EMPLOYEE’S COMPENSATION ACT, 1923

The formerly known ‘Workmen’s Compensation Act, 1923,’ is now known as ‘Employee’s Compensation Act, 1923, and is an important enactment as it introduced a kind of social security scheme for the workers of this country. It enables an employee in the case of injury and his dependents in the case of his death, to claim the compensation at the cost of his employer organisation for such employment injury/ death.

APPLICABILITY

The Act applies to every employer:

                      i.        Which includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer; AND

                     ii.        When the services of a employee are temporarily lent or let on hire to another person by the person with whom the employee has entered into a contract of service or apprenticeship, means such other person while the employee is working for him.

ELIGIBILITY OF EMPLOYEES

Every employee to whom a personal injury is caused by accident arising out of and in the course of employment, his employer shall be liable to pay compensation in accordance with the provisions of Chapter II to the act.

BENEFITS UNDER THE ACT

Amount of compensation shall be payable by the employer:

a.    Where death results from injury 50% of monthly wages X relevant factor or Rs. 1,20,000 whichever is more. (relevant factor depends upon the age of employee)

b.    Where permanent total disablement results from the injury 60% of monthly wages X relevant factor or Rs. 1,40,000, whichever is more (relevant factor depends upon the age of an employee).

c.    Where permanent partial disablement or temporary disablement results from injury as per prescribed schedule.

d.    Where temporary disablement, total or partial, results from injury, a half monthly payment equivalent to 25% of monthly wage of workman.

e.    The funeral expenses have been increased to Rs. 5,000/-.

OTHER IMPORTANT ISSUES

a.    Any contract by an employee waiving his right to be compensated under this Act is null and void.

b.    The intention of the Legislature and the circumstances under which law was enacted is to be seen. It is interpreted in favour of the weak.

c.    Notice book is to be maintained. A statement, report return is to be filed when applicable.

PENALTIES FOR NON-COMPLIANCE

Compensation should be paid early — delay beyond 1 month, attract interest @6% p.a. and penalty of up to 50% of the compensation. Certain other offences attract fine up to Rs. 500.

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