ASSIGNMENT - LABOUR LAW II

SUBJECT CODE- LLB 401

EXAMINE THE EMPLOYER'S LIABILITY FOR COMPENSATION

DEPARTMENT OF LAW
TRINITY INSTITUTE OF PROFESSIONAL STUDIES

SUBMITTED TO: SUBMITTED BY:

Dr. Sonika Ahlawat Tushar Yadav
Assistant Professor, TIPS BALLB 2020-25
Semester- 8
E.No. 04820603820
 INTRODUCTION
Every employee wants to be paid for the costs he has incurred and requires a stable work.
Regardless of how big or small the organisation is, this is a need that must be met. After all,
employees are what make a firm successful. Therefore, a company’s main goal is to defend its
employees’ rights and ensure their safety. This page covers a wide range of topics, including
who is eligible to file a claim for compensation, how much compensation is provided, and more.
The “Employees Compensation Act, 1923” is a law that allows businesses to compensate
employees for whatever injuries they may have sustained in an accident.[1]
The Workmen Compensation Act, 1923, was the previous name for this legislation. Imagine
what would happen if an employee who is putting in great effort learned that they would not be
receiving any benefits. After all, people frequently take actions in hopes of receiving a reward.
When the vicarious liability rule is in effect, the employer is responsible for paying damages
regardless of culpability. Although the employer expects it to be compensation for damages, the
employees really feel relieved. When an employee is hurt while doing their job duties due to an
accident or other unforeseen circumstances, the employer is held accountable. One could wonder
if a part-time employee would still be eligible for Act benefits. The answer is -Yes, the Act’s
benefits will continue to apply to the employer.
There are various prerequisites that must be met in order to qualify for Employees’
Compensation Act benefits:

You must work for the company or organization.

You must have been injured at the workplace or the job was as such that you have been
injured.[2]

Applicability of the Act

The Employees Compensation Act applies to the following entities are listed below:
• It applies to employees working in factories, mines, docks, construction establishments,
plantations, oilfields and other establishments listed in Schedule II of the Employee’s
Compensation Act.
• It applies to persons recruited for working abroad and who is employed outside India as
in Schedule II of the Act.
• It applies to a person recruited as the driver, helper, mechanic, cleaner or any other in
connection with a motor vehicle and to a captain or other member of the crew of an
aircraft.

• Also, the act does not apply to the members of armed forces of the Union & Workmen
who are covered under ESI (Employee State Insurance) Act.
 Employer’s Liabilities for Compensation
An employer is responsible for paying compensation to the employee under the following
circumstances are:
• Personal injury by accident- An employer is responsible for paying compensation to
workman if personal injury is let to him by accident arising out during his employment.
• Occupational diseases- workers employed in certain occupations are exposed to certain
diseases which are inherent in that occupation.
An employer who is not liable for paying compensation to workers under the following
conditions:
• In case of any injury which does not result in the partial or total disablement of the
workers for a period exceeding three days.
• In case of any injury, not resulting in death or permanent total disablement, caused by an
accident which is directly attributable to the following:
i. the workman present at the time thereof under the influence of drink or drugs.
ii. the intentional disobedience of the workman to an order expressly given, or to a rule
framed, to secure the safety of workers,

iii. the willful removal or disregard by the workman of any safety guard or other devices
which he knew to have been provided for securing the safety of workers.

Determination of Compensation
According to the provisions of this Act, the amount of compensation depends upon the nature of
the injury, average monthly wages and age of the workers and the same are tabulated below:

Cases - Amount of Compensation

In case of injury resulting in Death - Amount equal to 50% of the monthly salaries of the
deceased employee multiplied by the appropriate factor or with the amount of 80,000 or more.
In case of injury resulting in permanent total disablement - Amount equal to 60% of the
monthly wages of the injured workmen multiplied by the relevant factor or an amount of 90,000
or more.

In case of an injury occurring in permanent partial disablement -

In case of an injury mentioned in part-II of schedule I, such percentage of the compensation
which will be payable in the case of permanent total disablement as is defined as being the
percentage of the lack of earning capacity caused by that injury.
In case of an injury not mentioned in schedule I, such percentage of the compensation payable
for permanent total disablement as is proportionate to the lack of earning capacity (as examined
by the medical practitioner) permanently caused by the injury.
In case of injury resulting in temporary disablement - Half-monthly payment which is
equal to 25% of the monthly salaries of the workmen, to be paid by the provisions of section
4(2).

Doctrine of added peril

The employer is not responsible for covering the costs of injuries when an employee performs a
task that is outside the scope of his or her job and poses additional risks. Devidayal Ralyaram v.
Secretary of State is the matter at hand. The notion of additional risk was found to have been
employed as a defence, and the employer was not held responsible for the compensation.
The adjudication is done by the commissioner in calculation of the amount of compensation.The
quantum of compensation is calculated from the date of the accident.

