Employees Compensation Act, 1923.pptx

Employees compensation Act, 1923

INTRODUCTION  Title of the Act Before was – Workmen’s Compensation Act 1923 and now the title of the Act is amended to “Employees Compensation Act 1923”. The Words and expressions Before were - Refer to the words „workman‟ or „workmen‟ in the Act and now - They are substituted by the words „employee‟ or „employees‟ wherever they occur.  The Employees Compensation Act, 1923 extends to the whole of India. It came into force on the first day of July, 1924. It is social security legislation.  The Employees Compensation Act, 1923 imposes statutory liability upon an employer to discharge his moral obligation towards employees when they suffer from any physical disabilities or diseases, during the course of employment in hazardous working conditions.

OBJECTIVE OF THE ACT  The Employees Compensation Act, 1923 is one of the important social security legislations. It aims at providing financial protection to employee.  To provide Relief to employee and/or their Dependents if employee faces death or Disablement due to accidents arising out of and in the course of employment.  The aim of the Act is to provide quick and cheaper disposal of disputes relating to the compensation which is not possible in comparison in case of proceedings of civil law.  The Act also helps the dependents to get relieved from the hardship, rising from accident.

GOLDEN SOAP FACTORY (P) Ltd v. Nakul Chandra Mondal (AIR 1964 Cal 217)

The court observed that, Considering the ultimate objective of the act it is necessary to give a benevolent construction to the provisions of the act. Therefore this act must be interpreted with sympathetic leniency and must not be construed very strictly.

APPLICABILITY OF THE ACT Applicable to: -

•

Mines

•

Factories

•

Plantations

•

Transport Establishments

•

Construction Works

•

Railways

•

Ships

•

Circuses

Not applicable to •

Members of armed forces of union

•

Employees covered by ESI Act, 1948.

•

Casual Workers & workers employed otherwise than for employer’s trade or business

SECTION 2(dd)- “EMPLOYEE” "employee" means a person, who is–

(i) a railway servant as defined in clause (34) of section 2 of the Railways Act, 1989 (24 of 1989), not permanently employed in any administrative district or sub-divisional office of a railway and not employed in any such capacity as is specified in Schedule II; or (ii) (a) a master, seaman or other members of the crew of a ship, (b) a captain or other member of the crew of an aircraft,

(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with a motor vehicle, (d) a person recruited for work abroad by a company, and who is employed outside India in any such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as the case may be, is registered in India; or iii) employed in any such capacity as is specified in Schedule II, whether the contract of employment was made before or after the passing of this Act and whether such contract is expressed or implied, oral or in writing; but does not include any person working in the capacity of a member of the Armed Forces of the Union; and any reference to any employee who has been injured shall, where the employee is dead, include a reference to his dependents or any of them;]

SECTION 2(e)- “EMPLOYER”

"employer" includes anybody of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased

employer, and, when the services of a employee are temporarily lent or let on hire to another person by the person with whom the employee has entered into a contract of service or apprenticeship, means such other person while

the employee is working for him.

SECTION 3- EMPLOYER’S LIABILITY FOR COMPENSATION If personal injury or an occupational disease is caused to an employee by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter.

Brydon v. Stewart (1855) 2 Macq 30

It is the personal duty of an employer to his servant, The employer is no doubt bound to provide for safety of his servant in the course of his employment to the best of his judgment, information and belief.

Accident

National Board of Examinations v. G. Anand Ramamurthy (2006) 5 SCC 513

The expression accident means an untoward mishap which is not expected or designed.

Factors for determination of Liability

Kondisetti Anjaiah v. T. Lakshmaiah AIR 1953 SC 333

In determining the liability of an employer it is necessary to establish that the accident has arisen out the course of the employment. It is sufficient if it can be proved:(a)That at the time of the accident he was in fact employed, on the duties of his employment; (b) That it occurred at the place where he was performing those duties; and (c) that the immediate act which led to the accident is not so remote from the sphere of his duties as to be regarded as something foreign to them.

In the course of Employment

 The expression ‘in the course of employment’ thus means not only the actual work which the man employed is to do but also what is incidental to it in the course of his employment.  It would thus include not only the period when he is doing the work but also the time when he is at a place where he would not be but for his employment.

G.I.P. Rly. V. Kashinath Chimnaji, AIR 1933 Bom 1

 Workman was sent on a message by one of the company’s officers from Kalyan to Bombay. In Bombay he was directed by another of the company’s officers to return to Kalyan.

