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1. A BRIEF OVERVIEW
The Workmen’s Compensation Act is the first piece of legislation towards social security.

Under the Act, It is obligatory on the employers to pay compensation to their employees for injury
caused by accident, arising out of and in the course of their employment, resulting in death or in
total/partial disablement.

Compensation is also payable for some occupational diseases contracted by employees during the
course of their employment. [Schedule III]

The workmen compensation act has been recently amended in 2009. The LATEST AMENDMENT
EFFECTIVE FROM January 2010 are:
 Change of name of the Act. WORKMEN COMPENSATION ACT, 1923 now changed as
EMPLOYEES COMPENSATION ACT, 1923

 The words workman or workmen in the Act have been substituted by the words employee
or employees wherever they occur.

 Clerks are now covered for compensation. (Schedule – II)

 (in case of death) minimum compensation has been enhanced from Rs.80,000 to
Rs.1,20,000

 (in case of permanent disability) minimum compensation has been enhanced from
Rs.90,000 to Rs.1,40,000

 funeral expenses enhanced from Rs.2,500 to Rs.5,000.

 A new section has been added – Section 25A – which fixes 3 months time limit for disposal
of claims from the date of reference.

APPLICABILITY
1. The Act extends to the whole of India.

2. The act applies to certain categories of railway servants and employees employed in any
capacity as specified in Schedule II of the Act. Such as - Factories, Mines, Plantations,
Construction Work and certain other hazardous occupations, etc.

3. Every employee employed through a contractor for the purposes of employer’s trade and
business and who suffers from an injury by accident rising out of and in the course of his
employment, shall be entitled for compensation under this Act.

4. The Act is applicable to apprentices also.

5. This Act is applicable even when only one person is employed and it is not a “factory” under
Factories Act [1]

1
Sunil Industries v. Ram Chander 2000 AIRSCW 4109 = 2001 LLR 64 = 2000(7)SCALE 415
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6. The Central Government or the State Governments are empowered to extend the scope of
the Act to any class of persons whose occupations are considered hazardous. [section 2(3)]

7. Similarly, the State Governments or the Central Government are also empowered to add any
other disease to the list of occupational disease mentioned in Schedule III. [section 3(3)]

8. The Act however does not apply to –

(i) Persons whose employment is of a casual nature and who are employed for
purposes other than the employers’ trade or business;
(ii) Persons serving in Armed Forces and
(iii) Employees covered by the ESI Act.

IMPORTANT DEFINATIONS
1) Commissioner [Section 2 (1) (b)]: Commissioner means a Commissioner for Employees
Compensation appointed under Section 20.

2) Employer: [Section 2 (1) (e)]:

 The word employer means any person who gives employment to any person.
 It includes not only natural persons, body of persons but legal artificial person also.
 It also includes the managing agent of the employer or A legal representative of a
deceased employer.
 When a master lends or lets or hire the services of his servant or apprentice to
another person, the latter alone would be the employer so long as the employee is
working for him.

2. COMPENSATION AND DISABLEMENT

Under the Act, there are four types of eventualities, which can be compensated, namely:

1. Death
2. Permanent Total Disablement
3. Permanent partial disablement
4. Temporary disablement - This may be total or partial disablement.

Compensation has been defined under Sec. 2 (1) (c): means compensation as provided for by this
Act [under section 4 (1)]

Disablement: Disablement means loss of capacity to work or to move. Disablement may be partial,
or total.
 Partial Disablement has been defined under Section 2 (1) (g): means any disablement which
reduces the earning capacity of an employee as a result of an accident. Partial disablement
may be temporary or permanent.

o Temporary partial disablement means any disablement which reduces the earning
capacity of an employee in the employment in which he was engaged at the time of
accident which resulted in such disablement.

o Permanent partial disablement is one which reduces the earning capacity of an

employee in every employment which he was capable of undertaking at the time of
injury.
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 Total Disablement has been defined under Section 2 (1) (L) of the Act: It means complete
loss of capacity to work. Where an employee as a result of an accident, becomes unfit for a
particular job but is fit for another class of job which is offered to him by the employer, the
employee is entitled to claim compensation for partial disablement only and not total
disablement. Total disablement is established only when the earning capacity becomes
totally inexistent and no medium of it remains.