Self-inflicted Injury
A self-inflicted injury is one that a worker inflicts on themselves. Whether the injury was caused
on purpose or by accident, the employer is not held responsible. There are certain professions
that carry a higher risk of self-inflicted injury, including:
• Law enforcement
• Medical employees
• Farmers

• Teachers
• Salespeople

Contributory negligence
Employees have an obligation to exercise reasonable care while doing their duties in order to
prevent mishaps and injuries. Employers are vicariously accountable for the negligence of their
workers, but in some situations, they are also entitled to request a payment or compensation from
the offending employee. Therefore, if both the employee and the employer were negligent, the
employer would be responsible for paying damages to the amount of his own fault rather than
that of the employee. As a result, since the employer won’t be held accountable for the
employee’s negligence, the amount of compensation may decrease.
According to the Act, benefits are only given to employees and their dependents if the accident-
related injuries include occupational disorders. The incident must have happened while
performing work-related duties. The Employees Compensation Act also applies to those working
as railway servants and in other positions as listed in Schedule 2. Schedule 2 covers those who
work in industries, mines, plantations, cars, construction, and several other hazardous
occupations. An employee’s life is lost or is in grave danger of being lost in a terrible accident.
In the event of a deadly accident, the employee may pass away or sustain serious injuries and
disabilities. Non-fatal accidents, on the other hand, are ones in which there is a low likelihood of
fatality. Non-fatal accidents could result in permanent disability or other types of personal
injuries for the worker or employee.

Accidents that result in the aforementioned contingencies in the act are covered by the
Employees Compensation Policy, whether they are deadly or not. Accidents that cause death,
permanent entire or partial disability, or fatal injuries are considered fatal accidents. If any of
these scenarios materialises, the company’s claim would be covered by the employees’
compensation policy. However, the covered eventualities might not materialise in the case of
non-fatal incidents.

Wilful disobedience of orders or safety devices, etc.

If the employee disobeys the order expressly given or denies to obey any rules. The rules are
made for the safety of the workmen but if they disobey the accident might happen. The accident
can take place if the employee wilfully disregards the safety guards or any other device. If the
employee knew that he has been provided safety for the purpose of securing employees and still
disregards it is said to be done wilfully.[3]

Notional extension of Employer’s Premises

According to the Employees Compensation Act, benefits are due for a person’s disability or
death when there is a causal link between the accident and the workplace where the employee is
employed. This is the workplace’s Doctrine of Notional Extension.

Compensation under Agreement

An employee’s payment for services rendered to a corporation as an employee is guaranteed by a
compensation agreement. A compensation agreement guarantees that a person will be paid for
the services they render to a company while working as an employee.
If an employee has filed a lawsuit for damages in a civil court about any injury against any
employer, the employee cannot grant any right to compensation in relation to the accident. An
employee may not file a lawsuit in a court of law for damages. The Act was primarily created for
the benefit of the workers so that they might receive reimbursement from the employers for any
costs associated with an accident-related injury. The act is subject to the fundamental principle of
vicarious liability. Employees are servants to their employers, who are their master. Only when
an injury occurs during the course of employment and at work does the employee receive
compensation.

Half-Monthly Payment
Half-Monthly payment will be reviewed by Commissioner on the application by the Employer or
employee. A certificate of qualified medical practitioner needs to accompany the application that
there has been changed in the condition of the employee. On review, Half-Monthly payment may
be extended, decreased, continued or ended or converted into lump-sum under Employees
Compensation Act, 1923.

Registration of Agreements
The amount payable as compensation can be settled in the manner of agreement, the employer
should send a memorandum to the Commissioner. The commissioner will verify and record the
memorandum in a registered manner if satisfied.
In case if the agreement has been obtained by fraud or undue influence or another improper
manner in such cases, the commissioner will refuse to record the agreement.

Procedure to Claim the Compensation

The process for filing claims is explained here.

• The applicant has to give notice of accident to the employer or by entering in the notice
book within an appropriate period.
• Every notice submitted should be with the name and address of the person injured and
also by including the cause of the injury and the date on which the accident occurred.
• Then submit the claim application to the commissioner within two years from the date of
the accident.

• In the event of an occupational disease, the accident is deemed to have occurred on the
first day of illness.
• In case of any defect if any in the notice or not giving notice or delayed application will
not reject the claim for compensation.

Due and Penalty for Non-Payment

The employer becomes responsible for paying the compensation immediately when the personal
injury occurs to the employee by accident during the work.

The amount of compensation paid will be calculated from the date of the accident happened.
If the amount is not paid within a month from the date of the accident, the Commissioner will
ask the employer to pay simple interest at the rate of 12% per annum or as prevailing in any
scheduled bank along with the compensation amount.
Moreover, if there is no justification for the delay, the Commissioner will demand an apology
from the employer after giving a reasonable opportunity of being heard, direct the employer to
pay a further sum not exceeding 50% of the compensation, through penalty. The amount of
penalty and also interest should be paid to the workman or his dependent in the following cases:

The half-monthly instalments of compensation (payable in case of temporary disablement)

should be paid within the time specified. The half-monthly instalments can be converted into a
lump sum payment, by an agreement between the employer and the employee or by applying to
the Commissioner.

End notes:
[1] THE WORKMAN COMPENSATION ACT: 1923
[2] THE WORKMAN COMPENSATION ACT: 1923
[3] https://www.coursehero.com/file/p672s37/Wilful-disobedience-of-orders-or-safety-devices-
etc-Chaitram-v-Steel-Authority/

References:
https://upscalelegal.com/employers-liability-for-compensation/
https://www.indiafilings.com/learn/employees-compensation-
act/#:~:text=Employer's%20Liabilities%20for%20Compensation,arising%20out%20during%20h
is%20employment.