Workmens Compensation Act, 1923

Introduction

The principle of Workmens Compensation was formally adopted in India in 1923. The Workmens Compensation Act 1923 which is the first social security le!islation in India makes the employer lia"le to pay compensation for personal in#ury caused "y accident arisin! out of $ and in the course of employment. The Act has "een amended se%eral times since it came into force on &uly 1 192'. The theory of workmens compensation is that (the cost of product should "ear the "lood of the workmen.
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)mployers *ia"ility for Compensation

An employer is lia"le to pay compensation to a workman for a personal in#ury caused to him "y accident arisin! out of and in the course of his employment as well as for any occupational disease contracted "y him. An employer is not lia"le to pay compensation for personal in#ury caused to a workman "y accident arisin! out of and in the course of employment+ ,a- if the in#ury not resultin! in death is caused "y an accident which is directly attri"uta"le to+ i. the workman ha%in! "een at the time of accident under the influence of drink or dru!s. ii. the wilful diso"edience of the workman to an order e/pressly !i%en or to a rule e/pressly framed for the purpose of securin! safety of workmen. or iii. the wilful remo%al or disre!ard "y the workman of any safety !uard or other de%ice which he knew to ha%e "een pro%ided for the purpose of securin! the safety of workmen.
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Contd..

The e/ceptions mentioned a"o%e are not applica"le in case of a fatal accident. The reason is that where a workman has died as a result of personal in#ury it is e/tremely difficult for the dependants to re"ut e%idence that the accident was caused "y the deceaseds misconduct.

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Applica"ility

The Act e/tends to the whole of India and applies to any person who is employed otherwise than in a clerical capacity in railways factories mines plantations mechanically propelled %ehicles loadin! and unloadin! work on a ship construction maintenance and repairs of roads and "rid!es electricity !eneration cinemas catchin! or trainin! of wild elephants circus and other ha1ardous occupations and employments specified in schedule II to the Act.
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Contd..

3nder 4u"+section ,3- of 4ection 2 of the Act the state !o%ernments are empowered to e/tend the scope of the Act to any class of persons whose occupations are considered ha1ardous after !i%in! three months$ notice in the official !a1ette. The Act howe%er does not apply to mem"ers ser%in! in the Armed 5orces of Indian 3nion and employees co%ered under the pro%isions of the )4I Act 19'6 as disa"lement and dependants$ "enefit is a%aila"le under this Act.
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Contd8

In order to "e a 9workman: within the meanin! of 4ection 2 ,1- ,n- of the workmens compensation Act firstly a person should "e employed. secondly his employment should not "e of a casual nature thirdly he should "e employed for the purpose of the employers trade or "usiness and lastly the capacity in which he works should "e one set out in the list in 4chedule II of the Act.
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Arisin! out of and in the course of employment

The employer is lia"le to pay compensation only if personal in#ury is caused to a workman "y an accident arisin! out of and in the course of his employment. It is not enou!h that the in#ury arises in the course of employment. It must also arise out of employment. An accident arisin! out of an employment necessarily occurs in the course of the employment "ut an accident in the course of employment may not necessarily arise out of employment thou!h ordinarily it will.
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;ut of employment
An accident arisin! out of employment implies a causal connection "etween the in#ury and the accident and the work done in the course of employment. )mployment should "e the distincti%e and the pro/imate cause of the personal in#ury whether physical or mental. In <ennis =s. White it was laid down that (when a man runs a risk incidental to his employment and is there"y in#ured then the in#ury arises out of employment. In order to pro%e that in#ury arose (out of employment two conditions must "e fulfilled> ,1- In#ury must ha%e resulted from some risk incidental to the duties of the ser%ice or inherent in the nature or condition of employment and ,2- At the time of in#ury worker must ha%e "een en!a!ed in the "usiness of the employer and must not "e doin! somethin! for his personal ad%anta!e or "enefit. 9

In the course of employment

It refers to the time durin! which employment continues. It co%ers the whole of the time a workman is carryin! out the duties re@uired of him as incidental to his contract of ser%ice. It includes not only the period when he is doin! the work actually allotted to him "ut also the time when he is at a place where he would not "e "ut for his employment. Aormally if the factory hours are from 9 a.m to 2 p.m the employment commences at 9 a.m. and ceases at 2 p.m. But to this !eneral rule there are certain e/ceptions which are>
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Contd..

