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The Employees (Workmen’s) Compensation Act 1923 – All Questions

THE WORKMEN'S COMPENSATION ACT, 1923. AMENDMENT ACT- 2000 now changed as EMPLOYEES COMPENSATION ACT 1923. (RBE 61/2011 dated 11-05-2011) “Workman” is substituted by " Employee" .

Employees Compensation act - Summary At Glance

Click on + to See The Answers 

Recent Amendment in Employees Compensation Act
  • The main amendments introduced by the Act are:
    • The employer needs to inform an employee of his rights to compensation under the Act in writing as well as through electronic means. Failure to do so will make the employer liable to penalty. Penalties
    • Penalties have been increased from a maximum of Rs. 5000 to a definite penalty of Rs. 50,000 which may extend to Rs. 1 lakh…. The minimum amount involved in a dispute for which an appeal may be filed with the High Court has been increased from Rs. 300 to Rs. 10,000, or such higher amount as the Central Government may, by notification, specify….
    • Appeals can be made against orders related to compensation, distribution of compensation, award of penalty or interest, etc. only if the amount in dispute is at least three hundred rupees….
    • Under the original Act, if an employer has appealed against a Commissioner’s order, any payments towards the employee can be temporarily withheld.  The Commissioner may do so only by an order of the High Court, until the matter is disposed of by the …
Object & Applicability of the Employees Compensation Act.

Need of the Act :- 

  • Growing Technology & Technical Complexity of Industry
  • Use of Machinery & Dangerous Equipments
  • Illiterate Employees

Object of the Act :- 

  • Compensation to the Workman Against Injury
  • Protection of the Workman From Any Psychical & Financial Uncertainty.
  • This Act Impose Liability on Employer to Compensate.
  • Quick Disposal of the Disputed Relating to Compensation.
  • Compensation by Medical Treatment As well as Loss of Earning Capacity.
  • Compensation to Himself or Dependants in Case of  Permanent Disablement.

Applicability of the Act :- 

  • Enacted on :- 5th March 1923
  • Extend to Whole of India including Jammu & Kashmir.
  • Applies to Hazardous Occupations , Factory , Mines , Transport , Construction, Railways, Plantations, Ships & Other As Specified by the Govt in the Schedule.

Non Applicability 

  • This Act Does not Apply to Where ESIC 1948 has Applicable.
  • Not Applicable to Armed Forces
Explain Disablements & Its Types
  • DISABLEMENT: Disablement means loss of capacity to work or perform. In case of a workman, loss of capacity results into reduction in earning capacity. The compensation is, accordingly, given to a workman to compensate his loss of earning capacity. The act recognizes two types of disablement.
  • Two types of disablement.
    • • 1. Partial Disablement
    • • 2. Total Disablement•
      • 1. Partial Disablement:As per the section 2(g)
    • “ Partial Disablement” means:
      • (a) Where the disablement is of temporary nature, such disablement as reduced the earning capacity of a workman in employment in which he was engaged at the time of the accident resulting in the disablement, 
      • b) Where the disablement is of a permanent nature, such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time. Partial disablement provided that every injury specified in part II of schedule I shall be deemed to result in permanent partial disablement.• 
    • “Total Disablement :- Total Disablement means such disablement as incapacitates a workman for all work which he / she was capable of doing at the same time when the Accident Occurred.
      • In Order to Turn the Injury into Total Disablement – The result of the Injury Must  in such a character that the Person who is unable to do any work.
  • 2. Occupational Diseases: Section 3(2) provides that if a workman employed in any employment is engaged in an occupational, where he is exposed to certain specified diseases, inherent to the said occupational, the employer shall be liable to pay compensation.  

Difference Point Between Total & Partial Disablement 

It will be measured on  Reduction in Earning Capacity – in Total Disablement He will Reduce 100% working Capacity while in Partial Disablement Less Than 100% will Reduce. 

It Will Include :- 

  • Physical In Capacity 
  • Moral Incapacity 
  • Intellectual Strength 
  • Phycological In Capacity         

1. Personal Injury Caused by Accident:

section 3(1) provides that if personal injury is caused to a workman by accident arising out of and on the course of his employment his employer shall be liable to pay compensation. Thus, the following conditions need to be fulfilled to render an employer liable to pay compensation: –

(a) The workman should have been caused personal injury,

(b) Such personal injury should have been caused by an accident, and

(c) The accident should have taken place out of and in the course of employment.

Amount of Compensation Under Workmen's Compensation Act.

When is the Workers entitled to Compensation ? 

  • Compensation in Case of
    • Death 
    • Permanent Total Disablement 
    • Permanent Partial Disablement 
    • Temporary Disablement 
    • Occupational Diseases. 

When is the Workers Not entitled to Compensation ? 

  • Not Entitled In case 
    • Injury / Accident Occurs in War 
    • Employee has Chosen Not to Wear Safety (Refused/Ignore)
    • Under the Influence of Drugs / Alcohol 
    • Injury does not Lasting More than 3 Months. 

Compensation Chart 

Cause  Higher Amount From Both Amount
  Amount 1  Amount 2
Death  Rs. 140000 60% of Monthly Wage * Relevant Factor 
Permanent  Total Disability  Rs. 120000 50% of Monthly Wage*Relevant Factor 
Permanent Partial Disablement Estimated Pro Rate   
Partial Disability (Lasting More than 3 days )  25% of Monthly Wage   

Relevant Factor

It is Specified in Schedule VI of the Act. For the Calculation of Amount of Compensation 

Where the Monthly Wages of An Employee exceeds To Rs. 8000/- (Older 4000) 

Formula For Monthly Wages  = Total Wages * Working  Months /12 

Maximum 8000*Relavant Factor = Compensation

Time & Mode of Payment 

Liable to Pay As Soon As Possible. 

If Not Paid withing reasonable Tiime :- Commissioner May after giving Reasonable Opportunity  of Being Heard , Direct the Employer to Pay Simple Interest @ 12% P.a. 

The AMOUNT  of Compensation will Not Pay Directly to the Workers But with Duly signed Statement By Commissioner. In Case of Death – Payable to Dependant. 

In Default of the Payment of Compensation Further 6% Penalty on Compensation Amount Will be Applicable.(Not Exceed  50% of Total Amount)  It Was held in the Case of  Jayanti Lal & Co. V. Garesia Rajvirba, (1992) 


Claim Procedure Under The Act

Claim Procedure Under the Employees Compensation Act – 1923 

  • Notice of Accident 
    • Inform the Commissioner  About the Accident. 
  • Filling of Claims 
    • No Claims Considered if Notice has not been served. 
      • Exception to Notice 
        • In case of Death
        • Employer has not Knowledge about Accident 
        • Give Sufficient Reason For Not Giving Notice
  • Medical Examination 
    • Examination By Qualified Medical Practitioner. 
  • Return of Compensation Every Year 
    • Return Includes 
      • Total No. of Injury / Accident 
      • Total Amount of Compensation Received 
      • As per the Specified by Government. 
  • Appeal 
    • Appeal Can be Allow in High court Against Order of Commissioner. 

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