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Employees Compensation Act 1923 (ECA)
Till January 2010 it was known as the Workmen·s Compensation Act.
Why ECA first
y Oldest and basic act ( ILO (1919) joined UN only in 1946). y Applicable to large work areas y Frequently amended
So what does ECA provide y Employer·s liability for compensation. y 3. his employer shall be liable to pay compensation in accordance with the provisions of this Chapter . (1) If personal injury is caused to an employee by accident arising out of and in the course of his employment.
Sec 3(1) linkages personal injury by accident context arising out of and in the course employment employer liable to pay employee compensation event result .
Sec 3(1) Exclusions employer not liable y for any injury not exceeding three days of disablement . y for any injury ( not leading to death or Permanent total disablement) where the worker is under the influence of drugs or alcohol . or there is willful disobedience and disregard of safety rules . removal of safety guards /devices« .
Some obvious questions y Who «. y When does it arise .. Employer y What is the compensation or how is it calculated. Employee y By whom«.
. express or implied.Employee . State amendments add to this list.1 y (1)Employee means a person employed in any such capacity as mentioned in Schedule 2 to be read along with the state amendments. The contract of employment may be oral or in writing. The list is vast and has 32 sub parts detailing different types of employments. y (2) Employees of the railways other than those permanently employed in the administrative and district offices. In case of death of workman the dependant can apply the provisions of this act on his behalf.
motor vehicle or company is registered in India. contd« . aircraft.Employee -2 y (3) Employees working on the crew (including Captain) of a ship/aircraft in any capacity on a motor vehicle. y (4) employees outside India in any capacity mentioned in Schedule 2 and the ship.
y (6) exercise and performance of the powers and duties of a local authority or government department will be deemed to be the trade or business of such authority.Employee .3 y (5) Excludes the Armed Forces because they are covered by their own Acts and the nature of their injuries is in combat and compensation is also determined according to the provisions of the Act. .
4 y IMP: Both central and State Government can add to the list of Sch 2 where it believes they are subject to hazardous tasks. Pose Q : Is domestic employee covered ? Why ? .Employee .
. cont. their managing agent. their legal representative in case of death of employer . . When the services of a workman are lent by one employer to another employer then the employer with whom the workman is working becomes the employer.Employer.1 y Employer includes body or persons whether incorporated or not .
. cont.Employer -2 y Employees engaged through contractor. Where employees are engaged through a contractor in the trade and business of the employer (principal). Of course the employee is not prevented from claiming from the contractor directly.. then the Act in terms of Section 12 places the liability of compensation on the principal employer and the principal employer in turn can be indemnified by the contractor.
Employer -3 y Also in case a liability for damages lies on a person (other than the employer) then the employer can be indemnified from such person after having paid (as per Section 12) the employee the compensation. . y Section 17 makes any contract null and void which removes or reduces the liability of the employee under the provisions of this Act.
Calculation of Compensation .
Temporary or permanent or death. y Monetization of physical loss (as determined from (1) and (2)). Loss of fingers as compared to an arm. . Loss of one hand as compared to both hands. Higher earnings will mean more loss. y Period of loss. Death as compared to loss of both eyes. That is linkage to earnings.What would be the factors that would go into this calculation? y Naturally the extent of the loss which in turn would be dependent on the injury. y The nature of the injury. Younger person loses more than a person about to retire. Age factor.
severe disfigurement of face.Loss of both hands. Part 1 Sch 1 . Part 2 Sch 1 loss of finger(s) . loss of both legs. loss of toes . hearing loss in both ears . both eyes .. Part of arm or part of leg etc. .Nature and Extent of injury-1 Death Permanent Total Disablement (PTD) Incapacitates the employee for all work which he was capable of performing at the time of the accident Further provided injuries mentioned in Part 1 of Schedule 1 are PTD and combination of injuries mentioned in Part 2 of Schedule 1 totaling 100 % is also PTD. Permanent Partial Disablement (PPD) Reduces his earning capacity in every employment which he was capable of doing at that time Injuries mentioned in Part 2 of Schedule 1 .
.Nature and Extent of injury-2 Temporary Total disablement (TTD) Temporary Partial Disablement (TPD) Occupational Diseases treated as injury by accident Incapacitates the employee from all work which he was capable of performing at the time of the accident but temporarily Reduces his earning capacity in any employment which he was engaged Example: fracture of both legs or hands. placed below. Schedule 3 list of Separate box item on industries and Occupational diseases occupational diseases . Infectious diseases contracted in an occupation. Total yet temporary. Diseases caused by chemicals. Example: Say fracture of one hand or leg.
20. Additional points Relevant Factor is based on age (completed years) of the employee at the time of the accident.000 in any case.40.1 Type of Injury Compensation calculation Limits UPPER: Limit on maximum wages that can be considered to be decided by Central Government. UPPER: Limit on maximum wages that can be considered to be decided by Central Government. PTD gets higher compensation than death as the employee has to sustain himself too. Death 50 % of wages * Relevant Factor + a sum of Rs 5000/. LOWER: Compensation cannot be lesser than Rs 1.Monetization. Permanent 60% of wages * Total Relevant Factor Disablemen t . It is provide age wise in Schedule 4 of the act. LOWER: Compensation cannot be lesser than Rs 1.for funeral expenses.000 in any case.