,1- When a means of transport is pro%ided "y the employer for the purpose of !oin! to and from the place of work and workmen use that transport the time durin! which that transport is used "y the workmen is also included in the course of employment. ,2- When a workman is in the premises of the employer e%en thou!h he may not "e actually workin! at that time that time is included in the course of employment. 5or e/ample a railway employee was knocked down and killed "y a train while returnin! from duty "y crossin! the platform area. The accident arose out of and in the course of employment. ,3- When a period of rest is !ranted to a workman the course of employment includes the period of rest pro%ided the workman remains in the employers premises durin! the rest period. ,'- When a workman reaches the place of employment well in time to e@uip himself for the work he is in the course of employment.
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Theory of notional e/tension

Accordin! to this theory in certain circumstances an employer is lia"le for in#ury to his workman e%en when the workman is away from the premises at the time of accident. The theory was laid down "y supreme court in 4aurashtra 4alt Cf!. Co =s. Bai =alu Da#a. As a rule the employment of a workman does not commence until he has reached the place of employment and does not continue when he has left the place of employment. the #ourney to and from the place of work is thus e/cluded from the notion of employment. Eowe%er it is now well settled that this is su"#ect to the theory of notional e/tension of the employers premises so as to include in it an area which the workman passes and repasses in !oin! to and in lea%in! the actual place of work so that there may "e some reasona"le e/tension in "oth time and place of work and a workman may "e re!arded as in the course of his employment e%en thou!h he had not reached or had left the actual premises where he was employed. The facts and circumstances of each case will ha%e to "e e/amined carefully in order to determine whether the accident arose out of and in the course of employment of a workman keepin! in %iew at all times this theory of notional e/tension.
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;ccupational <iseases

Workers employed in certain occupations are e/posed to certain diseases which are inherent in those occupations. 5or e/ample a person en!a!ed in any process in%ol%in! use of lead tetraethyl is lia"le to contract poisonin! "y lead tetra+ethyl and a person employed as a tele!raph operator may contract tele!raphists cramp. All such diseases are known as occupational diseases. Contractin! of an occupational disease is deemed to "e an in#ury "y accident. In such a case unless the contrary is pro%ed the accident is deemed to ha%e arisen out of and in the course of employment. As such the employer is lia"le to pay compensation if the disease can "e directly attri"uta"le to a specific in#ury "y accident arisin! out of and in the course of employment. A detailed list of occupational diseases were mentioned in 4chedule III of the Act.
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Amount of compensation

The amount of compensation paya"le to a workman depends on+ ,i- the nature of the in#ury caused "y accident ,ii- the monthly wa!es of the workman concerned and ,iii- the rele%ant factor for workin! out lump+sum e@ui%alent of compensation amount as specified in 4chedule I= . There is no distinction "etween an adult and a minor worker with respect to the amount of compensation. The Act pro%ides compensation for F 1. death 2. permanent total disa"lement 3. permanent partial disa"lement '. temporary disa"lement whether total or partial.
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<isa"lement

Ceans loss of capacity to work or to mo%e. <isa"lement of a workman may result in loss or reduction of his earnin! capacity. In the latter case he is not a"le to earn as much as he used to earn "efore his disa"lement. Gartial disa"lement means any disa"lement as reduces the earnin! capacity of a workman as a result of some accident. Gartial disa"lement may "e temporary or permanent. Temporary partial disa"lement means any disa"lement as reduces the earnin! capacity of a workman in the employment in which he was en!a!ed at the time of accident which resulted in such disa"lement. Germanent partial disa"lement is one which reduces the earnin! capacity of a workman in e%ery employment which he was capa"le of undertakin! at the time of in#ury. The distinction "etween these two types of disa"lement depends on the fact as to whether an in#ury results in reduction of earnin! capacity in all the employments which the workman was capa"le of undertakin! or only in that particular employment in which he was en!a!ed at the time of in#ury.

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Total disa"lement

Ceans disa"lement whether of a temporary or permanent nature as incapacitates a workman for all work which he was capa"le of performin! at the time of the accident resultin! in such disa"lement. It refers to that condition where a workman "ecomes unfit for e%ery type of work and is not a"le to !et #o" anywhere due to that disa"lement. Total disa"lement is deemed to result from e%ery in#ury specified in Gart I of 4chedule I or from any com"ination of in#uries specified in Gart II thereof where the a!!re!ate percenta!e of the loss of earnin! capacity as specified in Gart II a!ainst those in#uries amounts to 1??H or more. Where an employee "ecomes unfit for a particular class of #o" "ut is fit for another class which is offered to him "y the employer the workman is entitled to claim compensation only on the "asis of partial disa"lement and not total disa"lement.
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Compensation for death

Where death results from an in#ury the amount of compensation shall "e e@ual to 0? percent of the monthly wa!es of the deceased workman multiplied "y the rele%ant factor ,as !i%en in column 2 of 4chedule I= for completed years of a!e on the last "irthday as !i%en in column 1- or an amount of Ds. 6? ??? whiche%er is more. The formula for calculatin! the amount of compensation in case of death resultin! from an in#ury will "e as follows> 0? / Conthly wa!es / Dele%ant 5actor IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII or Ds. 6? ??? whiche%er 1?? is more

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)/ample

A workman drawin! a monthly wa!e of Ds.2?? meets with an accident while workin! on a machine and dies on 12th Carch 2???. Ee was "orn on 1'th &uly 1920. The amount of compensation paya"le to him will "e determined as follows>

Completed years of a!e on 1'th &uly 1999J3' Dele%ant factor for a!e 3'J199.'? Amount of compensation J 0?H of Ds.2?? / 199.'? or Ds. 6? ??? whiche%er is more J 0? IIIIIIII/2?? / 199.'? J09 62? 1??
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Contd..

