The need for Workmen’s Compensation Act rose with the increase in use of machinery and tools in the industrial sector, the risk of getting injured or disease has also surged. Industries are getting more machine driven and even though less labour is required, workmen still have to bear the risk to work alongside such huge and complicated machines and tools. Hence, they have to be protected from dangers prevailing with the use of machines.
This issue was discussed in the early 1900s as multiple cases of work accidents were coming up due to the ignorance and negligence of employers and unhygienic working conditions in the work place. A detailed study was conducted regarding the same issue by the Government of India in July 1921 and the momentary thoughts on the issue were published for the Local governments. This proposal was further approved and accepted by majority of the local governments and by employers and worker associations. Thus, the government of India was of the opinion that people will be supportive of this legislation.
In June 1922, there were recommendations and discussions made and the Government of India got positive reviews for the legislation and thus, the recommendations were jotted down and the Bill was introduced in the legislature. The Workmen’s Compensation Bill was passed and received its assent on March 15th 1923 and became applicable on July 1st 1924. The Workmen’s Compensation Act 1923 is one of the initial labour welfare and social security legislation passed in India before its independence.
The Act recognizes the rights of any such workman who has been a victim of accident or any occupational disease within the course of his employment and in this kind of situation, the employer should compensate the victim for his injury or disease accordingly. But the Act doesn’t apply on those workers who are insured under the Employees State Insurance Act 1948. Section 53 of the Employees’ State Insurance Act states that an insured person is not eligible to receive or recover any damages or compensation under the Workmen’s Compensation Act 1923 or any other law being in force with respect to such injury or damage caused during the course of employment as an employee.
Liability of employer to pay compensation
There are certain liabilities and obligations of an employer suggested under the Workmen’s Compensation Act 1923 with regard to payment of damages. Section 3 of the Act mentions for the circumstances where the employer is responsible for paying compensation to the employee or his/her family members in case of death or personal injury suffered by the workman. To hold an employer liable for such compensation, following conditions should be satisfied-
- The workman or employee should have sustained any personal injury or damage
- The personal injury or disease has to be directly caused by the accident
- The accident or injury should have arisen out of and in the course of employment
- The personal injury caused to the workman should have resulted in total or partial disablement of the workman for a period exceeding 3 days or it should have resulted in the death of the workman.
Although, the employer shall not be held responsible in the following cases. They are-
- The injury caused due to the accident doesn’t result in total or partial disablement of the workman for a period exceeding 3 days.
- Any such injury caused by the accident can be directly attributed to the workman under the influence of drinks or drugs or has indulged in willful disobedience of explicit orders for safety, willful removal of safety guard or device. But in this case, if the employee dies or suffers a permanent damage then the employer will be held liable for compensation.
Important provisions of Workmen’s Compensation Act
There are certain vital provisions of the Workmen’s Compensation Act 1923 which are specifically drafted for the benefit of the workman. Some of the important provisions of the Workmen’s Compensation Act are-
- Schedule III
This Schedule covers “occupational disease” suffered by the employee during the course of his employment. If an employee or workman contacts a disease that is mentioned as an “occupational disease” particularly in the specified profession or employment during the continuous period that is less than the period mentioned under part C of the Schedule 3 shall be known as “occupational disease”. The disease that has arisen out of and in the course of employment contracted due to the nature of the work shall be deemed as injury by accident within the meaning of this section.
Section 3(3) of the Act states that the Central government or the State government will give a notification in the Official Gazette specifying the diseases which shall be considered as occupational disease under the sub-section (2) of the Act.
Section 3(4) of the Act further clarifies that no damages will be paid by the employer unless and until it is proven that the disease or injury is caused in the course of employment and is directly related to the nature of employment.
- Section 4 (Amount of Compensation)
In case where the workman dies or death results, then an amount which is 50 percent of the monthly wages of the workman multiplied by a factor as mentioned in the Schedule 4 of the Act or Rs 80,000 whichever is more is paid to the family of workman.
In cases where the workman has sustained permanent or total disablement resulting from the accident or injury, then the amount is 60 percent of the monthly wages of the workman or Rs 90,000 whichever is more.
In cases where the person has been a victim or permanent yet partial disablement from the accident then the compensation provided is equal to disability or a 60 percent of the monthly wages or Rs 90,000 whichever is more.
- Section 5 (Method of calculating damages)
The usual basis for calculating the compensation of workmen is their monthly wage system. The case of Zubeda Bano v. Maharashtra Road Transport Corporation 1990 clearly mentions about the manner of calculating the wages.
Under this provision, when the employer is giving service to the employer during the continuous period of not less than 12 months before the accident occurred and if the employer is responsible for paying compensation, then the employee will be liable for 1/12th of the total wages. The employer shall be liable to pay for the compensation which is due for payment to employees in the last 12 months of that period.
- Section 11 (Medical Examination)
Whenever the employee or the workman brings forth the notice that he has met with an accident or an injury during the course of his employment before the expiry of 3 days, then he is entitled to be medically examined free of charge by a qualified skilled medical practitioner. If the employee refuses or refrains from submitting himself or herself for the examination, or tries to hinder the examination, then his right to damages from the employer shall be suspended.
If the employee willingly leaves without getting himself or herself medically examined in his workplace where he or she is employed, then also the compensation amount of the employee shall be suspended until the person returns and agrees to get medically examined.
- Section 13 (Remedies of employer against a stranger)
In certain cases, the employer is unable to pay the workman or employee and hence appoints someone else who will pay the victim and when the employee recovers the compensation amount, it creates a legal liability on the other person apart from the employer by whom the compensation was paid, stating that the other person is entitled for the same amount by the employer who was initially liable to pay the damages.
- Section 18-A (Penalties)
The penalties often arise when the person fails to maintain a book under Section 3 and Section 10 of the Act 1923. There are also penalties given if the person or employer fails to make a report that has to be send u/s 10B or fails to inform the employee about his rights to claim compensation under Section 17A.
Such a person shall be penalized with a fine not less than Rs 50,000 which can be further extended to Rs 1, 00,000.
- Section 25 (Manner of recording evidence)
The Commissioner usually writes a brief message (memorandum) of the evidence of every witness during the examination process. The memorandum has to be recorded in written form and has to be duly signed by the Commissioner. The signed part of the Commissioner will be looked closely and it should be in his handwriting and will also be a part of record.
- Section 25A (Time period for disposal of compensation cases)
The commissioner has the authority to dispose of the case regarding the compensation within a period of 3 months as given under the Act from the date of its reference. The commissioner is responsible for intimating his decision regarding the same within the given time frame to the victimized employee.
The Workman Compensation Act 1923, was one of the significant milestones achieved for the labour and workmen of India, as they were having no security, support or aids for such mishaps. The employers had no responsibility or accountability towards their employees and with this Act, the employers were made liable towards their employees and made to pay damages for the injury or disease or death caused to the labour or workmen during the course of employment.
This Act was more like an insurance for the employees who had sustained injuries by accidents at their workplaces. The Act safeguards the rights and dignity of the workmen as a whole. The main purpose of this Act was to provide compensation to the victimized workmen who have no means or meagre means to treat themselves in case of such workplace injuries or occupational diseases. The primary law functioning in this Act is of Vicarious Liability; as the employer plays the role of Master and employee the role of servant. As per this principle, any regular act assigned to him and done by the servant in the course of employment shall be considered to be done by the Master. Hence, the employee has full rights to seek for insurance in times of need or injury from the employer which he has sustained in the course of employment.
This article is authored by Rhea Banerjee.
Refer- Workmen’s Compensation Act 1923.