Example: A carpenter lost his left hand, it was held by the court that he suffered from total
disablement – as he would not get any job of carpentry – as now he cannot do carpentry. [2]

EMPLOYER’S LIABILITY TO PAY COMPENSATION

As per Section 3 (1) of the Act, the employer is liable to pay compensation if the employee is injured
by accident -
 that arises out of and;
 in the course of his employment and;
 Such an injury results in death or temporary or permanent disablement of the employee.

Personal Injury:
 The expression ‘personal injury’ has not been defined under the Act. Personal injury is a
bodily injury or a physical injury, it also include abnormal mental conditions.
 It includes injuries such as disease, sunstroke, nervous collapse etc.
 There must be a causal link between the employment and the injury.
 In Indian News Chronicle Ltd. V. Luis Lazarus, [3] an electrician had to frequently go to a
heating room and from there to a cooling room. While on duty the workman fell ill and
subsequently died of pneumonia. The court held that the word ‘injury’ in Section 3 of the Act
may include a strain which causes a chill. The death of the workman was thus due to
personal injury caused by an accident arising out of and in the course of the employment.
Hence compensated.

Accident:
 Means an unexpected event or a mishap.
 In Padam Debi v. Raghunath Ray [4] – there is an accident of a bus, which dashed against a
tree as a result of its being driven rashly and negligently - which resulted in injuries to the
driver leading to his death. The court held that his death was caused by an accident arising
out of and in the course of his employment and as such the employer would be liable to pay
compensation. The fact that the driver was negligent or that he committed a breach of the
provisions of the Motor Vehicles Act, would not affect the right to claim compensation.

Out of and In The Course of Employment:

 Out of employment i.e.…..while engaged in work
 In the course i.e.….. during work hours

According to Section 3 (2) the employer’s liability for occupational disease arises under three
circumstances:
 If an employee, employed in any employment specified in Part A of Schedule III contracts
any occupational disease peculiar to that employment such as diseases caused by work in

2
Pratap Narain Singh Deo Vs sriniwas Sabata (1976)
3
AIR 1951 Punj. 102
4
AIR 1960 Orissa 207
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compressed air, poisoning by nitrous fumes etc. [No specific period of employment is
necessary for a claim of compensation] or
 If an employee, who has been employed [for a continuous period of not less than six
months] in any employment specified in Part B of Schedule III contracts any occupational
disease peculiar to that employment such as - diseases caused by phosphorus or its toxic
compounds, etc. or
 If an employee, whilst in the service of one or more employers, in respect of any
employment specified in Part C of Schedule III contracts any occupational disease peculiar to
that employment such as –diseases caused by hard metals etc. [For diseases in Part C the
period of employment would be such as is specified by the Central Government for each of
such employment whether in the service of one or more employers]

-the contracting of the disease shall be deemed to be an injury by accident and the accident shall be
deemed to have arisen out of, and in the course of, the employment.

As per Section 3 (2A) if an employee contracts any occupational disease peculiar to that
employment under Part C of the schedule III - the contracting whereof is deemed to be an injury by
accident - and if such employment was under more than one employer then all the employers shall
be liable for the payment of compensation in such proportion as the commissioner may deem just.

WHEN EMPLOYER’S LIABILITY DOES NOT ARISE

As per Section 3 (1) (a) any injury which does not result in the total or partial disablement of the
employee for a period exceeding 3 days subsequent to the accident.

In The Oriental Fire and General Insurance Co. Ltd. and another v. Union of India [5] the Court held
that it is a valid defense available to the employer to plead that the personal injury which had
admittedly been caused to the employee by accident arising out of and in the course of his
employment has not resulted in the total or partial disablement of the workman for a period
exceeding three days. If it could be proved, the employer is not liable for compensation under
Section 3(1) of the Act.

Section 3 (1) (b) any injury not resulting in death or permanent total disablement caused by an
accident which is directly attributable to -
i. the employee having been at the time of accident under the influence of drinks or drugs, or
ii. Wilful disobedience of the employee to an order expressly given for the purpose of securing
the safety of the employees, or
iii. Wilful removal or disregard by the employee of any safety guard or device. which he knew
to have been provided for the purpose of securing the safety of the employees.

It has been observed in Bhurangya Coal Co. Ltd. V. Sahebjan Mian, [6] that proviso (b) (ii) to Section 3
(1) applies to only those cases of injuries which do not result in death. Where, therefore, the injury
has resulted in death, the question as to the disobedience of any rule or order is not material at all
so long as it can be reasonably held that the accident arose out of and in the course of the
employment.

