Employees’ Compensation Act, 1923

Main features of the Act

The “Employees Compensation Act, 1923” is an Act to provide payment in the form of compensation by the employers to the employees for any injuries they have suffered during an accident. Earlier this Act was known as the Workmen Compensation Act, 1923.

Applicability

It extends to whole of India and applicable to-

Employees working in factories, mines, docks, construction establishments, plantations, oilfields and other establishments listed in Schedule II of the

Employee’s Compensation Act. Persons recruited for working abroad and who is employed outside India as in Schedule II of the Act.

Person recruited as the driver, helper, mechanic, cleaner or any other in connection with a motor vehicle and to a captain or other member of the crew of an aircraft.

Employees working in abroad recruited by companies registered in India.

Exception

The act does not apply to the members of armed forces of the Union & Workmen who are covered under ESI (Employee State Insurance) Act.

Objectives

To impose statutory liability on employer for injuries suffered by workman and employees out of and in the course of employment.

Employers liability to pay compensation.

Personal injury by accident- An employer is responsible for paying compensation to workman if personal injury is let to him by accident arising out during his employment.

Occupational diseases- workers employed in certain occupations are exposed to certain diseases which are inherent in that occupation.

Conditions when the employer is not liable to pay compensation-

If the injury does not end in the entire or partial disablement of the employee for a period exceeding three days.

If the injury, not leading in death or permanent total disablement, is caused by an accident which is directly attributable to:

The employee having at the time of the accident is under the influence of drink or drugs;

The wilful disobedience of the employee to an order if the rule is expressly given or expressly framed, for the purpose of securing the safety of employees; or

The wilful removal or disregard by the employee of any safety guard or other device which has been provided for the purpose of securing the safety of employees.

Amount of Compensation-

Where death results from the injury an amount equal to 50% of the monthly wages of the deceased employee multiplied by the relevant factor or an amount of Rs 1,20,000/- whichever is more.

Where permanent total disablement results from the injury an amount equal to 60% of the monthly wages of the injured employee multiplied by the relevant factor or Rs 1,20,000/- whichever is more.

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