There is no doubt that employees are an organisation’s pillars of success. Thus, it falls upon employers to ensure that their workforce receives proper financial compensation in case they meet with an unfortunate accident at the workplace.
Now, to ensure proper enforcement of this facility, several laws like the 1884 Compensation Act and the Fatal Act of 1885 were implemented. However, they were not enough to financially compensate workers in case they met with harm while performing their duties. Thus, the Indian Parliament passed the Workmen’s Compensation Act in 1923.
Applicability of the Act
- It applies to employees working in factories, mines, docks, construction establishments, plantations, oilfields and other establishments listed in Schedule II of the Employee’s Compensation Act.
- It applies to persons recruited for working abroad and who is employed outside India as in Schedule II of the Act.
- It applies to a 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.
- Also, the act does not apply to the members of armed forces of the Union & Workmen who are covered under ESI (Employee State Insurance) Act.
Workmen Compensation Act 1923 – Definition and Scope
The Workmen Compensation Act 1923 aims to provide financial compensation to employees in case they meet with an unfortunate accident while performing their duties.
All employees working full-time, part-time, temporarily or casually are liable to receive financial protection under this law. It comes into effect in case they secure injuries, incapacity, and disfigurement or die while performing their duties.
Front-line workers in the following industries are liable to protection under this law:
- Non-permanent employees of the Railways who do not fall under the sub-divisional, district or administrative offices.
- Captains and crew members on an aircraft.
- Labours employed abroad as per Schedule II of the Workmen Compensation Act 1923.
- Individuals working in construction sites, mines, docks, factories and specific places as per Schedule II of the above mentioned Act.
- Drivers, mechanics, helpers and any other person associated with working with vehicles.
Workmen's Compensation Act 1923 - Amount of compensation
According to Section 4 of the Workmen’s Compensation Act 1923, the amount of compensation workers are liable to receive is as follows:
- Temporary disabilities
For temporary disabilities, the Workmen’s Compensation Act 1923 provides financial compensation of up to 25% of the concerned employee’s monthly wages.
- Permanent total disabilities
In an unfortunate event when an employee suffers from permanent disablement, that individual has the right to receive 60% of his/her monthly wage or Rs.1,20,000, whichever is higher.
- Permanent partial disabilities
Injuries that fall under permanent partial disabilities are stated in Part II Schedule I of the Act. The payable corpus is a certain percentage of earnings loss by the employee due to his/her injury.
- Death
When an employee dies due to an accident at his/her workplace, their family is liable to receive 50% of the deceased’s monthly wages or Rs.1,20,000, whichever is higher.
Coverage receivable under the Workmen Compensation Act 1923
- Bodily or other injuries during an accident while on duty
- Temporary disablement
- Permanent disablement (complete or partial)
- Death due to an accident at work
- Injury, disease or death resulting from working conditions
- All legal or any other expenses incurred by an employee in the above circumstances
FAQs
When is the employer not liable to pay compensation?
- Employee suffers from an injury or accident by disregarding the safety norms.
- Injury resulting in partial or total disablement for less than three days.
- For accidents or injuries under the influence of alcohol or drugs.
Updates in the Workmen Compensation Act 1923?
Since its inception in 1923, there have been two major changes in the Workmen Compensation Act. They are as follows:
- In 2010, this law’s name was changed to Employee’s Compensation Act.
- On January 3, 2020, the Ministry of Labour and Employment raised the amount on which compensation was calculated as per the Act from Rs. 8,000 to Rs. 15,000.
Features of the Workmen Compensation Act 1923
Employers are under the obligation to provide financial compensation as per the Workmen Compensation Act 1923 in the following circumstances:
- An accident or injury occurs at the workplace while carrying out a task.
- If the applicant provides proof that the injury or accident that has occurred at the workplace is aggravating his/her medical condition.
- In case a worker becomes disabled or dies while on duty.
