Legal Obligation On Employer To Pay Compensation

5/28/2020 Legal Obligation on Employer to Pay Compensation
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Legal Obligation on Employer to Pay

Compensation
4062 words (16 pages) Essay in Contract Law
 02/02/18  Contract Law  Reference this  Law Student
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Jurisdiction(s): India
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The Workmen Compensation Act, 1923 was one of the social security legislation. This act was
enacted to put legal obligation on employer to pay compensation if any accident happens to
workmen and injures him while working in the premises of the workplace [1]
Section 3 (1) of the Workmen Compensation Act, 1923 says that-
“If personal injury is caused to a workman by accident arising out of and in the course of his
employment, his employer shall be to pay compensation in accordance with the provision of
Chapter (II)…..”
There are three components in the definition [2] which are – (1) personal injury (2) accident (3)


arising out of and in the course of the    Thislast
employment. point 
is the key of this section. More
https://www.lawteacher.net/free-law-essays/contract-law/legal-obligation-on-employer-to-pay-compensation-contract-law-essay.php 1/12
over these two phrases has been subjected to different kind of judicial interpretation and in varieties
of cases the court has given their opinion about the meaning of these two phrases. The originality of
these two phrases is an English Act of 1897 which was followed in different countries legislation
including India. [3] The term “scope of employment” was replaced by “in the course of employment”
in nineteenth century. [4] With advancement in the field of industry workmen have become more
insecure with regard to their employment and as a result of that many social security legislation has
come up. This Act is also among them. [5] The judiciary has also realized this purpose of the act and
interpreted the terms widely and gave birth to doctrine of notional extension.
The objective of this paper is to explore the meaning of the term “out of employment” in this act
given by the judiciary and the development of theory of “notional extension” by the judiciary taking
the help of different cases laws.
Meaning of “arising out of Employment”:

It is not easy to determine the scope of this term and lay down the test to determine what is “arising
out of employment”. There were many attempts to construct a meaning of this term. It has been
tried to explain by nature, condition, objects and incidents of employment. [6] To understand it we
need to look at it from very beginning taking the help of English cases as well as Indian cases.
Test of “nature employment”
In Simpson v. Sinclair [7] a workman was injured because of a wall fall which has no connection with
her employment. But this wall fall resulted into fall of a shed where she was working. Lord Shaw
observed that “arising out” of is not limited to the nature of the employment but applies to the
employment as such, to its nature, its condition, its obligation and its incidents. If because of these a
workmen is expose to special danger than that can be brought under the preview of “arising out of
employment”. [8] In this case court has given a wider meaning of the term and did not stick to any
specific condition to fulfill.
Casual Connection between employment and accident test
There should be a casual connection between the work and the accident which is explained in
Charles R. Davidson v. M. Robb [9] . Lord Dunedin said that the term “in the course of” further
explain the term “arising out of”. It is difficult to visualize that there can be any accident which is
arising out of employment but not in the course of employment. Workmen should be doing
something as part of his service and it is not important that he has to do actual work but something
connected to the work. Lord Haldane said that there need to show casual relation between the work
and an order, express or implied by the employer. [10] The employment is the cause and accident is
the effect [11]
In Mackinnon Mackenzie and Co. (P) Ltd. v. Ibrahim Mahmmed Issak [12] court has supported the


above judgment and said that there
 should
  be ‘’casual
 connection’
  and only ‘nature of employment’
is not a judging factor. Justice V. Ramaswami explained the meaning and said that
“The words “in the course of the employment” mean “in the course of the work which the workman
is employed to do and which is incidental to it.” The words “arising out of employment” are
understood to mean that during the course of the employment, injury has resulted from some risk
incidental to the duties of the service, when, unless engaged in the duty owing to the master, it is
reasonable to believe the workman would not otherwise have suffered.
In other words, there must be a causal relationship between the accident and the employment. The
expression “arising out of employment” is again not confined to the mere nature of the
employment. The expression applies to employment as such– to its nature, its conditions, its
obligations and its incidents. To put it differently, If the accident had occurred or account of a risk
which is an incident of the employment, the claim for compensation must succeed, unless of course
the workman has exposed himself to an added peril by his own Imprudent act.”
Following the above judgment in State of Rajasthan v. Ram Prasad and another [13] supreme court
said that the accident must a casual connection with employment and arise out of it. It was also said
that even if the workman has died because of natural forces he can get compensation showing that
his employment exposed him to such hazard.
The need of casual connection has been the test even in the recent time. In Shakuntala chandrakant
Shreshti v. prabhakar Maruti Garveli and Another; [14] Justice S. B Sinha observed that there must be
a casual connection between the accident and the work done in the course of employment. [15]
In Bhagubai v. General Manager, Central Railway [16] the idea of cause of accident was clarified and
remote cause was excluded from the ambit. Justice Chagla observed that there must be a casual
connection between the accident and employment in order to say that the accident arose out of
employment. The court emphasized that cause must be proximate cause and not any remote
cause. [17] The peril of injury which the workmen face should be incidental to the employment not
anything personal. It must be inherent in the employment or incidental to it. [18]
Indirect Connection is Sufficient:
Court included indirect connection between employment and injury within the meaning of this term
which makes this phrase wider. In this matter Bombay High Court says that “arising out of
employment” suggest the point of time means during the time of employment and place. It also
says that there should be connection between the employment and the injury but not necessary
direct connection. [19] In Public Works Department v. Smt. Kausa [20] Justice P.R Sharma observe
that the term “arising out of employment” has been given a wider meaning and can cover a situation
where there is no direct connection between injury caused by an accident and the employment. [21]
Risk of accident is inherent or incidental to the employment:



