employee compensation act, 1923

7/27/2019 Employee Compensation Act, 1923

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EMPLOYEESCOMPENSATION ACT

1923 (ECA)

Till January 2010 it was known as the

Workmens Compensation Act.


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Introduction to the Act

The Workmens Compensation Act, 1923 is one of the

earliest labor welfare and social security legislation

enacted in India.

It recognizes the fact that if a workman is a victim of

accident or an occupational disease in course of his

employment, he needs to be compensated.

The Act does not apply to those workers who are

insured under the Employees State Insurance Act

1948.


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An insured person or his dependents shall not be

entitled to receive or recover whether from the employer

of the insured person or from any other person any

compensation or damages under the Workmens

Compensation act 1923 or any other law for the timebeing in force or otherwise in respect of an employment

injury sustained by the insured person as an employee

under this Act.


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Objectives of the Act

Provide workmen and/or their dependents some relief or

to consider compensation payable by an employer to his

workmen in case of accidents arising out of and in the

course of employment and causing either death or

disablement of workmen as a measure of relief and socialsecurity.

Provide for payment by certain classes of employers to

their workmen compensation for injury by accident.


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To enable a workmen to get compensation irrespective

of his negligence.

It lays down the various amounts payable in case of anaccident, depending upon the type and extent of injury.

The employer now knows the amount of compensation

he has to pay and is saved of many uncertainties to

which he was subject before the Act came into force.


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Features of the Act

1) Act provides for cheaper and quicker mode of disposalof disputes through special proceedings than possibleunder Civil Laws.

2) Act provides compensation to workmen for injurycaused by accident and occupational disease arising outof and in the course of employment.

3) The Act is applicable to apprentices also.

4) Procedure for settlement of claim is throughCommissioner


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Workmens Compensation

Employers Liability for Compensation

1) For personal injury caused to him by accident, and

2) For any occupational disease contracted by him.

1) Personal Injury: Personal injury includes:

i) Must have been caused during the course of his

employment;

ii) Must have been caused by accident arising out of hisemployment.


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So the injury should be caused by accident by some

mishap, unexpected or unforeseen.

The personal injury caused to the worker must have

resulted in total or partial disablement of the workman

for a period exceeding 3 days or it must have resulted in

the death of the worker.

The injury should not have been caused by accident

which is directly attributable to:

i) The workman having been under the influence of drink or

drugs at the time of the accident;

ii) Willful disregard of instruction relating to safety

precautions given by the employer; and/or

iii) The willful disregard of the usage of the safety device or

safety guard provided for the purpose of securing safety

of the workman by the employer


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2) Occupational Disease

Act also recognizes that the workman employed in

certain types of industries of occupation risk exposure to

certain occupational disease peculiar to that

employment.

i) An injury by accident within the meaning of the Act and

compensation is payable to the workman who

contracts such disease;

ii) The types of employment which exposes the workman

to occupational disease as well as the list of

occupational diseases are contained in Schedule III of

the Act.


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Amount of Compensation

The amount of compensation payable to a workman

depends on:

1) The nature of the injury caused by accident.

2) The monthly wages of the workman concerned, and3) The relevant factor for working out lump-sum equivalent

of compensation amount.

There is no distinction between an adult and a minorworker with respect to the amount of compensation


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Compensation for

1) Death;

2) Permanent total disablement;

3) Permanent partial disablement; and

4) Temporary disablement total or partial.


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(a) Compensation for Death: where death results an

amount equal to fifty per cent of the monthly wages

of the deceased workman multiplied by the relevant

factor; or an amount of fifty thousand rupees,

whichever is more.

(b) Compensation for Permanent Total Disablement

:Where permanent total disablement results form an

injury, the amount of compensation payable shall beequal to 60 percent of the monthly wages of the injured

workman multiplied by the relevant factor, or Rs. 90,000,

whichever is more


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( C ) Compensation for Permanent Partial Disablement:

(I ) If the loss of earning capacity caused by an injury

specified in Schedule is 30 percent, the amount of

compensation shall be 30 percent of compensation

payable in case of permanent total disablement.

ii) In the case of an injury not specified in Schedule 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 qualifiedmedical practitioner) permanently caused by the injury.


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( d)Compensation for Temporary Disablement: A half

monthly payment of the sum whether total or partial

results equivalent to 25% of monthly wages of the from

the injury workman to be paid in the manner prescribed.


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General principles of the Act

There must be a casual connection between the injury

and the accident and the work done in the course of

employment;

The onus is upon the applicant to show that it was the

work and the resulting strain which contributed to or

aggravated the injury;

It is not necessary that the workman must be actually

working at the time of his death or that death must occur

while he was working or had just ceased to work; and


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Compensation payable even if

workman was careless

Compensation is payable even if it is found that the

employee did not take proper precautions.

An employee is not entitled to get compensation only if

(a) he was drunk or had taken drugs (b) he willfully disobeyed orders in respect of safety

(c) he willfully removed safety guards of machines.

However, compensation cannot be denied on the ground

that workman was negligent or careless


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Payment of compensation only

through Commissioner

A Commissioner for Workmens Compensation is

appointed by Government.

The compensation must be paid only through the

Commissioner in case of death or total disablement.

Any lump sum payment to workman under the Act must

be made only through Commissioner.

Direct payment to workman or his dependents is not

recognized at all as compensation.

employee compensation act, 1923

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