Workmen’s Compensation Act, 1923.

Act does not apply where workman covered under ESI Act – Since a workman is entitled to get compensation from ESIC, a workman covered under ESI Act is not entitled to get compensation under Workmen’s Compensation Act, as per section 53 of ESIC.

However, Act is applicable to factories, mines, plantations, transport establishments, construction work etc. (who are not covered under ESI Act).

Employer’s liability for compensation – An employer is liable to pay compensation if personal injury is caused to a workman by accident arising out of and in the course of his employment. [section 3(1)]. An employer is not liable in following cases –

• Injury which does not result in total or partial disablement of workman for a period exceeding 3 days
• Injury caused by an accident directly attributable to * workman under influence of drinks or drugs * wilful disobedience of express orders for safety * wilful removal of safety guard or device. [Even if such case, if the workman dies or suffers permanent total disablement, the employer will be liable].

EMPLOYMENT DISEASE – Employer is liable if a workman contracts any specified occupational disease, while he is in service of employer for at least 6 months. [section 3(2)].

EMPLOYER’S FAULT IS IMMATERIAL – The compensation is payable even when there was no fault of employer. In New India Assurance Co. Ltd. v. Pennamna Kuriern – (1995) 84 Comp. Cas. 251 (Ker HC DB), claim of workmen for compensation under Motor Vehicle Act was rejected due to negligence of employee, but compensation was awarded under Workmen’s Compensation Act on the principle of ‘no fault’.

COMPENSATION PAYABLE EVEN IF WORKMAN WAS CARELESS – Compensation is payable even if it is found that the employee did not take proper precautions. An employee is not entitled to get compensation only if (a) he was drunk or had taken drugs (b) he wilfully disobeyed orders in respect of safety (c) he wilfully removed safety guards of machines. However, compensation cannot be denied on the ground that workman was negligent or careless. – Mar Themotheous v. Santosh Raj 2001 LLR 164 (Ker HC DB).

NUMBER OF WORKMEN EMPLOYED IS NOT CRITERIA – In definition of ‘workman’ in schedule II, in most of the cases, number of workmen employed is not the criteria. In most of cases, employer will be liable even if just one workman is employed. – – The Act applies to a workshop even if it employs less than 20 workmen and is not a ‘factory’ under Factories Act. – Sunil Industries v. Ram Chander 2000 AIR SCW 4109 = 2001 LLR 64 = 2000(7) SCALE 415.

Workman under the Act – ‘Workman’ means * railway servant * crew of ship * Crew of aircraft * Driver, cleaner, helper or mechanic of motor vehicle * Person recruited abroad * Employed in capacity specified in Schedule II.

The Schedule II covers many activities like manufacturing process, explosives, mine, ship, loading/unloading, construction, electricity generation and distribution, drivers, horticulture, circus etc. – – Cultivation of land, fishing, rearing of live stock is covered if more than 25 persons are employed. – – Persons employed outside are also covered. However, persons employed in clerical capacity are excluded.

Compensation payable under the Act – Mode of computation of compensation is given in section 4 of the Act. Compensation is payable to workmen. It is payable to dependents of workman in case of death.

In case of death resulting from injury, minimum compensation is Rs. 80,000. Maximum compensation is an amount equal to 50% of monthly wages of deceased workman multiplied by factor depending on age (More the age, lower the compensation). If salary exceeds Rs 4,000, it will be considered as Rs 4,000 only for purpose of calculating the compensation. Maximum compensation is Rs. 4,57,080 if a person at the time of death was 16 years of age an. In addition, funeral expenses upto Rs 2,500 are payable. [section 4(3)].

In case of permanent total disablement, minimum compensation is Rs. 90,000. Maximum compensation is an amount equal to 60% of monthly wages of deceased workman multiplied by factor depending on age (More the age, lower the compensation). Maximum compensation payable is Rs. 5,48,496, if workman was 16 years of age at the time of accident. – – In case of permanent partial disablement, compensation is payable on basis of percentage of loss of earning capacity.

No compensation is payable if disablement is upto only three days.

PROTECTION TO COMPENSATION – The compensation paid under the Act is protected, i.e. it cannot be attached or assigned. [section 9].

Liability of Principal Employer – Principal Employer is liable to pay the amount of compensation for the injury suffered by workman employed through contractor, if the accident arises as a result of accident arising out of and during the course of employment. [section 12].

Payment of compensation only through Commissioner – A Commissioner for Workmen’s Compensation is appointed by Government. The compensation must be paid only through the Commissioner in case of death or total disablement. Any lump sum payment to workman under the Act must be made only through Commissioner. Direct payment to workman or his dependents is not recognised at all as compensation. However, in case of death, if employer has paid some compensation to dependent, that will be refunded to employer. [section 8(1)].

Expenditure made by employer for medical treatment of workman is not considered for purposes of the compensation.

Employees entitled – Every employee, including those employed through contractor, but excluding casual employees who is engaged for purpose of employer’s business is eligible. The Act does not cover employees employed in clerical capacity. However, workmen in manufacturing processes, mines, ships, construction, tractor or mechanical appliances in agriculture, circus etc. and also drivers, watchmen etc. are covered. The compensation is payable if accident arises out of and during the cause of employment, and such accident causes either death or disablement.

Injury arising out of and during the course of employment – The employee is eligible to get ‘disablement benefit’ only when the injury arises out of and during the course of employment. Similarly, a workman is entitled to get compensation only if accident is ‘arising out of and during the course of employment’.