      
It is not sufficient to make the employer liable if the injury occurred in the working hour and the
place of employment but there need to have some connection between the accident and nature of
the duty the workmen has been given. [22] The workman should be doing something which is part
of his work though it need not be the actual work. [23] In Munshi & Co. v. Yeshwant Tukaram
Teli [24] the workmen was employed in a godown and injured because of explosion. Justice Macklin
said that “an accident cannot be said to be arise out of employment unless the risk of such an
accident has been, even before the accident, inherent in the employment itself to a greater or lesser
extent” [25] In Lancashire & Yorkshire Railway v. Highley [26] Lord Summon observed that is the part
of his employment to hazard, to suffer or to do that which caused injury? If yes then it can be said
that the accident arose out of employment. [27] Here court examined that whether the danger is
part of employment or not.
Test to detect “ arising out of employment”
In Ravuri Kotayya v. Dasari Nagavardhanamma [28] Andhra Pradesh High Court has laid down the
test by which is accident has arisen out of and in the course of employment can be established [29] :
The workman was employed on or performing the duties at the time of accident.
That the accident occurred at or about the place where he was performing these duties or where the
performance of the duties required him to be present.
That the immediate act which led to or resulted in the accident has some form of casual relation
with the performance of these duties, and such casual connection could be held to exist if the
immediate act which led to the accident is not so remote from the sphere of his duties or the
performance thereof , as to be regarded as something foreign to them.
There are certain exception to the above rule like the accident involve some risk common to general
public and if he by his own act expose himself to some added peril and has accident.
Doctrine of Notional Extension:

There is no problem in detecting that the accident occurred in the course of employment when a
workman is injured in the working place and in the working hour and doing his duty. The problem
arises when these elements do not coincide together. But a workmen if injured just near the work
premises or just before joining the work or in the way to work problem arises. To address this kind of
problem and giving some kind of relief to the workmen the theory of notional extension
evolved. [30]
“As a rule, the employment of a workman does not commence until he has reached the place of
employment and does not continue when he has left the place of employment, the journey to and
from the place of employment being excluded. It is now well-settled, however, that this is subject to
the theory of notional extension of the employer’s premises so as to include an area which the


      
workman passes and repasses in going to and in leaving the actual place of work. There may be
some reasonable extension in both time and place and a workman may be regarded as in the course
of his employment even though he had not reached or had left his employer’s premises. The facts
and circumstances of each case will have to be examined very carefully in order to determine
whether the accident arose out of and in the course of the employment of a workman, keeping in
view at all times this theory of notional extension.” [31]
Wider interpretation of duty
Court has given a wider and popular meaning of “duty” to expand the scope of this section. The
court also talks about the service contract to determine which can be come under the preview of this
section. Justice Cozens-Hardy M. R. said “……… it was an implied term of the contract of service that
these trains should be provided by the employers, and that the colliers should have the right, if not
the obligation, to travel to and from without charge.” In the next case the court has interpreted the
term “duty” in stricter sense. [32]
In Weaver v. Tredegar Iron Coal Co. [33] House of Lords after examining a large number of
authorities given a wider meaning of “duty” but did not negated the duty test. [34] In this case lord
Atkin said that there can be no doubt that the course of employment cannot be limited to the time
or place of the specific work which the workman is employed to do. It does not necessarily end
when the “‘down tools” signal is given, or when the actual workshop where he is working is left. In
other words, the employment may run on its course by its own momentum beyond the actual
stopping place. There may be some reasonable extension in both time and space.” [35] Lord Porter
further said that if an accident occurs while coming to the workplace or leaving the place can be out
of and in the course of employment if he is bound by the way he proceed under the terms of the
contract of service express or implied. [36] Here duty test was confirmed.
Expanding the preview of Service Contract:
In St. Helens Colliery Co Ltd v. Hewlston [37] the court said that the injury did not occur in the course
of employment because the employee was not bound or obliged to travel by that special train and
he could have taken other transport. If he were bound by the service contract to travel by that train
then it would have been in the course of employment (Lord Buckmaster). It was also added that if
the place of work is like that there is no alternative means of transport other than the transport
given by the employer then it can be concluded that there is an implied term in the service contract
to use that transport (Lord Atkinson). [38] The same view was taken in Mackenzie v. I.M.
Issak [39] which says that a workman in a colliery is not in course of his employment while using the
transport of the employer if he is not bound by the terms of the contract to travel by that
transport. [40]
There was a particular situation where employee has to take bus service to reach his workplace from
home and vise versa. It was necessary for doing his duty efficiently and punctually which was a


