EMPLOYEE COMPENSATION ACT 1923 ALSO CALLED AS WORKMEN COMPENSATION ACT 1923

                                    

ALSO CALLED AS WORKMEN COMPENSATION ACT 1923 

INTRODUCTION

This act provides compensation to workers/employees who suffer or encounter injury or death due to accident while working This act is not applicable in cases where those are covered by ESI (Employee state insurance act) 1948. This act previously called WORKMEN COMPENSATION ACT 1923 was changed to EMPLOYEE COMPENSATION ACT 1923 from the year 2010. This is social security act provided by the government and implemented by all state governments which provides social security to all workers who work in different conditions. There are a total of 36 sections in this act

SCOPE OF THE ACT

The immediate relief is ensured by the employer in the form of compensation to the injured employee/ worker encountered during employment.  

·    The Act is recognized all over India and applies to all workmen and casual workers in ships, transport establishments, railways, factories, plantations, mines, circuses, construction work, and any other potentially dangerous occupations made mentioned in Schedule II of this Act. 

 

·    The act applies to all the people covered under section 2(d) of the act and     schedule 2.

 

·       This act does not apply to armed forces, employees' work is casual in nature, etc.  

 OBJECTIVE OF THE EMPLOYMENT

The main objective of this act is to provide compensation for workmen in the event of an accident. This act mentions that it is the duty and responsibility of the employer to ensure immediate relief to any worker/employee who gets injured suffered in the course of employment in the same way as the employer has reserved the right of making profits.  

 

EMPLOYEE COMPENSATION

An employer is responsible for paying compensation to the employee under the following circumstances:

  

1. INJURY OR ACCIDENT: An employer is responsible for paying compensation to the workman if personal injury is caused by an accident arising out during his employment which means if personal injury is caused due to an accident arising out of and in the course of his employment, the employer shall be liable to pay compensation under the provisions of this Chapter

 

The employer is not liable to pay under certain circumstances like

 

· An Injury or accident where the employee/worker does not disable for more than three days.

· An injury or accident resulted from the influence of drugs/alcohol

· An injury or accident resulted due to willful disobedience like not following required safety procedures or rules

·  The workman will fully remove or disregard safety equipment, which has been provided for the safety of the workers

  

2.    OCCUPATIONAL DISEASES: Due to inherent hazards in a particular occupation, workers who undertake those particular occupations have the risk of getting exposed and contracting certain diseases. An occupational disease is any chronic disease that occurs as a result of work or occupational activity. It is an aspect of occupational safety and health. If any 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.

 

CALCULATION OF COMPENSATION

The minimum wage taken for calculating the compensation is Rupees 15,000, for death, it is taken as 50% of monthly wage multiplied by a relevant factor and for permanent total disability, it is taken as 60% of monthly wage multiplied by relevant factor.

 

For injuries not specified in schedule:

 

1. Employer is liable to reimburse the actual medical expenditure incurred by the employee for treatment of injuries caused during 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.

 

 SCHEDULES IN EMPLOYEE COMPENSATION ACT

 

·   SCHEDULE: 1 – List of INJURIES Deemed to result in PERMANENT TOTAL or PARTIAL DISABLEMENT

 

·  SCHEDULE: 2 – LIST OF PERSONS WHO, SUBJECT TO THE PROVISIONS OF SECTION 2(1) (DD), ARE INCLUDED IN THE DEFINITION OF EMPLOYEES

 

·  SCHEDULE: 3- LIST OF OCCUPATIONAL DISEASES, they are divided into three types

 

PART “A” DISEASES: The diseases covered under PART “A” does not require a specific time of service for coverage. These are

 

1)  Occupations where there is a high Contamination risk with infectious and parasitic diseases.

2)  Diseases caused by work with compressed air

3)  Diseases with lead or its compounds.

4)  Nitrous fumes poisoning.

5)  Organophosphorous compound.

 

PART “B” DISEASES: The diseases covered under PART “B” require a minimum time of 6 months of service for coverage.

 

1) Mercury, Phosphorous, Benzene, Chromium, Arsenic, Beryllium, Cadmium, Fluorine, and their compounds. Asphyxiants like carbon monoxide and hydrogen sulfide etc.,

2)  Occupational cancer, Occupational asthma, Occupational cataract

3) kin diseases

4) Cancer caused by asbestos

5) Snow blindness and diseases due to extreme cold etc.

  

PART “C” DISEASES: The diseases covered under PART “C” require a minimum period as specified by the central government.

 

1) Pneumoconiosis caused due to mineral dust (silicosis, asbestosis etc.)

2) Bagossosis

3) Byssinosis

4) Allergic diseases due to inhalation of organic dust etc.,

  

· SCHEDULE:4- FACTORS FOR WORKING OUT LUMP SUM EQUIVALENT OF COMPENSATION AMOUNT IN CASE OF PERMANENT DISABLEMENT AND DEATH

 

DIFFERENCE BETWEEN EMPLOYEE COMPENSATION AND EMPLOYEE STATE INSURANCE

Employee State Insurance ACT	Employee compensation Act
The factory should be non-seasonal	Any organization that employes workers in jobs other than clerical jobs, like drivers, contract workmen, labour on menial jobs
The factory should employ more than 20 persons	No limit on workers, any number of workers can be accommodated
Monthly wages should not be more than 21,00 to be part of ESI	The minimum monthly wage considered for benefits calculation is 15,000
This applies only to workers working in India only	This applies to Indian workers employed in foreign countries by Indian employers only
It is not applicable in some states	It is applicable all over India
It is a multidimensional social security scheme were provides medical care as well as financial security to all the workers falling under the ESI	Workmen compensation is only accident and injury, does not cover health aspect
The employer and employee share the burden of policy	The employer 100% solely bears the cost of the policy

 

Disclaimer:  The information represented above is only guidance for students for getting some information relevant to the subject. The information represented above does not constitute professional advice and cannot be quoted or used for any application purpose (or) statutory requirements (or) dispute resolution

 Article by PJ Mohan

  Sr.Faculty, NIFS