Section 3 (4) states that save as provide by Section 3 sub-sections (2), (2A) and (3) no compensation
shall be payable to an employee in respect of any disease unless the disease is directly attributable
to a specific injury by accident arising out of and in the course of his employment.

5
AIR 1975 AP 222
6
AIR 1956 Pat 299
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Section 3 (5) nothing shall be deemed to confer any right to compensation on an employee in
respect of any injury if he has instituted in a Civil Court a suit for damages in respect of the injury
against the employer; and no suit for damages shall be maintainable by an employee in any Court of
law in respect of any injury –

a) If he has instituted a claim to compensation in respect of the injury before a Commissioner

[Section 10] or
b) If an agreement has been come to between the employee and his employer providing for
the payment of compensation in respect of the injury in accordance with the provisions of
this Act [Section 28]
c)

3. DECIDING COMPENSATION

AMOUNT OF COMPENSATION
The amount of compensation payable to an employee depends on:
1) The nature of the injury caused by accident.
2) The average monthly wage of the employee concerned, and
3) The age of the employee concerned. [The relevant factor for working out lump-sum equivalent of
compensation amount as specified in Schedule IV. The guiding principle is - higher the age of the
injured employee, the lower the compensation [as per Schedule IV]

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

Section 4 provides that Compensation is payable in case of:

1. Death;
2. Disablement -
a) Permanent total disablement;
b) Permanent partial Disablement;
c) Temporary disablement -
i. Temporary total disablement;
ii. Temporary partial disablement.

WHAT IS THE BASIS OF CALCULATING THE AMOUNT OF COMPENSATION

Wages are the basis for amount of compensation paid. Two employees earning different salaries
therefore will get different amounts of compensation even though the injury they suffered might be
identical.

Wages [Section 2 (1) (m)]: Wages includes –

 any privilege or benefit which is capable of being estimated in money
 other than a travelling allowance, or
 a contribution paid by the employer 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.

COMPENSATION FOR DEATH

Section 4 (1) (a): Where death results, from an injury the compensation is payable to the employees
dependants.
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 Dependent [Section 2(1) (d)]: Dependent means any of the following relatives of a deceased
employee, namely:
a) A widow, a minor, legitimate or adopted son, an unmarried legitimate or adopted
daughter or a widowed mother
b) If wholly dependent on the earnings of the employee at the time of his death a son
or a daughter who has attained the age of 18 years and who is infirm;
c) If wholly or in part dependant on the earnings of the employee at the time of his
death:
i. A widower,
ii. A parent other than a widowed mother,
iii. A minor, illegitimate son, an unmarried illegitimate daughter, or a daughter
legitimate or illegitimate or adopted if married and a minor or if widowed
and minor,
iv. A minor brother or an unmarried sister or a widowed sister if a minor,
v. A widowed daughter-in-law,
vi. A minor child of a pre-deceased son,
vii. A minor child of a pre-deceased daughter where no parent of the child is
alive, or
viii. A paternal grandparent if no parent of the employee is alive.

The compensation due to the dependants is an amount equal to fifty percent of the monthly salary
of the deceased employee multiplied by the relevant factor or an amount of one lakh and twenty
thousand rupees, whichever is more. The minimum compensation in the case of death in no
circumstances can be less than Rs. 1,20,000/-. Although the Central Government may, by notification
in the Official Gazette, from time to time, enhance the amount of compensation.

The ‘relevant factor’ is mentioned in the schedule IV of the Act. The factor depends on the age of the
person deceased, i.e., the number of years the person could have worked for, if he did not die on the
job.

Example: Shankar, a employee aged 35 meets with an accident and dies while at work (i.e. in the
course of employment). At the time he drew a monthly wage of Rs.2,500. As per Schedule IV of the
Act the relevant factor applicable to his case would be Rs. 197.06. As such, the amount of
compensation payable to his dependants will be arrived at in the following way:
 50% of Rs. 2,500 = 1,250
 1,250 x relevant factor (i.e.197.06) = Rs.2,46,325.00/- (total compensation payable)

Note - Where the monthly wages of an employee exceeds Rs. 4000, his monthly wages for the
purpose of Section 4 (1) (a) shall be deemed to be four thousand rupees only.

