Employees’ Compensation Act, 1923 – Topic-wise Notes
1. General Background
Enacted in 1923, enforced from 1 July 1924.
Original name: Workmen’s Compensation Act, 1923.
Renamed as Employees’ Compensation Act, 2009 (effective 18
Jan 2010).
Applies to whole of India (except Armed Forces).
2. Key Definitions
Employee → includes railway servants, crew of ship/aircraft,
drivers, etc. (Schedule II).
Minor → person below 18 years.
Wages → includes privileges in money, allowances, bonus under
contract; excludes employer’s PF contribution.
Dependent → widow, widowed mother, minor child, widowed
daughter-in-law, child of predeceased son, paternal grandparents (if
no parent alive), etc.
Partial Disablement → reduces earning capacity.
Total Disablement → incapacity to do any work he was capable of
before accident.
3. Employer’s Liability (Sec. 3)
Employer liable if accident arises out of and in course of
employment.
Not liable if:
o Disablement < 3 days.
o Injury due to employee’s intoxication, wilful
disobedience of safety rules, or wilful removal of safety
guards.
Occupational diseases (Schedule III) deemed as accidents.
Contracting out (Sec. 17) is void.
4. Compensation (Sec. 4 & 4A)
Compensation Amounts
Death → 50% of monthly wages × factor (Schedule IV) OR
₹1,20,000 (whichever higher).
Permanent Total Disablement (PTD) → 60% of monthly wages ×
factor OR ₹1,40,000 (whichever higher).
Permanent Partial Disablement (PPD) → % of PTD
compensation (as per Schedule I).
Temporary Disablement (TTD) → Half-monthly payment @ 25%
of wages.
Wage Ceiling
For calculation → ₹15,000/month (as per 2020 notification).
Interest & Penalty
Delay → 12% interest + penalty up to 50% of compensation.
5. Procedure
Notice of accident → immediately (Sec. 10).
Claim must be filed within 2 years.
Agreements must be registered with Commissioner (Sec. 28).
Compensation is non-assignable and non-attachable (Sec. 9).
Compensation has first charge on employer’s assets (Sec. 14A).
6. Commissioners (Chapter III)
Appointed under Sec. 20.
Powers = those of a Civil Court.
Venue of proceedings (Sec. 21): where accident occurred / employee
resides / employer has business.
Must dispose cases within 6 months (Sec. 25A).
Appeals → High Court within 60 days, only on substantial question
of law (Sec. 30).
7. Special Provisions
Sec. 15 → Masters & Seamen.
Sec. 15A → Aircraft crew.
Sec. 15B → Employees abroad.
8. Penalties & Amendments
2017 Amendment → Sec. 17A: Employer must inform employees
of their rights (in English/Hindi/local language).
Penalty for failure → ₹50,000–₹1,00,000.
General penalty (Sec. 18A) → fine up to ₹5,000.
9. Schedules
Schedule I → List of injuries & % loss of earning capacity.
Schedule II → Classes of employees covered.
Schedule III → Occupational diseases.
Schedule IV → Factors for calculating lump sum.
10. Examples of % Loss (Schedule I)
Loss of both hands → 100%.
Loss of thumb → 30%.
Loss of one eye → 40%.
Amputation at hip → 90%.
Absolute deafness → 100%.
Tip of thumb (no bone loss) → 10%.