Workmen's Compensation Act, 1923 (Download Free Notes)

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Author : Yogricha

October 22, 2024

Overview: This is for compensation to workers in case of injury, disability, or death due to accidents occurring during employment. It is significant for law students and candidates preparing for the All India Bar Examination (AIBE) due to its relevance in labour law, social justice, and employment disputes.

The Workmen’s Compensation Act of 1923 should be a key focus in legal education and professional exams.

In this blog, we will cover:

The Workmen's Compensation Act, 1923
Definition and Scope of the Workmen's Compensation Act, 1923
Compensation Amount Under the Workmen's Compensation Act, 1923

The Workmen's Compensation Act, 1923

Introduction: The Workmen's Compensation Act of 1923 ensured that employees received financial compensation in case they were injured or had an accident at work. Employees are the backbone of any organization, and employers must protect their workforce from financial loss in workplace accidents.

Before this act, laws like the 1884 Compensation Act and the Fatal Accidents Act of 1885 provided limited compensation, which was insufficient for the workers' needs. Recognizing the necessity for better protection, the Indian Parliament enacted the Workmen's Compensation Act in 1923.

Definition and Scope of the Workmen's Compensation Act, 1923

The Workmen's Compensation Act of 1923 aims to provide financial support to employees who face unfortunate incidents like accidents, injuries, incapacity, disfigurement, or death while performing their duties. It applies to:

Full-time, part-time, temporary, or casual employees.
Schedule II of the Act covers employees working in industries such as construction, mines, docks, factories, and others.

Specific workers protected under the act include:

Non-permanent Railways employees (outside administrative, sub-divisional, and district offices).
Captains and crew members of aircraft.
Workers employed abroad, as defined in Schedule II of the Act.
Drivers, mechanics, helpers, and others involved in vehicular work.

Organizations operating in these sectors with over ten employees must comply with the act's provisions.

Coverage Under the Workmen's Compensation Act, 1923

The compensation provided under the act depends on the employer's employee insurance policy. The coverage generally includes:

Injuries during work-related accidents.
Temporary disabilities resulting from workplace accidents.
Permanent disabilities, both partial and total.
Death caused by work-related accidents.
Diseases, injuries, or fatalities arising from work conditions.
Legal and medical expenses incurred by employees due to accidents.

Compensation Amount Under the Workmen's Compensation Act, 1923

As per Section 4 of the Act, the compensation amount depends on the nature of the injury:

Temporary disabilities: Employees are entitled to compensation up to 25% of their monthly wages.
Permanent total disabilities: Employees are entitled to 60% of their monthly wage or Rs. 1,20,000, whichever is higher.
Permanent partial disabilities: The amount is based on a percentage of the wage loss due to the injury, as outlined in Part II Schedule I of the Act.
Death: In case of death, the worker’s family receives 50% of the deceased’s monthly wage or Rs. 1,20,000, whichever is higher.

Note: Employees covered under the Employees' State Insurance Scheme (ESIC) cannot claim compensation under the Workmen's Compensation Act.

Important Updates to the Workmen's Compensation Act, 1923

Since its introduction, the act has seen two significant updates:

In 2010, the name of the law was changed to the Employee’s Compensation Act.
On January 3, 2020, the Ministry of Labour and Employment raised the wage amount for calculating compensation from Rs. 8,000 to Rs. 15,000.

Read Detailed Guide: AIBE Exam Pattern 2024

Features of the Workmen's Compensation Act, 1923

Employers are required to provide compensation to employees under the following conditions:

Workplace accidents or injuries: If an employee is injured while performing their duties.
Aggravation of a medical condition: If a pre-existing condition worsens due to a workplace accident.
Disability or death: If an employee becomes disabled or dies while performing their job.

Situations Where the Employer Is Not Liable to Pay Compensation

Employers are not obligated to pay compensation in the following cases:

The employee sustains injuries due to disregard for safety regulations.
The injury causes disablement for less than three days.
The injury occurred while the employee was under the influence of alcohol or drugs.

Check: Best AIBE Books

1. Genesis and Objective

The Workmen's Compensation Act of 1923 marked the beginning of social security in India.
It ensures employers compensate workers for injuries or deaths from accidents during employment.
It was implemented in 1924 and has undergone several amendments.

2. Scope and Coverage

The act applies across India and covers workers in hazardous industries such as railways, factories, mines, construction, etc., except for armed forces personnel and those covered under the Employees' State Insurance Act.
The state government can extend the act’s coverage to other hazardous occupations.

3. Definitions

Workman: A person employed for trade or business purposes but not in a casual capacity.
Dependents: Defined as close family members, such as spouses and children, who rely on the worker for support.

4. Distribution of Compensation

Compensation is provided for various types of disablement and death resulting from employment-related accidents.
In cases of death, compensation equals 50% of the monthly wages multiplied by a specific factor or Rs. 50,000, whichever is higher.
Permanent total disablement compensates 60% of monthly wages or Rs. 60,000, whichever is higher.
Temporary disablement entitles workers to 25% of their monthly wages.