According to Section 4(4) if the injury of the employee results in his death, the employer shall, in
addition to the compensation under sub-section (1), deposit with the Commissioner a sum of not
less than five thousand rupees for payment of the same to the eldest surviving dependant of the
employee towards the expenditure of the funeral of such employee or where the employee did not
have a dependant or was not living with his dependant at the time of his death to the person who
actually incurred such expenditure.

COMPENSATION FOR PERMANENT TOTAL DISABLEMENT

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Section 4 (1) (b): Where there is total permanent disablement resulting from the injury suffered, the
employee is entitled to be paid an amount equal to sixty percent of his monthly salary, multiplied by
the relevant factor, or an amount of one lakh and forty thousand rupees, whichever is more.

The minimum compensation in the case of total permanent disablement, in no circumstances can be
less than Rs. 1, 40,000/-. Although the Central Government may, by notification in the Official
Gazette, from time to time, enhance the amount of compensation.

Example: Ravi, an employee aged 35 meets with an accident and suffers permanent total
disablement while at work (i.e. in the course of employment) At the time he drew a monthly wage of
Rs.2,500/- The amount of compensation payable will be arrived at as follows:
 60% of Rs. 2,500 = 1,500
 1,500 x relevant factor (i.e. 197.06) = 2,95,590.00/- (total compensation payable)

Note - Where the monthly wages of an employee exceeds Rs. 4000, his monthly wages for the
purpose of Section 4 (b) shall be deemed to be four thousand rupees only.

Section 4 (1) (c) (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.

COMPENSATION FOR PERMANENT PARTIAL DISABLEMENT

Section 4 (1) (c) (i): Where permanent partial disablement results from the injury specified in Part II
of Schedule I, such percentage of the compensation as is specified therein.

Examples:

Description of injury: % loss of earning capacity

 Amputation through Shoulder joint ..................................... 90
 Loss of all toes of one foot through a
metatorso-phalangeal joint .................................................. 20
 Loss of one eye, without complications,
the other being normal ........................................................ 40

COMPENSATION FOR TEMPORARY DISABLEMENT (WHETHER TOTAL OR PARTIAL)

Section 4 (1) (d): In case of temporary disablement, a half monthly payment of the sum equivalent
to twenty-five per cent (25%) of the monthly wages of the employee, to be paid in accordance with
the provisions of Section 4 (2).

Section 4 (2): The half monthly payment shall be payable on sixteenth day –
i. from the date of disablement where such disablement lasts for a period of 28 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

It has been further provided that there shall be deducted from any lump sum or half-monthly
payments to which the employee is entitled the amount of any payment or allowance which the
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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; [7]
and 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. [8]

Section 4 (2A): The employee shall be reimbursed the actual medical expenditure incurred by him
for treatment of injuries caused during course of employment.

Section 4 (3): On the ceasing of the disablement before the date on which any half-monthly
payment falls due, there shall be payable a sum proportionate to the duration of the disablement.

COMPENSATION TO BE PAID WHEN DUE AND PENALTY FOR DEFAULT

Section 4A (1): compensation amount must be paid as soon as it falls due to victim or his or her
legal heirs.

Section 4A (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,
without prejudice to the right of employee to make any further claim.

Section 4A (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 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.

Section 4A (3A): The interest and the penalty payable under sub-section (3) shall be paid to the
employee or his dependant, as the case may be.

4. PROCEDURE TO BE FOLLOWED FOR RECEIVING COMPENSATION

PROCEDURES AND/OR FORMALITIES PRESCRIBED FOR PAYMENT OF COMPENSATION STARTING

FROM THE TIME OF ACCIDENT

7
Proviso (a) to Section 4 (2)
8
Proviso (b) to Section 4 (2)
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1. Section 10 of the Act prescribes notice of accident given to the employer subject to certain
exceptions.
2. Power of the Commissioner to receive statements regarding fatal accidents from the
employer under Section 10A.
3. Reports of total accidents find to be submitted by the employer to the appropriate
authorities under Section 10B.
4. Penalties – on employer for not discharging duties under the Act. [Section 18A].
5. Medical examination certificate as to the accident under Section 11 of the Act.
6. Determination of employers liability for compensation under Section 3 of the Act.
7. Assessment of loss of earning capacity as per Schedule I read with Section 2(1) (g) and
Section 2 (1) (b) of the Act.
8. Calculation of wages according to method provided in Section 5 of the Act.
9. Verification of the amount of compensation as per provision of Section 4 read with Schedule
IV.
10. Registration of any agreement of compensation [Section 28] and distribution of the same by
the Commissioner according to Section 8 of the Act.
11. Depositing the amount of compensation with and distribution of the same by the
Commissioner according to Section 8 of the Act.
12. Submission of claim application under Section 22 of the Act.
13. Settlement of disputes, if any, by the Commissioner under Section 19 of the Act.
14. Distribution of Compensation after deduction under Section 8 (4) or proviso (a) to Section 4
(2) (ii) of the Act subject to provisions of Section 4A of the Act.