In order to claim compensation in case of death of a workman it is necessary for the claimants to pro%e that they were dependent on the deceased. A le!al representati%e who is not a dependent is not entitled to claim compensation for the death of the deceased under the act.

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Compensation for permanent total disa"lement

The amount of compensation in the case of total permanent disa"lement is an amount e@ual to 2? percent of the monthly wa!es of the in#ured workman multiplied "y the rele%ant factor or an amount of Ds.9? ??? whiche%er is more.

2? / Conthly wa!es / Dele%ant factor IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII or Ds. 9? ??? 1?? whiche%er is more 2?

Compensation for permanent partial disa"lement

A worker whose monthly wa!e is Ds. 0?? loses one hand as a result of in#ury caused to him on 1'th 4eptem"er 1999. ;n 1st Au!ust 1999 he had completed 3? years of a!e. Calculate the amount of compensation paya"le to him. As per schedule I the in#ury results in 2?H loss of earnin! capacity. The amount of compensation therefore will "e 2?H of the compensation paya"le in case of permanent total disa"lement. It shall "e calculated as follows> Dele%ant factor for a!e 3? is 2?7.96 2?/ Conthly wa!es / Dele%ant 5actor ++++++++++++++++++++++++++++++++++++++++++++++ 1?? 2?/0??/2?7.96 IIIIIIIIIIIIIIIIII J 2239'.?? > 2?H of 22 39'J37 '32.'? 21 1??

Gayment for funeral e/penses

If the in#ury of the workman results in his death the employer is also re@uired to deposit with the commissioner a sum of Ds. 2 0?? for payment to the eldest sur%i%in! dependant of the workman towards funeral e/penses of the deceased workman. If the workman did not ha%e a dependant the payment is to "e made to the person who actually incurred the e/penditure.
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Compensation in case of In#ury

The amount of compensation paya"le under the Act is "ased on the e/tent of the loss of earnin!s of in#ured workmen compensation for death and permanent disa"lement is to "e paid in lump sum whereas a half monthly payment is to "e made in case of temporary disa"lement.

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Contract of employment

In order to entitle a workman to claim compensation a contract of employment e/press or implied "etween the workman and the employer is necessary.

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Is the employer lia"le to pay compensation in the followin! cases

A workman whose "usiness was to repair railway clocks at %arious stations was sta""ed in a railway compartment while he was in transit. A workman suffered from heart disease and died on account of strain of work "y keepin! continuously standin! or walkin!. A workman sufferin! from malaria fe%er was compelled to undertake a lon! #ourney after only 3 days of his reco%ery. The #ourney in%ol%ed strain and resulted in the death of the workman. 20
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Answers

The death was due to an accident arisin! in the course of and out of his employment. The accident arose out of and in the course employment. The strain of #ourney was partly responsi"le for the death of the workman and thus the death arose out of and in the course of employment.

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Illustration
A watchman whose duty it was to !uard the property of the premises of a rest house had his @uarters within the premises of the rest house. Eis duty ended at 11 G.C. At 2.3? A.C. ,i.e. within 3+1K2 hours of the said 11 G.C- he was found murdered near his @uarters. <o you think the employer is lia"le to pay compensationL Mi%e reasons 27 for your answerL

Answer

Nes when a person is employed on a duty of this kind his actual employment does not cease within the specified hours of duty "ut he is in a way in constant employment since it can "y no means "e said that if a watchman detected a thief at a time he was not actually on duty he would not "e re@uired to resist and o"struct the thief and that it would "e no part of his duty to do so.
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Illustration

A workman under the influence of drink touched a li%e wire while workin! at a machine and instantaneously died. Eis widow claimed compensation "ut the employer took the plea that he was not lia"le as the accident arose out of a default "y the workman. <ecide the lia"ility of the employer

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Calculate the amount of compensation to "e paya"le in the case of death

A Workman drawin! a monthly wa!e of Ds.2??? meets with an accident while workin! on a machine and dies on 3?th &uly 2??0. Ee was "orn on 1'th ;cto"er 1929. Completed years of a!e on 1'th ;cto"er 2??0 J 30 years Dele%ant 5actor for a!e 30J 197.?2
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Calculate the amount of compensation to "e paya"le in the case of permanent total disa"lement

A Workman drawin! a monthly wa!e of Ds.3??? meets with an accident while workin! on a machine and dies on 3?th &uly 2??0. Ee was "orn on 1'th ;cto"er 1929. Completed years of a!e on 1'th ;cto"er 2??0 J 30 years Dele%ant 5actor for a!e 30J 197.?2
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Calculate the amount of compensation to "e paya"le in the case of permanent partial disa"lement

A worker whose monthly wa!e is Ds. 16?? loses one hand as a result of in#ury caused to him on 2?th &uly 2??2. ;n 1st Carch 2??2 he had completed 39 years of a!e. As per schedule I of Workmens compensation Act 1923 the in#ury results in 2?H loss of earnin! capacity. Dele%ant factor for a!e 39 years is 162.9?
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