 On his way back he was travelling in an electric train. While he was standing at the door of the carriage which was left open supporting himself on the vertical iron bar as a result of a jerk he fell down on the line and dies consequently. It was held that the accident arose in the course of the deceased workmen’s employment.

THEORY OF NOTIONAL EXTENSION

• Ordinarily a man’s employment does not begin until he has reached the place he has to work and does not begin until he has reached the place of his employment. • The period of going to or returning from the employment are generally excluded and are not within the course of employment. But there may be reasonable extension in both the time and place and the employee maybe regarded as in the course of his employment even though he has not reached or has left his employer’s premises.

Theory of Notional Extension

SMITH v. STAGES (1988)

The employer was held vicariously liable while his employee suffered injuries on his return journey from a place away from his normal place of work. The question arose whether his journey at home was made in the course of his employment. It was held that when an employee drove between two places of work, that was usually a journey made in the course of his employment. If he actually started or finished such a journey at home for convenience, rather than travelling via his normal place of employment, that could also be a journey made in the course of his employment.

M. Mackenzie v. I.M. Issak AIR 1970 SC 1906

• To attract Section 3 of the Act the Supreme court has laid down that the Injury by accident must arise both out of and in the course of employment; • The expression ‘in the course of employment’ means ‘in the course of the work which the workman is employed to do and which is incidental to it.’ • The expression ‘arising out of employment’ is understood to mean that ‘during the course of the employment, injury was resulted from some risk incidental to the duties of the service, which, unless engaged in the duty owing to the master, it is reasonable to believe the workman would not otherwise have suffered.

M. Mackenzie v. I.M. Issak AIR 1970 SC 1906

Test: To determine the relationship between the accident and the employment, one test is always applicable.

Was it part of the injured person’s employment to hazard, to suffer or to do that which caused him injury? If yes, the accident arose out of his employment.

Varadarajulu v. M. Boyan AIR 1954 Mad 1113

The employer was a contractor for the formation of a road and the deceased was a coolie mistry under him. The employee suffered injury by overturning of the lorry belonging to the contractor and driven by his driver when the said lorry was conveying the employees to the workspot.

Held: Where the kind of transport provided by the employer was the only means available to employees, the accident was held to be in the course of the employment because not only the lorry by the employer was merely a reasonable means of transport but also that there was no other means of conveyance to and from the workspot.

T.N.C.S. Corporation Ltd v. S. Poomalai (1995) I LLJ 378 (Madras)

An employee was murdered in communal riot when he was on his way to the place of work. Death was held to be in relation to his employment and in the course of employment entitling the wife of the deceased employee to compensation under the act.

J.F. Pareira v. Eastern Watch Co. Ltd (1985)

A salesman working in the company on the ground floor sought a few minutes permission to go out. Subsequently, he was found unconscious in the third floor of the building and died in the hospital. It was held that while on duty an employee can be out for smoke or to visit conveniences or to enjoy a cup of tea. So long as he he does not go out for his personal work, he would be deemed to be on the premises.

Management of Shree Lalithambika Enterprises, Salem v. S. Kailasam (1988) Madras

It was held that an accident on a holiday while cleaning machinery is accident arising out and in the course of employment.

OCCUPATIONAL DISEASE Workers employed in certain types of occupations are exposed to the risk of contracting certain diseases which are peculiar and inherent to those occupations. A worker contracting an occupational disease is deemed to have suffered an accident out of and in the course of employment and the employer is liable to pay compensation for the same. Example:

 Infections due to contamination.  Infra-red radiations.  Skin diseases [Chemical, Leather Processing Units].  Hearing impairment caused by noise.

 Lung Cancer caused by asbestos dust.  Diseases due to effect of heat/cold in extreme hot/cold climate, etc

CONT.. Occupational diseases have been categorized in Parts A, B and C of Schedule III. The employer is liable to pay compensation:  When a workman contracts any disease specified in Part A since the time he starts working for employer.  When a workman contracts any disease specified in Part B, while in service for a continuous period of 6 months under one employer. (Period of service under any other employer in the same kind of employment shall not be included),  When a workman contracts any disease specified in Part C, while he has been in continuous service for a specified period (as prescribed by Central Government), whether under one or more employers. (Proportionate compensation is payable by all the employers, if the workman had been in service under more than one employer).