NOTICE OF ACCIDENT AND CLAIM FOR COMPENSATION [SECTION 10]

In the case of an accident causing injury or an accident leading to death – A notice must be sent to
the employer or any other person who is employed to supervise work in the same establishment as
soon as is practicable after the occurrence of the accident.

1. No claim for compensation shall be entertained by a Commissioner unless notice of the

accident has been given as soon as practicable after the happening thereof and unless the
claim is preferred before him within two years of the occurrence of the accident or, in case
of death, within two years from the date of death.

The Commissioner may entertain and decide any claim to compensation even though the
notice has not been given, or the claim has not been preferred in due time, if he is satisfied
that the failure to give the notice or to prefer the claim, as the case may be, was due to a
sufficient cause.

2. The notice must contain:

 The name and address of the person who died or was injured, and
 The cause of the injury, and
 The date on which it occurred, and
 The notice shall be served on the employer or upon any one of several employers, or
upon any person responsible to the employer for the management of any branch of
the trade or business in which the injured employee was employed.

3. The State Government may require that a certain class of establishments must maintain a
notice-book which shall be accessible at all reasonable times to any injured employee
employed on the premises and to any person acting bond fide on his behalf.
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4. The notice from the aggrieved party can be served to the employers by delivering it at, or
sending the notice by registered post addressed to the residence or the office of the
employer, or by entering such notice into the notice book, maintained at the premises of the
office.

COMMISSIONER’S POWERS IN CASE OF ACCIDENT RESULTING IN DEATH

(Section 10-A)

1. Anyone can report to the Commissioner in case of an employee being killed in an accident.

2. In case, the commissioner is aware of a fatal accident, he has the power to send a notice to
the employer requiring him to submit a statement within a month’s time.

3. Within thirty days of such notice being served, the employer should reply as to the
circumstances of such death, and whether, in his opinion, he is to deposit compensation to
the commissioner.

4. If the employer feels that he is responsible to do so, then he must deposit the compensation
with the commissioner within thirty days after the notice is served.

5. If however, he feels in the contrary, he must inform the commissioner of the grounds under
which he claims such exemption.

6. On claiming such exemption, the commissioner may inform the dependants of the deceased
employee, leaving it open to them, whether they would want to claim compensation or not.

REPORT OF FATAL ACCIDENTS AND SERIOUS INJURIES (SECTION 10B)

If there is any law in force requiring the employer to give notice regarding the death or serious
bodily injury of an employee, the employer shall do so, by giving the notice to the Commissioner,
within seven (7) days of such event, describing the circumstances of the injury or death.

PENALTIES (ON EMPLOYER FOR NOT DISCHARGING DUTIES UNDER THE ACT)
Section 18A: If an employer fails to –

 send the commissioner a statement; or report as required in case of fatal accidents fails to
do so, or make returns as to compensation, or
 maintain a notice book.

The employer shall be liable to pay a fine, which may extend to five thousand rupees. Such a
proceeding cannot be made without the previous permission of the commissioner, and the court
shall not take cognizance of any offence, if such matter is not brought before the court at least
within six months from the time that the commissioner becomes aware of such offence.

MEDICAL EXAMINATION (Section 11)

 In cases of injury (not amounting to death) the employer may require the employee to
undergo a medical examination free of charge [Section 4 (2A)]. The injured employee should
submit himself to such medical examination. If the employees condition is so bad that it is
impossible for him to leave his residence then the employer can get him examined at his
residence.
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 If the employee does not agree to submit himself for a medical examination, by a qualified
medical practitioner, then he shall lose his right to claim compensation from his employer,
and this right shall be suspended for so long as he refuses to appear for the examination.

