E-LECTURE LABOUR LAW.

THE CENTRAL UNIVERSITY OF KASHMIR

WORKMEN COMPENSATION ACT 1923

 Introduction
 Definitions
 Aims and objectives

INTRODCUTION:

The Workmen Compensation Act, 1923 is an enactment that was issued by the central
Government and was implemented by various State Governments which gives social security
to workers. This security is offered by the law for people who work.

The Act was formed after it was noted that laborers were getting more exposed to danger
with the use of advanced and sophisticated machinery. The common law had it that the
employer would only take up the compensation responsibility if it is found that the industrial
accident was a result of his negligence. In India, the issue of compensating workmen after
fatal and major accidents hit the road in 1884. It was then in 1885 that the factory and mining
inspectors realized that the Fatal Accidents Act, 1885, was not enough to attend to the
intended purposes.

The State offered a hearing ear when members of the Legislative Assembly, employers’
representatives, workers and experts in medicine and insurance formed a committee that gave
a report that led to the enacting of the Workmen’s Compensation Act in 1923.

The passing of the Act put a stop and offered a relief for workers who would have gone
through court processes that are often expensive, an effort to seek compensation whenever
they acquired an injury during employment.

Aspects of The Workmen Compensation Act

The Act has its basis on two aspects:

1) Theory of least cost.
2) The production cost shall have the cost of blood and workmen included.

For an industry to run, an employer uses capital, skills in business and the labour of workers
who are paid for the labour. The management has to put aside finances for the possibility of
the expense needed to repair the machines when they break down. If that care and attention
can be given to machines, human beings working in the same environment need also receive
care and attention for the risks they undertake when working in that industry.

Social security offers to ensure compensation is paid to a disabled or injured person only if
the accident rose in the middle of the employment. The compensation paid to a workman by
an employer when an accident occurs is a relief and social security measure provided by the
Act. A workman is now able to get compensation regardless of his negligence.

The Act also puts in place the amount that is to be paid according to the intensity of the
injury. This makes an employer aware of the amount of compensation he is liable to pay in
E-LECTURE LABOUR LAW. THE CENTRAL UNIVERSITY OF KASHMIR

case of an accident.

The Act is recognized all over India and applies to all workmen and casual workers in
factories, plantations, mines, transport establishments, railways, ships, circuses, construction
work and any other potentially dangerous occupations made mention in Schedule II of this
Act. The Act is not applicable to people in the Armed Forces.

DEFINITIONS SECTION 2:

Section 2 in The Workmen's Compensation Act, 1923 define various important

terms used in the Act:

(1) In this Act, unless there is anything repugnant in the subject or context,

(b) " Commissioner" means a Commissioner for Workmen' s Compensation appointed

under section 20;

(c) " compensation" means compensation as provided for by this Act;

(d)  " dependant" means any of the following relatives of a deceased workman, namely:--
(i) a widow, a minor legitimate son, and unmarried legitimate daughter, or a widowed
mother; and
(ii) if wholly dependent on the earnings of the workman at the time of his death, a son or
a daughter who has attained the age of 18 years and who is infirm;
(iii) if wholly or in part dependent on the earnings of the workman at the time of his
death, (a) a widower, (b) a parent other than a widowed mother, (c) a minor illegitimate
son, an unmarried illegitimate daughter or a daughter legitimate or illegitimate if married
and a minor or if widowed and a minor, (d) a minor brother or a unmarried sister or a
widowed sister if a minor, (e) a widowed daughter- in- law, (f) a minor child of a pre-
deceased son, (g) a minor child of a pre- deceased daughter where no parent of the child
is alive, or (h) a paternal grandparent if no parent of the workman is alive;]

(e) " employer" includes any body of persons whether incorporated or not and any
managing agent of an employer and the legal representative of a deceased employer, and,
when the services of workman are temporarily lent or let on hire to another person by the
person with whom the workman has entered into a contract of service or apprenticeship
means such other person while the workman is working for him;

(f) " managing agent" means any person appointed or acting as the representative of
another person for the purpose of carrying on such other person' s trade or business, but
does not include an individual manager subordinate to an employer;
(ff) 2 " minor" means a person who has not attained the age of 18 years;]

(g) " partial disablement" means, where the disablement is of a temporary nature, such
disablement as reduces the earning capacity of a workman in any employment in which
he was engaged at the time of the accident resulting in

(h) " prescribed" means prescribed by rules made under this Act;

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(i) " qualified medical practitioner" means any person registered  2 under any 3 Central Act,
Provincial Act or an Act of the Legislature of a 4 State]] providing for the maintenance of
a register of medical practitioners, or, in any area where no such last- mentioned Act is in
force, any person declared by the State Government, by notification in the Official
Gazette, to be a qualified medical practitioner for the purposes of this Act;  