Read Detailed Guide: AIBE XIX Eligibility Criteria 2024

5. Claims and Appeals

Workers or their dependents can claim compensation within two years of the incident.
The appeals process allows cases to be taken to the High Court under certain conditions, particularly involving substantial questions of law.

6. Administration

The act is administered by state-appointed Commissioners for Workmen's Compensation.
The commissioner’s role includes resolving disputes, reviewing claims, and ensuring timely payments.

7. Contracting Out

Any agreement that waives a worker’s right to compensation is considered null and void.

8. Important Case Law

Case law under the act addresses whether an accident arises out of employment, considering factors like the incident's time, place, and circumstances.
Important cases demonstrate how courts assess whether an injury or death occurred during employment or due to personal negligence.

9. Schedules

The act includes several schedules that define injuries, diseases, and factors for determining compensation.

10. Important Amendments

Changes have been made to reflect increased compensation rates, with a significant amendment in 2010 renaming the Employees' Compensation Act.

These Important Elements provide a comprehensive understanding of the Workmen's Compensation Act, 1923, which is essential for protecting workers' rights and ensuring their financial security in case of accidents.

1. Overview of the Workmen’s Compensation Act, 1923

The Workmen's Compensation Act of 1923 (later renamed the Employees’ Compensation Act of 1923) compensates employees for injuries or deaths caused by accidents during employment. It aims to ensure financial relief for workers or their dependents in case of injury, disability, or death arising from workplace accidents or occupational diseases.

2. Important Features

Compensation for Work-Related Injuries: The Act mandates that employers compensate workers for injuries or death due to accidents during employment. Compensation is also provided for occupational diseases arising from work conditions.
Scope: It applies to all employees except those covered by the Employees' State Insurance Act, 1948, and excludes armed forces members.
Doctrine of Added Peril: If an employee performs acts outside the scope of their duties or introduces unnecessary danger, the employer is not liable for compensation.

You can perform well in the AIBE exam if you have prepared thoroughly for all the topics in the AIBE Syllabus.

3. Doctrine of Notional Extension

The doctrine of notional extension expands the employer’s liability to situations where accidents occur outside the immediate workplace but still in connection with employment. It includes areas workers pass through on their way to or from work and injuries sustained during such travel or other employment-related tasks.

The doctrine asserts that compensation should be provided even when the worker was not at the exact place of employment or working hours as long as the accident was closely related to the employment.

4. Important Case Laws and Examples

State of Rajasthan v. Ram Prasad: The court ruled that a causal connection between the incident and the worker's employment must exist for compensation. For instance, an employee struck by lightning while working outdoors was entitled to compensation since the accident happened due to his employment duties.
Savitri Devi v. Bharti Filling Station: In this case, a driver who died while working for a tanker owner was ruled to have died due to work-related stress, making the employer liable for compensation.
Works Manager Carriage and Wagon Shop, E.I.R v. Mahabir: This case extended the scope of employment-related accidents to include travel between the workplace and nearby locations, with compensation provided for an employee injured by a train while travelling from work.

5. Liability and Exclusions

Employers are not liable if the employee's accident was due to their wilful disobedience or if the employee was under the influence of drugs or alcohol.
Self-inflicted injuries and incidents in which the employee voluntarily took on additional risk (added peril) also exempt the employer from liability.

6. Significance of the Notional Extension Doctrine

The doctrine plays a vital role in modern labour law by broadening the circumstances under which employers are liable for compensating workers. It provides a more flexible interpretation of what constitutes employment-related accidents, ensuring that workers receive compensation even when accidents occur outside the immediate workplace, as long as they are employment-related.

By adopting this doctrine, the Workmen’s Compensation Act offers more excellent protection to employees, particularly those in hazardous industries like mining, transportation, and construction, where risks are high both at the workplace and in travel to and from work.

Frequently Asked Questions (FAQs)

Q1. What should I consider while searching for a workmen's compensation insurance policy?

Ans: The most crucial factors include the extent of coverage, sum insured, optional covers, additional benefits, and the claim settlement process.

Q2. What is the process for claiming workmen’s compensation insurance?

Ans: Employees must inform the site inspector of the accident and submit the necessary documents to the insurance company. The process may vary depending on the insurer.

Q3. What documents are needed to file a claim?

Ans: Required documents include a completed and signed application form, medical bills, and compensation records. Relevant medical certificates must be submitted for accidents resulting in disability or death.

Q4. Who receives compensation when an employee dies at the workplace?

Ans: In the event of death, the deceased employee's dependents are entitled to receive the compensation.

Q5. Is it advisable to purchase a workmen’s compensation insurance policy online?

Ans: Yes, it is smart to compare policies online to evaluate the pros and cons of different providers before making a final decision.

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