 In case the employee does not submit himself for the examination and dies before doing so,
the commissioner may, if he thinks fit, make an order to pay compensation to the
dependants of the deceased [employee].

 Where an injured employee having being examined by a qualified medical practitioner has
deliberately disregarded the instructions of such medical practitioner, then, if it is proved
that the disregard or failure was unreasonable and that the injury has been aggravated
thereby, the injury shall be deemed to be of the same nature, if the employee had been
regularly attended by a qualified medical practitioner, whose instructions he had followed,
and compensation, if any, shall be payable accordingly.

REGISTRATION OF AGREEMENTS AND EFFECT OF FAILURE TO REGISTER AGREEMENT

(SECTION 28)

Where the amount of any lamp sum payable as compensation has been settled by an agreement or
where any compensation has been so settled as being payable to a woman, or a person under a legal
disability - a memorandum thereof shall be sent by the employer to the Commissioner, who shall, on
being satisfied as to its genuineness, record the memorandum in a register in the prescribed
manner.

Such agreements/memorandum should be registered and the money should not be given directly,
but deposited with the Commissioner.
However -
 No such memorandum can be registered by the commissioner before the lapse of seven (7)
days from the time he had received the notice of such accident.

 The commissioner may at any time alter the registration. And if he has reason to believe that
the agreement has been reached due to fraud or undue influence, he may refuse the
memorandum sent by the employer, and can pass an appropriate order, including an order
to pay the compensation.

(SECTION 29)

The Law requires the employer to registers such agreements with the Commissioner. If the employer
fails to register such a memorandum, the commissioner may order the employer to pay the entire
amount of compensation that the provisions of the Act provide for.

In such agreements the employer cannot pay less than the principle sum due. If he does so the
agreement will not be registered. A compromise can only be made in terms of the interest and
penalty due from the employer.
DISTRIBUTION OF COMPENSATION (Section 8)

1. No payment of compensation in respect of an 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:
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2. The receipt of the Commissioner shall be a sufficient discharge in respect of any

compensation deposited with him.

3. Compensation in respect of an Employee whose injury has resulted in death:

 On the deposit of money with the Commissioner as compensation in respect of a

deceased employee the Commissioner shall cause notice to be served on each
dependant calling upon the dependants to appear before him on such date as he
may fix for determining the distribution of the compensation.

 Compensation shall be apportioned among the dependants 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 dependant.

 However, if the Commissioner, after conducting an inquiry, is satisfied that no

dependant exists, he shall repay the money to the employer by whom it was paid.

4. Payment of a lump sum as compensation to a woman or a person under a legal disability:

 Where lump sum money has been deposited with the Commissioner such sum may
be invested, applied or dealt with for the benefit of the woman, or of such person
during his disability.

 Where a half-monthly payment is payable to any person under a legal disability, the
Commissioner may order that the payment be made during the disability - to any
dependant of the employee or to any other person, whom the Commissioner thinks
best fitted to provide for the welfare of the employee.

 Where on application made to him in this behalf or otherwise, the commissioner is

satisfied that – an order of the Commissioner as to the distribution of compensation
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.

 Where the Commissioner varies any order 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 as an arrear of land-revenue

COMPENSATION NOT TO BE ASSIGNED, ATTACHED OR CHARGED

Section 9: No lump sum or half-monthly payment payable under this Act shall in any way be capable
of being assigned or charged or be liable to attachment or pass to any person other than the
employee by operation of law.

5. LEGAL REMEDIES
In cases where the employer does not pay compensation after notice has been issued and after the
lapse of 30 days from the date of the accident, or where the employee and employer fail to arrive at
an agreement, an application can be made to the labour officer by the employee.
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The proceedings before the Commissioner are quasi-judicial in nature. However, a few provisions of
the Civil Procedure Code may be used to empower the Commissioner to dispose of the cases. These
provisions are: to take evidence on oath; enforce attendance of witnesses; and compel production
of documents and other required objects may be used by the Commissioner to dispose of his/her
cases.

WHO CAN MAKE THE CLAIM

The injured employee or someone on his behalf can file a claim for employees compensation. In
reality mostly a lawyer files the claim.
WHO SHOULD THE CLAIM BE MADE TO

Section 22 (1): Where an accident occurs in respect of which liability to pay compensation under this
Act arises, a claim for such compensation may, subject to the provisions of this Act, be made before
the Commissioner.
TIME PERIOD WITHIN WHICH THE CLAIM SHOULD BE MADE

All such claims have to be made within two years of the occurrence of the accident, or death of the
employee. However, the commissioner may entertain and decide any claim to compensation even
though the notice has not been given, if he is satisfied that the failure to give the notice was due to
sufficient cause/ reason

What is ‘Sufficient cause/ Reason’?

