Employees Compensation Act,
2009
OBJECTIVES
• The Workmen's Compensation Act, 1923 is one of the important social
security legislations. It aims at providing financial protection to workmen
and their dependants in case of accidental injury by means of payment of
compensation by the employers.
DISABLEMENT
• Disablement means any loss of capacity to work or move
• May result in loss or reduction of his earning capacity
• Disablement may be
- Total {sec.2.1(g)}
- Partial {sec 2.1(l)}
- Temporary
- permanent
Types of Disablements
• Disablement, is said to be TOTAL when if Incapacitates a worker for all
work he was capable of doing at the time of the accident resulting in such
disablement.
• "Total disablement" is considered to be permanent if a workman, as a
result of an accident, suffers from the injury specified in Part I of Schedule I
or suffers from such combination of injuries specified in Part l of Schedule I
as would be the loss of earning capacity when totaled to one hundred per
cent .
Types of Disablements
• Disablement is said to be permanent partial when it reduces for all times,
the earning capacity of a workman in every employment which he was
capable of undertaking at the time of the accident. Every injury specified in
Part II of Schedule I is deemed to result in permanent partial disablement.
• Where the disablement is of a temporary nature and reduces the earning
capacity of a workman in the employment in which he was engaged at the
time of the accident it is "temporary partial disablement.
EMPLOYER’S LIABILITY
To compensate any employee:
• Who has suffered an accident arising out of and in the course of his
employment, resulting into:
(i) death,
(ii) permanent total disablement,
(iii) permanent partial disablement,
(iv) temporary disablement whether total or partial, or
• who has contracted an occupational disease.
HOWEVER THE EMPLOYER SHALL NOT BE LIABLE
• In respect of any injury which does not result in the total or partial disablement of
the workmen for a period exceeding three days;
• In respect of any injury not resulting in death, caused by an accident which is
directly attributable to-
• the workmen having been at the time thereof under the influence of drugs, or
• the willful disobedience of the workman to an order expressly given, or to a
rule expressly framed, for the purpose of securing the safety of workmen, or
• the willful removal or disregard by the workmen of any safeguard or other device
which he knew to have been provided for the purpose of securing the safety of
workmen.
• The burden of proving intentional disobedience on the part of the employee shall
lie upon the employer.
• when the employee has contacted a disease which is not directly attributable to a
specific injury caused by the accident or to the occupation; or
• When the employee has filed a suit for damages against the employer or any other
person, in a Civil Court.
Condition for receiving compensation for
Personal Injury
• The three tests for determining whether an accident arose
out of employment are :
• At the time of injury workman must have been engaged in the
business of the employer and must not be doing something for
his personal benefit;
• That accident occurred at the place where he was performing his
duties; and
• Injury must have resulted from some risk incidental to the duties
of the service, or inherent in the nature or condition of
employment.
AMOUNT OF COMPENSATION{sec.4}
• The amount of compensation payable to a workman depends
on
– the nature of injury caused by accident
– the monthly wages of the workman concerned and the relevant factor
– the Relevant Factor is specified in schedule IV for working out the lump
sum amount of compensation
• THERE IS NO DISTINCTION BETWEEN AN ADULT AND A MINOR
WORKER WITH RESPECT TO THE AMOUNT OF COMPENSATION
COMPENSATION FOR DEATH
• In case of death resulting from injury, the amount of
compensation shall be equal 50% of the monthly wages
of the deceased workman multiplied by
the relevant factor.
• Or an amount of Rs 1,20,000/- whichever is more.
Example:
• A workman is employed in a factory on a monthly wage of Rs 3000. While
working he met with an accident and dies on Oct 2000. His date of birth is
July 18 , 1970. The amount of compensation payable to his dependent
would be
50* monthly wages* Relevant factor of age 30
100
0r 1,20,000 whichever is higher
50* 3000* 207.98 = 3,11,970
100
Since Rs 311970 is more than 1,20,000 the compensation payable to him shall
be Rs 311,970
COMPENSATION FOR PERMANENT
TOTAL DISABLEMENT
• In case of permanent total disablement resulting from the
injury, the amount of compensation shall be 60% of the
monthly wages of the injured workman multiplied by the
relevant factor or Rs 1,40,000/- thousand whichever is
more.
COMPENSATION FOR PERMANENT PARTIAL
DISABLEMENT
• Where permanent partial disablement occurs, the amount of
compensation payable shall be as follows:
– In case of an injury specified in part II of the schedule I, the amount of
compensation shall be such percentage of the compensation which
would have been payable for the percentage of loss of earning capacity
caused by that injury.
– In case of an injury not specified in schedule I, such percentage of the
compensation is payable which is proportionate to the loss of earning
capacity (as assessed by a qualified medical practitioner) permanently
caused by the injury.
COMPENSATION FOR TEMPORARY DISABLEMENT
(TOTAL OR PARTIAL)
• If the temporary disablement, whether total or partial results from
the injury, the amount of compensation shall be a half monthly
payment of the sum equivalent to 25% of the monthly wages of the
workman to be paid in accordance with the provisions.
• The half monthly payment shall be payable on the sixteenth day
from the date of disablement
• In cases where such disablement lasts for a period of 28 days or
more compensation is payable from the date of disablement
• In other cases After the expiry of a waiting period of three days from
the date of disablement.
Amendments
• THE WORKMEN'S COMPENSATION (AMENDMENT) ACT, 2009 is now renamed as THE
EMPLOYEE'S COMPENSATION (AMENDMENT) ACT, 2009 and wherever "workman" or
"workmen" is mentioned in the entire Act the same needs to be read as "Employee“
• The compensation payable on death from the injury, is (i) minimum of Rs.80000 is increased
to Rs.120000 or (ii) 50% of the monthly wages of deceased multiplied by the relevant factor.
• The compensation payable on Permanent Total Disablement from the injury, is (i) minimum of
Rs.90000 is increased to Rs.140000 or (ii) 60% of the monthly wages of deceased multiplied
by the relevant factor.
• Definition of wages remains unaltered.
• Revised monthly wage ceiling limit of 50% of Rs.4000 increased to Rs.8000-Employees
Compensation Act for maximum compensation calculation.