DEFENCES WHICH THE EMPLOYER CAN TAKE (Proviso to Section 3(1) of the Act

(1). The employer shall not be so liable in respect of any injury which does not result in the total or partial disablement of the workman for a period exceeding three days. (2) If the injury includes any of the following elements:(a) Self Inflicted Injury An injury caused by an accident which could have been anticipated or foreseen or is brought intentionally by employee himself does not make the master liable, for it cannot be termed as an injury by accident within the terms of the Act. (b) Intoxication Influence on employee of cocaine, alcohol etc. may result in reduced benefits or a complete bar on recovering employee’s compensation benefits. Once employer proves that employee was intoxicated at the time of accident, the burden shifts on employee to prove that intoxication did mot contributed to the accident. (c) Willful disobedience of Orders or safety devices etc. In order to disown any claim for compensation the employer has to show not only disobedience of safety rules but also has to show that the disobedience was willful and orders were express.

DEFENCES WHICH THE EMPLOYER CANNOT TAKE (Proviso to Section 3(1) of the Act

(1). Compensation under Agreement: In Roshan Deen v. Preeti Lal it was held that an agreement by an employee to relinquish any right to compensation for personal injury arising out of and in course of employment would be null and void. (2).

Contributory Negligence: It is also not a ground under this Act for reducing the amount of

compensation if accident has arisen in course of employment. In Abdula Kutty v. C. Janaki an employee in a saw mill received injuries on his finger was given treatment by employer and re

employed. Later on injury developed into tetanus and employee died due to negligence. It was held that compensation payable to widow cannot be reduced on the ground of contributory negligence.

ALTERNATE REMEDY u/s 3(5)

No claim for compensation shall be maintainable by an employee in respect of any injury if he has already instituted a civil proceedings for damages in respect of the same injury against the employer or any other person. So, also no suit for damages shall be instituted by an employee in any court of law in respect of any in the following two circumstances: (1) If such employee has made a claim to compensation in respect of such injury before a commissioner; or (2) If the amount of compensation in respect of the injury has been settled by an agreement b/w the employee and the employer in accordance with the provisions of this act.

Section 3(5) imposes a bar on the recovery by the employee of compensation twice for the same injury. It is not only a success to a claim that bars a subsequent claim, but also an unsuccessful claim against the employer, the claimant shall be debarred form making any alternative claim in respect of the same injury.

Partial Disablement Section 2(1) (g)

Such disablement is to two kinds(i) Temporary partial disablement (ii) Permanent partial disablement. To determine whether the injury is permanent or temporary the courts have to see whether the injury has incapacitated the employee from every employment which he was capable of undertaking at the time of accident or merely from the particular employment in which he was at the time of the accident resulting in disablement. In the former case the disablement is partial but permanent, in the latter case it is temporary.

C.L.M. Bengal Chamber of commerce v. Md. Hossian

Loss of earning capacity or the extent of it has to be determined by taking into account the destruction of physical capacity as disclosed by the medical evidence and then it is to be seen to what extent such destruction would reasonably be taken to have disabled the affected employee from performing the duties which an employee of his class ordinarily performs.

Total Disablement Section 2(1) (l)

When an employee is incapacitated of doing any work which he was capable of performing at the time of accident resulting in such disablement, it is total disablement. It is further provided in the Act that permanent total disablement shall be deemed to result from every injury specified in Part I of Schedule I. It may also result from any combination of injuries in Part 2 of the Schedule 1, where the aggregate percentage of the loss of earning capacity, as specified against those injuries amounts to 100% or more.

Dependant Section 2(1) (d) Under this section relations of an employee are divided into 3 classesDependents belonging to any class may claim simultaneously:Class 3

Class 1

• Widow • A minor legitimate /adopted son • Unmarried daughter • Widow Mother (whether dependant on the earnings of the employee or not)

Class 2

Son and daughter • Wholly dependant on the earnings of the employee at the time of his death. • They must be infirm • They must have attained the age of 18 years.

• A widower • Parent other than widowed mother • A minor illegitimate son, unmarried illegitimate daughter, a daughter (legitimate/illegitimate/adoptedMarried and minor , or if widowed or minor. • Minor brother, unmarried sister or widowed married sister • A widowed daughter-in-law • Minor child of pre-deceased son • Miinor child or predeceased daughter when no parent is alive. • A paternal grandfather if no parent of an employee is alive.