Example # 1: As a result of an accident arising out of work, a employee sustained multiple fractures
on both his legs and had to be operated upon twice. He remained under treatment for three and-a-
half years. The court held that there was sufficient cause of delay.

Example # 2: In a Madras High Court case [9] it was held that “... the cause for the delay i.e.,
illiteracy, minority of children, nature of employment in its totality is sufficient reason to condone
the delay….” In this case the widow of the deceased employee filed the application after a delay of 8
years.

In case the accident is the contraction of an occupational disease, the first few days of the employee
being continuously absent due to the disease, shall be considered as the day of occurrence of the
accident. In case, the disease does not force the employee to take leave, then the period of
limitation shall be from the date that the employee gives notice to his employer of his condition.

FORM OF APPLICATION (Section 22)

(1) Where an accident occurs in respect of which liability to pay compensation under this Act arises,
a claim for such compensation may, subject to the provisions of this Act, be made before the
Commissioner.

(1A) Subject to the provisions of sub-section (1), no application for the settlement of any matter by
Commissioner, other than an application by a dependant or dependants for compensation, shall be
made unless and until some question has arisen between the parties in connection therewith which
they have been unable to settle by agreement.

(2) An application to a Commissioner may be made in such form and shall be accompanied by such
fee, if any, as may be prescribed, and shall contain, in addition to any particulars which may be

9
Laxmi and others vs. Deputy commissioner of Labour of Madras and Another 1998 I LLJ158(Mad) (DB)
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prescribed, the following particulars namely:--

 a concise statement of the circumstances in which the application is made and the relief or
order which the applicant claims;
 in the case of a claim for compensation against an employer, the date of service of notice of
the accident on the employer and, if such notice has not been served or has not been served
in due time, the reason for such omission;
 the names and addresses of the parties; and
 Except in the case of an application by dependants for compensation a concise statement of
the matters on which agreement has and of those on which agreement has not been come
to.

(3) If the applicant is illiterate or for any other reason is unable to furnish the required information in
writing, the application shall, if the applicant so desires, be prepared under the direction of the
Commissioner.

SETTLEMENT OF DISPUTE (Section 19)

 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 a
employee) or as to the amount or duration of compensation (including any question as to
the nature or extent of disablement), the question shall, in default of agreement, be settled
by a Commissioner. And

 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, decided or dealt with by a Commissioner or to enforce
any liability incurred under this Act.

APPEARANCE AND RECORD OF EVIDENCE

Section 24: Any appearance required to be made by any person before a Commissioner may be
made on behalf of such person -
 by a legal practitioner, or
 by an official of an Insurance Company, or
 by a registered Trade Union, or
 by an Inspector appointed under sub-section (1) of section 8 of the Factories Act, 1948, or
 by an Inspector appointed under sub-section (1) of section 5 of the Mines Act, 1952, or
 by any other officer specified by the State Government in this behalf, authorised in writing
by such person, or,
 With the permission of the Commissioner, by any other person so authorised.

Section 25: The Commissioner shall make a brief memorandum of the substance of the evidence
given by each witness and such memorandum shall be written and signed by the Commissioner with
his own hand and shall form part of the record.

The evidence of any medical witness shall be taken down as nearly as may be word for word.

TIME LIMIT FOR DISPOSAL OF CASES

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Section 25A: The Commissioner shall dispose of the matter relating to compensation under this Act
within a period of three (3) months from the date of reference and intimate the decision in respect
thereof within the said period to the employee.
APPEAL

Section 27: A Commissioner may, if he thinks fit, submit any question of law for the decision of the
High Court and, if he does so, shall decide the question in conformity with such decision.