Temporary 25 % wages payable fortnightly till recovery . It must be noted that full wages is based on some value addition. It would be a miscarriage of justice if there is full wages without any work done. Also should not be seen as an incentive.e Disablement 100%) Limits as in In other words we first PTD will apply. calculate compensation as if it is 100 % disablement and then depending on the percentage of injury reduce it proportionately.2 Permanent % of injury * (compensation Partial as if it is PTD i. Upper limit of wages as prescribed by CG from time to time would apply.Monetization.
Employee To prevent dual prohibited from compensation. Reimbursement of actual expenditure by the employer.Monetization.. approaching civil court once he is claiming/claimed from ECA. . Medical Expenditure Forum for claim Also if he chooses to approach civil court then he cannot claim from ECA.3 Occupational Diseases Depending on extent of injury viz death/PTD etc.
such monthly wages in relation to an employee as it may consider necessary. y Upper limit of Wages y (1B) The Central Government may. .Note on Wages : y ´wages· includes any privilege or benefit which is capable of being estimated in money. for the purposes of sub-section (1). specify. by notification in the Official Gazette. other than a travelling allowance or the value of any travelling concession or a contribution paid by the employer an employee towards any pension or provident fund or a sum paid to an employee to cover any special expenses entailed on him by the nature of his employment.
Occupational Diseases .
Occupational Diseases-1 y Section 4 places liability on the employer to compensate the employee in case of injury caused by the employee·s exposure to occupational hazards. Such occupational diseases are mentioned in Schedule 3 and it is divided into three parts: .
Occupational Diseases-2 Part A no minimum time period of employee engagement in the industry specified example poisoning by nitrous fumes . diseases caused by lead and toxic compounds Part B y employee must have worked with the employer for a continuous period of not less than 6 months to make the employer liable y example diseases caused by phosphorous . benzene or their toxic compounds respectively . mercury.
y external allergic alveetis caused by inhalation of organic dusts. acute pulmonary oedema of higher altitude.Occupational Diseases-3 Part C y where the employee has worked for several employers for such periods specified by the Central Government compensation will be in proportion as determined. . y in case the disease is contracted in a lesser period and yet it is proved that it has arisen from such employment then it is a disease arising out of employment .
Occupational Diseases-4 y Note: If disease is caused post employment but employee has served periods specified in Part B and Part C then too it is a disease arising out of employment. .
y Accident ² y Arising out of and in the course of employment . what is included and what is not.Some intricate issues y Personal Injury ² meaning and scope.
Injury may include a strain. Includes sunstroke. y There must be a causal link between the employment and the injury. hysterical paralysis and neurasthenia. y In Indian News Chronicle Ltd vs Luis Lazarus an electrician had to frequently go to a heating room and thereafter a cooling room fell ill and contracted pneumonia and died. traumatic neuorisis. .y Personal injury y Not defined but not confined to physical injury but it may include a mental strain or mental imbalance. nervous collapse.
tripping.e an unlooked for mishap or untoward event. .y Accident y Means some unexpected event happening without design i. y It includes not only such occurrences such as collision. exposure to a draught causing chill. shock causing neurasthenia. falls of roofs but also less obvious ones causing injury e.g strain which causes rupture .
Out of and in the course of employment y Out of employment «. Numerous case laws : each varies based on facts of the case.due to y In course « during y To and fro to employment considered as ´notional extension of employmentµ and so far mostly compensation has been given by courts because it is perceived as socially beneficial. .
y Appeal lies with High Court . 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 to be a Commissioner for employees· Compensation for such area as may be specified in the notification.Authority under this Act y Commissioner : State government by notification in the Official Gazette.
1973 (2 of 1974). . y The Commissioner shall have all the powers of a Civil Court under the Code of Civil Procedure.Commissioner y Every Commissioner shall be deemed to be a public servant within the meaning of the Indian Penal Code (45 of 1860). 1908 (5 of 1908) for the purpose of taking evidence on oath (which such Commissioner is hereby empowered to impose) and of enforcing the attendance of witnesses and compelling the production of documents and material objects and the Commissioner shall be deemed to be a Civil Court for all the purposes of section 195 and of Chapter XXVI of the Code of Criminal Procedure.
the question shall. . y (2) No Civil Court shall have jurisdiction to settle. decide or deal with any question which is by or under this Act required to be settled. be settled by a Commissioner. decided or dealt with by a Commissioner or to enforce any liability incurred under this Act. in default of agreement.Commissioner y If any question arises in any proceedings under this Act as to the liability of any person to pay compensation (including any question as to whether a person injured is or is not an employee) or as to the amount or duration of compensation (including any question as to the nature or extent of disablement).