act,
1923 aims to provide workman and
/or their depends some relief in case
of accidents arising out of and in the
course of employment and causing
either death or disablement of the
workmen.
Scope and Coverage
The act extends to the whole of India. The
workmen compensation (amendment) act 2000
has brought all the workers within its ambit
irrespective of their nature employment i.e.
whether employed on casual basis or otherwise
than for the purposes of the employers trade or
business. For the first time, casual labourers will
be provided compensation for death or disability.
Establishments which are covered by Employee
state insurance act, are outside the purview of this
act.
The coverage of this act is also to cooks employed
in hotels and restaurants.
Employees entitled
Every employees including those employed through
a contractor and also casual employees, who suffers
an injury in any accident arising out of and in the
course of employment shall be entitle for
compensation under this act. A person employed in a
factory, which is yet to commence production,
would not be deprived of the benefits of the
provision of the act. The workmen employed in a
premises where manufacturing process is intended to
be carried on is not necessarily required to be
actually connected to the manufacturing process.
Any person engaged in such premises who is
contributing for the intended manufacturing process
would be deemed to be workman for the purpose of
the act.
Whether contractor is a workmen
Where a person entered into a
construction contract and agreed to
work himself and also to employ his
own labour, while construction
material was to be supplied by the
owner, and the contractor died while
working himself, it was held that the
dependents of the deceased were
entitled to compensation.
ADMINISTRATIVE AUTHORITY
The State Governments administer
the provisions of this Act through the
commissioners appointed for
specified areas. The State
Governments also make rules for
ensuring that the provisions of the
Act are complied with.
JURISDICTION OF COMMISSIONER
Any matter under this Act, to be done by or before a
Commissioner shall be done by or before the Commissioner for
the area in which
a) the accident resulting in the injury, took place or
b) the workman, or his dependent claiming the
compensation ordinarily resides, or
c) the employer has his registered office.
d) Where a commissioner is satisfied that any proceedings
can be more conveniently disposed of by any other
Commissioner, he may transfer the matter to such other
Commissioner.
ACCIEDENT COMPENSATION- When payable
The employer of any establishment covered under
this Act, is required to compensate an employees:-
Who has suffered on accident arising out of
and in the course of his employment, resulting into
(i) death (ii) permanent total disablement (iii)
permanent partial disablement or (iv) temporary
disablement.
Who has contracted an occupational disease
accident arising out of and in the course of
Employment.
Accident arising out of and course of
employment.
An accident arising out of employment implies
a casual connection between the injury and the
accident and the work done in the course of
employment.
What are the condition for receiving compensation
for personal injury caused the accident?
The three tests for determining whether an
accident arise out of employment are:-
1. At the time of injury workman must have
been engaged in the business of the employer and
must not be doing something for his personal
benefits.
2. That accident occurred at the place where
he was performing his duties and
3. Injury must have resulted from some risk
incidental to the duties of the service, or inherent
in the nature or condition of employment.
When is an employer not liable to pay compensation?
But, the employer shall not be liable to pay compensation in
the
Following cases:-
If the injury did not result in total or partial disablement
of a workman for a period exceeding three days,
If the workman was at the time of the accident under
the influence of drink of drug, or
If the workman willfully disobeyed an order expressly
given a rule expressly framed for the purpose of securing
safety of workman, or
If the workman willfully removed or disregarded any
safety guard or other device which to his knowledge was
provided for the purpose of security his safety.
Amount of Compensation- Section 4
The amount of compensation payable to a
workman depends on
The nature of injury caused by accident,
The monthly wages of the workman
concerned and
The relevant factor for the working out lump
sum equivalent of compensation amount as
specified in Schedule IV
There is no distinction between an adult and a
minor worker with respect to the amount of
compensation.
COMPENSATION FOR DEATH
In case of death resulting from injury, the amount of
compensation shall be equal 50% of the monthly wages of
the deceased workman multiplied by the relevant factor.
Or an amount of ` 80,000/- whichever is more.
Example:
A workman is employed in a factory on a monthly
wage of 3000. While working he met an accident and dies
on act 2000. His date of birth is July 18, 1970 the amount of
compensation payable to his dependent would be
50/100* monthly wages* relevant factor of age 30
or Rs.80,000 whichever is higher
50/100*3000*207.98= 3,11,970
Since Rs 311970 is more than Rs.80000 the compensation
payable to him shall be `.3,11,970.w
Compensation for permanent total disablement.
In case of permanent total disablement resulting
from the injury, the amount of compensation shall
be 60% of the monthly wages of the injured
workman multiplied by the relevant factor of
Rs.90,000/- thousand whichever is more.
For the above example is more than `.90,000/- the
compensation would be
60/100*3000*207.98=Rs.3,74,365/-
Since Rs.3,74364/- is more than Rs.90,000
the amount of compensation payable should be
Rs.374364.
COMPENSATION OF PERMANENT PARTIAL DISABLEMENT
Where permanent partial disablement occurs, the
amount of compensation payable shall be as
follows:
In case of an injury specified in part II of the
schedule 1, the amount of the compensation shall be
such percentage of the compensation which would
have been payable is the percentage of loss of
earning capacity caused by that injury.
In case of an injury not specified in Schedule 1,
such percentage of the compensation is payable
which is proportionate to the loss of earning
capacity (as assessed a qualified medical
practitioner) permanently caused by the injury
Example
A worker whole monthly wages is Rs.3000/- loses one
eye As A RESULT OF Injury caused to him on Nov 15,
1995. On Oct 1, 1995. He as completed 20 years of age the
amount of compensation payable to him would be
40% of 60*3000*224= 1,61,280
100
COMPENSATION FOR TEMPORARY
DISABLEMENT (Total or partial)
If the temporary disablement, whether total
or partial results from the injury, the amount of
compensation shall be a half monthly payment of
the sum equivalent to 25% of the monthly wages
of the workman to be paid in accordance with the
provisions.
The half monthly payment shall be payable
on the sixteenth day from the date of disablement.
In cases where such disablement lasts for a
period of 28 days or more compensation is
payable from the date of disablement.
In other cases after the expiry of a waiting
period of three days from the date of disablement.
Payment of Compensation to Contract Labour
The principal employer is liable to
pay compensation to contract labour
in the same manner as his department
labour. He is entitled to be
indeminified by the contractor the
principal employer shall not however
be liable to pay any interest and
penalty liable under the Act.