Section 30: An appeal shall lie to the High Court from the following orders of a Commissioner,
namely –

a. An order awarding as compensation a lump sum or disallowing a claim in full or in part for a
lump sum;
b. An order awarding interest or penalty under section 4A;
c. An order refusing to allow redemption of a half-monthly payment;
d. An order providing for the distribution of compensation among the dependants of a
deceased employee; or
e. An order refusing to register a memorandum of agreement or registering the same subject
to conditions:
 That no appeal shall lie against any order unless a substantial question of law is
involved in the appeal.
 That no appeal shall lie in any case in which the parties have agreed to abide by the
decision of the Commissioner, or in which the order of the Commissioner gives
effect to an agreement made by the parties.
 That no appeal by an employer under clause (a) shall lie unless the memorandum of
appeal is accompanied by a certificate by the Commissioner to the effect that the
appellant has deposited with him the amount payable under the order appealed
against.

The provisions of section 5 of the Limitation Act, 1963, shall be applicable to appeals under this
section. The period of limitation for an appeal under this section shall be sixty days.

BAR AGAINST DOUBLE REMEDIES

Once an injured employee reaches an agreement with, the employer the said employee cannot
initiate a simultaneous proceeding in a civil court in respect of the same injury (but s/he can in a
criminal court).

Similarly if the employee institutes a suit for compensation, for injury sustained during the course of
work, in a civil court, then s/he cannot then apply to the Labour Commissioner under this Act.

Therefore the employee can chose the type of remedy s/he wants i.e. either under the Employees
Compensation Act, or civil court or Motor Vehicles Act (in case of a motor accident), but s/he cannot
apply for more than one remedy.

6. CONCLUSION

COMPARATIVE ANALYSIS
(A) WORKERS’ COMPENSATION LAW – UNITED STATES OF AMERICA
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Workers' Compensation Law is that area of law that administers the laws implemented by the
government for ill, injured and disabled workers.

The program includes state-mandated insurance which reimburses these workers when they are
injured on the job and provides benefits for dependent family members when the employees are
killed as a result of illnesses or accidents caused by their employment.

Workers’ Compensation laws are not uniform. Workers Compensation Acts exist at state level
allowing each state to create individual programs and statutes for the protection of injured and ill
workers.

The workers compensation laws cover - medical care, rehabilitation and job retraining costs also.

The various Workers’ Compensation Law in operation in USA are:

Black Lung Benefits Act, Merchant Marine Act, Coal Mine Workers' Compensation, Occupational
Safety and Health Organization, Workers Compensation and the Americans with Disabilities Act

(B) WORKERS’ COMPENSATION LAW - ENGLAND

An employee injured at work in the UK is able to claim not only social security benefit from the state
under the industrial injuries compensation scheme, but also damages from the employer if liability in
tort can be established. Use of one system of compensation does not lead to exclusion from the
other; there is no ‘employer privilege’ preventing an employee claiming from both workers’
compensation and tort.

It is the State that has taken full responsibility for all payments. The industrial injuries scheme is
financed by the state.
It is compulsory for an employer to insure against liability to employees injured in the course of their
employment. Failure to comply with the statutory obligation to insure is subject to sanctions in the
criminal law.

The industrial injuries scheme provided for compensation only if workers are injured ‘in the course
of employment’ and their wrongdoing may affect entitlement. This scheme offers monetary
compensation only. Medical care and rehabilitation assistance are available free of charge under the
National Health Service, but no special provision is made for those injured at work. Nor is the
scheme linked to any retraining or support services to encourage a return to work. It is very
important to emphasise that loss of earnings resulting from the industrial injury is not covered by
the scheme.

The benefit (monetary compensation) is paid exclusively by means of a pension. Pensions increase in
line with inflation and are often paid for life even though that period is uncertain. A pension can be
increased later if there is an unforeseen aggravation of injury.

SUGGESTIONS FOR IMPROVING THE PROVISIONS REGARDING THE EMPLOYEES COMPENSATION

ACT IN INDIA
With the recent amendments to this Act in 2010, this Act has been made full-proof by removing all
the loopholes. However, on comparative analysis of the worker compensation laws in countries in
U.S.A. and U.K. the researcher would like to make certain suggestions to Indian Act governing
employees’ compensation. These suggestions are:
In United States of America -
 The workers’ compensation laws beside covering for total or temporary disablement/injury
also covers medical care, rehabilitation and job retraining costs.
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 The compensation is financed by the State.

In UK -
 The industrial injuries scheme is financed by the state.
 The benefit (monetary compensation) is paid exclusively by means of a pension. Pensions
increase in line with inflation and are often paid for life even though that period is uncertain.
A pension can be increased later if there is an unforeseen aggravation of injury.