Workmen
compensation Act
1921
Introduction:-
The Workmen’s Compensation Act of 1923 is a law in India that provides compensation
to workers for injuries or accidents arising out of and in the course of their
employment. It ensures financial support to employees or dependents cases of
workplace-related injuries, disability or death.
What does the Workmen’s Compensation Act
of 1923 cover?
The Workmen’s Compensation Act of 1923, also known by its short title,
Workmen’s Compensation Act 1923, as well as the Employees Compensation
Act, provides financial protection to workers who suffer from illness, injuries,
or accidents while performing their job, including:
Bodily injuries
Temporary disablement
Permanent partial disablementJump to Section
Permanent total disablement
The Act also offers compensation in the case of death resulting from a workplace
accident.
The Act establishes workmen’s compensation rules that apply to most of India’s
workers. Schedule I determines the compensation amounts workers are entitled to,
while Schedule II describes the types of work and workers covered under the
Act.One of the Indian Parliament’s main purposes of this Act was to protect workers
and their families from financial hardship in the event of injury, incapacity, or
death, but since it was enacted, it’s had other positive effects as well, including a
decline in reports of fatal accidents in workplaces across India.
One of the Indian Parliament’s main purposes of this Act was to protect workers and
their families from financial hardship in the event of injury, incapacity, or death, but
since it was enacted, it’s had other positive effects as well, including a decline in
reports of fatal accidents in workplaces across India.
What are employers liable for under the
Workmen’s Compensation Act of 1923?
Under the Act, the employer’s liability for compensation is clearly outlined—employers must
compensate workers who suffer from personal injury or contract an occupational disease while
carrying out their duties. If the injury leads to disability or incapacity, whether temporary or
permanent, employers are required to provide financial compensation. Employers are also
liable for compensating workers in the case of death, ensuring that the worker’s family receive
support.
Employers’ main obligations include:
Strict liability: The Act holds employers to strict or “no-fault” liability, which means that
regardless of whether they were at fault for the accident or injury or it just happened because
they were careless, if it’s work-related, they still have to pay.
Financial Responsibilities: The Act also outlines what employers are responsible for covering,
which includes medical costs, lost wages, and, in some cases, disability benefits or survivor
benefits for surviving family in the event of a worker’s death
rompt consideration: The Act requires payment of compensation in a timely
manner. It outlines how employers must calculate and disburse payments, so
delays don’t get in the way.
Record keeping: Employer to keep accurate records of workplace accidents,
illnesses, and injuries under the law.
Complaince with safety regulations: Employers must follow workplace safety
requirements set forth in the Act. If an accident or injury occurs because of a
failure to take safety precautions, employers may face additional
responsibilities under the law.
Legal recourse: The Act gives workers legal avenues to pursue in the event of
a dispute over compensation.
What benefits can workers receive under
the Workmen’s Compensation Act of 1923?
For Employers:
Legal Compliance: Ensures adherence to legal requirements, avoiding fines
and legal repercussions.
Financial Protection: Shields the company from hefty medical and
compensation costs in case of employee injuries.
Enhanced Reputation: Demonstrates a commitment to employee welfare,
boosting the company’s reputation.
Improved Employee Relations: Fosters a trustful and positive work
environment, leading to higher employee satisfaction.
Productivity Boost: Reduces downtime caused by workplace accidents,
maintaining smooth business operations.
For Employees:
Medical coverage: Provides financial support for medical treatments,
ensuring timely and appropriate care.
Income aid during recovery : Offers compensation for lost wages during
recovery, alleviating financial stress.
Rehabilitation support: Facilitates access to rehabilitation services, aiding in
quicker recovery and return to work.
Family protection : Extends benefits to the employee’s dependents in case of
severe injury or death, securing their future.
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.
Note – Individuals who are liable to receive compensation under the
Employees’ State Insurance Scheme of India (ESIC) cannot get financial
benefits from the above mentioned Act.
What updates have been made to the
Workmen’s Compensation Act of 1923?
The Workmen’s Compensation Act of 1923 has undergone various amendments
over the years to update it and keep worker protections in line with modern
needs. There have been two major amendments since the Act was enacted in
1923:
In 2010, the law’s name was changed to Employee’s Compensation Act.
In 2020, the Ministry of Labour and Employment changed the way
compensation is calculated to increase the amounts workers receive when
they’re injured or become ill due to work.
Who is eligible for coverage under the
Workmen’s Compensation Act of 1923?
All employees working full-time, part-time, or temporarily are eligible for
coverage and financial protection under the Workmen’s Compensation Act,
with a few exceptions:
The Act does not apply to areas covered by the Employees’ State Insurance
Act of 1948, since those workers would be entitled to benefits from the
Employees’ State Insurance Scheme of India (ESIC).
The Act is enforced across India except in Jammu and Kashmir.
How is a workmen’s compensation claim
made?
To make a workmen’s compensation claim, the injured worker or their family
must provide a medical certificate detailing the nature of the injury or
illness. In some cases, a medical examination is required to assess the
severity of the injury and determine the appropriate compensation. The claim
is submitted to the employer, who then forwards it to the insurance company
or directly pays the compensation.
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.
When is the employer not liable to pay
compensation?
As per the Act, employers are not liable to financially compensate their
employees under the following circumstances:
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.