AMOUNT OF COMPENSATION SECTION-4

Subject to the provisions of this act, the amount of compensation shall be as follows, namely:-

(a) Where death results from the injury

(b) Where permanent total disablement results from the injury

An amount equal to 50% of the monthly wages of the deceased employee multiplied by the relevant factor; or Rs 1,20,000/- whichever is more.

An amount equal to 60% of the monthly wages of the injured employee multiplied by the relevant factor; or Rs 1,40,000/- whichever is more.

AMOUNT OF COMPENSATION SECTION-4

Explanation 1- For the purposes of clause (a) and clause (b)“relevant factor” in relation to an employee means the factor specified in the second column of schedule IV against the entry in the first column of that schedule specifying the number of years which are the same as the completed years of the age of the employee on his last birthday immediately the date on which the compensation fell due.

Explanation 2- Where the monthly wages of an employee exceed Rs 4000/-, his monthly wages for the purposes of clause (a) and (b) shall be deemed to be Rs 4000/- only.

AMOUNT OF COMPENSATION SECTION-4

(c) Where permanent partial disablement results from the injury

(i) In the case of an injury specified in Part II of schedule 1, such percentage of the compensation, which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by that injury, and

(ii) In the case of an injury not specified in schedule 1, such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner) permanently caused by the injury.

(d) Where temporary disablement whether total or partial results from the injury

A half-monthly payment of the sum equivalent to 25% of monthly wages of the employee, to be paid in accordance with the provisions of sub-section 2.

The half-monthly payment referred to in clause (d) of sub-section (1) shall be payable on the 16th day:(i) From the date of disablement where such disablement lasts for a period of 28 days or more. (ii) After the expiry of a waiting period of 3 days from the date of disablement where such disablement lasts for a period of less than 28 days.

AMOUNT OF COMPENSATION SECTION-4

(3) On ceasing of the disablement before the date on which any half-monthly payment falls due there shall be payable in respect of the half-month a sum proportionate to the duration of the disablement in that half-month.

(4) If the injury of the employee results in his death, the employer shall in addition to the compensation under sub-section (1), deposit with the commissioner a sum of not less than Rs 5000/- for payment of the same to the eldest surviving dependant of the employee towards the expenditure of the funeral of such employee or where the employee did not have a dependant or was living with his dependant at the time of his death to the person who actually incurred such expenditure.

Notice and claims of the accident Section 10

An employee who is injured by an accident must give a notice of it writing ‘as soon as practicable’ after the occurrence of the incident. The notice must contain:• The name and the address of the employee injured • The date of the accident; and • The cause of the injury, The notice has to be served upon the employer or any person responsible to the employer, by hand or by post to the residence or any office or place of business of any person, to whom it is addressed. According to section 10(1)- No claim for compensation shall be entertained by the commissioner unless a notice of the accident is given in the prescribed manner and the claim is preferred within 2 years of the occurrence of the accident.

Commissioners

Powers under CPC

The state Government has been authorized to appoint any person who is or has been:• member of State judicial services ( For not less than 5 years) • An advocate or a pleader, or • Gazetted officer( Not less than 5 years) having educational qualifications and experience in personnel management, human recourse development and Industrial relations as the commissioner for Employees Compensation.

Jurisdiction of a civil court debarred, where cases dealt by Commissioner.

DISTINCTION BETWEEN EMPLOYEES STATE INSURANCE ACT 1948 AND EMPLOYEES COMPENSATION ACT 1923

GROUNDS OF DISTINCTION

ESI ACT 1948

ECA ACT 1923

Objectives of Act

To provide benefits to employees in case of sickness, maternity and employment injury caused by accident or occupational disease

To provide compensation to workmen for injury caused by accident or occupational disease.

Act covers

Employment injury or death caused by accident or occupational disease, sickness or maternity.

Employment injury or death caused by accident or occupational disease.

Wage limit under the Act as present

Rs. 21,000/-

No wage limit.

Nature of scheme offered

Contributory wherein both employer and employee contribute 4.75% and 1.75% of wages respectively.

Only the employer has to pay entire compensation.

Benefits covered under the Act

Covers six benefits

Covers disablement an dependent’s benefit on

Who is responsible for making payment

ESIC

Employer

How is compensation paid?

Periodically

One time lump payment in cash

s

Nature of claim process

Easy and convenient

Complex consuming

ti

Act administered through

ESI Corporation, Standing Commisionners Committee, Medical benefit council and Court.

and