(k) " seaman" means any person forming part of the crew of any ship, but does not include
the master of  the ship;

(l) " total disablement" means such disablement, whether of a temporary or permanent

nature, as incapacitates a workman for all work which he was capable of performing at
the time of the accident resulting in such disablement: Provided that permanent total
disablement shall be deemed to result from every injury specified in Part I of Schedule I
or from any combination of injuries specified in Part II thereof where the aggregate
percentage of the loss of earning capacity, as specified in the said Part II against those
injuries, amounts to one hundred per cent or more;

(m) " wages" includes any privilege or benefit which is capable of being estimated in
money, other than a travelling allowance or the value of any travelling concession or a
contribution paid by the employer of a workman towards any pension or provident fund
or a sum paid to a workman to cover any special expenses entailed on him by the nature
of his employment;

Basis for calculation of compensation

The basis for calculation of compensation is monthly “wages”; Zubeda Bano v. Maharashtra
Road Transport Corporation, 1990 LLR 287 (Bom).

“Batta” does not amount to “wages” for computing compensation

“Batta” paid to a workman per day to cover special expenses incurred by him due to nature of
his employment does not amount to “wages” for the purposes of computing compensation;
New India Assurance Co. Ltd., Hyderabad v. Kotam Appa Rao, 1995 LLR 609 (AP)

(n) " workman" means any person (other than a person whose employment is of a casual
nature and who is employed otherwise than for the purposes of the employer' s trade or
business) who is--
(i) a railway servant as defined in section 3 of the Indian Railways Act, 1890 (9 of 1890 ), not
permanently employed in any administrative, district or sub- divisional office of a railway
and not employed in any such capacity as is specified in Schedule II, or
(ii) employed  in any such capacity as is specified in Schedule II. whether the contract of
employment was made before or after the passing of this Act and whether such contract is
expressed or implied, oral or in writing; but does not include any person working in the
capacity of a member of  the Armed Forces of the Union]  ; and any reference to a workman
who has been injured shall, where the workman is dead, include a reference to his dependants
or any of them.
The provisions of the Act have been extended to cooks employed in hotels, restaurants using
power, liquefied petroleum gas or any other mechanical device in the process of cooking.
E-LECTURE LABOUR LAW. THE CENTRAL UNIVERSITY OF KASHMIR

Conditions for treating a person as workman

From the definition of ‘workman’ given in section 2 (1) (n) of the Act, it is clear that for not
treating a person as workman, two conditions are required to be proved namely that his
employment is of casual nature and he is not employed for the purpose of employee’s trade or
business and the onus is on the employer to prove these conditions; Mangala Ben v. Dalip
Motwani, 1998 LLR 656.

AIMS AND OBJECTIVES OF THE ACT

The growing complexity of industry in this country, with the increasing use of machinery and
consequent danger to workmen, along with the comparative poverty of the workmen
themselves, rendered it advisable that they should be protected, as far as possible from
hardship arising from accidents. After a detailed examination of the question by the
Government of India, Local Governments were addressed in July 1921, and provisional
views of the Government of India were published for general information. The advisability of
legislation had been accepted by the great majority of Local Governments and of employers’
and workers’ associations and the Government of India believed that public opinion generally
is in favour of legislation..

The general principles of workmen’s compensation command almost universal acceptance

and India is now nearly alone among civilised countries in being without legislation
embodying those principles. For a number of years the more generous employers have been
in the habit of giving compensation voluntarily, but this practice is by no means general. The
growing complexity of industry in this country, with the increasing use of machinery and
consequent danger to workmen, along with the comparative poverty of the workmen
themselves, renders it advisable that they should be protected, as far as possible from
hardship arising from accidents.

An additional advantage of legislation of this type is that by increasing the importance for the
employer of adequate safety devices, it reduces the number of accidents to workmen in a
manner that cannot be achieved by official inspection. Further, the encouragement given to
employers to provide adequate medical treatment for their workmen should mitigate the
effects of such accidents as do occur. The benefits so conferred on the workman added to the
increased sense of security which he will enjoy, should render industrial life more attractive
and thus increase the available supply of labour. At the same time, a corresponding increase
in the efficiency of the average workman may be expected. A system of insurance would
prevent time burden from pressing too heavily on any particular employer.

The Workmen's Compensation Act, aims to provide workmen and/or their dependents some
relief in case of accidents arising out of and in the course of employment and causing either
death or disablement of workmen. It provides for payment by certain classes of employers to
their workmen compensation for injury by accident.
 
E-LECTURE LABOUR LAW. THE CENTRAL UNIVERSITY OF KASHMIR