condition under his service [41] . 
So, travelling
  in that
 bus was an implied
 condition to his duty. It
was also said that this doctrine was developed to cover the factory, workshops and harbors but it
can be applied in this kind of situation also. [42] Compensation was granted holding that the
accident arising in the course of employment. Though the court said what would be the indicator
that when the work starts and ceases that depends on case to case basis. [43]
In Union of India v. Mrs . Noor Jahan [44] a railway gangman was ordered by his employer to go to
another place for cleaning and in the way from one place to another accident happened. Justice
Sukla observed that the accident has occurred in the duty hour and when he was going to do his
duty on behalf of his employer and he concluded that the accident has occurred in the course of his
employment.
Public Place and this Doctrine
There are some situations where this doctrine does not apply. When a workman is on the public
road or public place and not there for fulfilling the obligation and his work does not make necessary
to be there. The proximity of the work premises and spot of accident become immaterial. The
notional extension of the place of work cease when workman come to a public road. [45] There were
some clarification made in the next case in this matter.
In Saurashtra Salt Manufacturing Co. v. Valu Raja [46] Justice Jafer Imam said that,
“It is well settled that when a workman is on a public road or a public place or on a public transport
he is there as any other member of the public and is not there in the course of his employment
unless the very nature of his employment makes it necessary for him to be there. A workman is not
in the course of his employment from the moment he leaves his home and is on his way to his work.
He certainly is in the course of his employment if he reaches the place of work or a point or an area
which comes within the theory of notional extension, outside of which the employer is not liable to
pay compensation for any accident happening to him.”
Expanding for Social Cause:
In later cases the court took more liberate stand in expanding the definition of notional extension
1
realizing
 the social view point and objective of the act. The employee died onOrder
the way   his
towards
workplace because of communal riot. [47] It was argued by the appellant that the person died
before the commencement of his work and outside the work place. [48] There is no connection
between the accident and the employment. [49] High court of Madras has negated all this argument
and allowed the compensation.
In Superintending Engineer, T.N.S.E.B v. Sankupathy (T. M. T.) [50] an Ardhanari was died when he

was coming to his work under appellant. Court said that “Since the Act is a welfare legislation, it is
expected that the provisions would receive liberal interpretation so as to advance the object and 
purpose of the Act.” [51] The court also observe that “in the course of employment” talks about the
point of time and place of accident
 and “outof employment”
   talks
about a casual connection
between the accident and the employment and which according to the court is very narrow
interpretation giving the modern industrial set up. So doctrine of notional extension should be used
and even if the workman did not reach the place of work the workmen should get compensation for
accident. [52]
Conclusion:
The term “arising out of” has been subjected to judicial interpretation from the very beginning and
in most of the times it has been seen that court has tried to give wide meaning to it. This phrase has
been most of the time coupled with the “arising out of employment” . Even thought the meaning of
these two phrases are different then also there is an inseperable connection between them.
Previously it was thought that arising “in the course” is a big circle and “ out of” is a small circle
within it. But the new notion is that this two phrases are different circle which intersect
somewhere. [53] This two criteria need to fulfill to get compensation. These two phrases are
conjunctive under this act. [54] If these terms have been disjunctive a large area could have been
covered and more number of workers could have been benefited and fulfill more efficiently the
objective of the act as it would have been sufficient to prove only one condition.
Even thought the judiciary has come up with the concept of notional extension which essentially
wider the scope of the terms and cover the areas which is not conventionally considered under this
terms. This doctrine appeared to be very helpful for workmen to get facility given under this act.
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Legal Obligation On Employer To Pay Compensation

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Legal Obligation on Employer to Pay

 02/02/18  Contract Law  Reference this  Law Student

Section 3 (1) of the Workmen Compensation Act, 1923 says that-

Meaning of “arising out of Employment”:

Test of “nature employment”

Casual Connection between employment and accident test

Indirect Connection is Sufficient:

Risk of accident is inherent or incidental to the employment:

Test to detect “ arising out of employment”

Doctrine of Notional Extension:

Wider interpretation of duty

Expanding the preview of Service Contract:

Public Place and this Doctrine

Expanding for Social Cause:

Important Information for UK Law Students

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