Workmen’s Compensation Act,

1923
Objectives :

Objectives : The Workmen's

Compensation Act, 1923, aims to provide
workmen and/or their dependents some
relief in case of accidents arising out of
and in the course of employment and
causing either death or disablement of
workmen.
Scope and Coverage
• The Act extends to the whole of India .
The Workmen's Compensation (Amendment)
Act, 2000. has brought all the workers within its
ambit irrespective of their nature of employment
i.e. whether employed on casual basis or
otherwise than for the purposes of the employer's
trade or business. For the first time, casual
labourers will be provided compensation for death
or disability. .
Establishments which are covered by the
Employees State Insurance Act, are outside the
perview of this Act. The coverage of this act is
also to cooks employed in hotels and resturants.
 Sec 2 (d)"dependent" means any of the following relatives of a
deceased workman, namely :- (i) a widow, a minor legitimate or
adopted son, and unmarried legitimate or adopted daughter, or a
widowed mother; and
 (ii) if wholly dependent on the earnings of the workman at the time
of his death, a son or a daughter who has attained the age of 18
years and who is infirm;
 (iii) if wholly or in part dependent on the earnings of the workman
at the time of his death, (a) a widower,
 (b) a parent other than a widowed mother,
 (c) a minor illegitimate son, an unmarried illegitimate daughter or a
daughter legitimate or illegitimate or adopted if married and a
minor or if widowed and a minor,
(d) a minor brother or an unmarried sister or a widowed
sister if a minor,
 (e) a widowed daughter-in-law,
 (f) a minor child of a pre-deceased son,
 (g) a minor child of a pre-deceased daughter where no
parent of the child is alive, or
 (h) a paternal grandparent if no parent of the workman is
alive.
 Explanation : For the purposes of sub-clause (ii) and
items (f) and (g) of sub-clause (iii), references to a son,
daughter or child include an adopted son, daughter or
child respectively;
Sec 2(e)employer" includes any body 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 workman are
temporarily lent or let on hire to another
person by the person with whom the
workman has entered into a contract of
service or apprenticeship, means such other
person while the workman is working for
him;
 Sec 2(ff) "minor" means a person who has not attained the age of
18 years;
 Sec 2 (g) "partial disablement" means, where the disablement
is of a temporary nature, such disablement as reduces the
earning capacity of a workman in any employment in which
he was engaged at the time of the accident resulting in the
disablement, and, 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 :
 Provided that every injury specified in Part II of Schedule I
shall be deemed to result in permanent partial disablement;
Sec 2 (i) "qualified medical practitioner"
means any person registered under any
Central Act, Provincial Act, or an Act of the
Legislature of a State providing for the
maintenance of a register of medical
practitioners, or, in any area where no such
last-mentioned Act is in force, any person
declared by the State Government, by
notification in the Official Gazette, to be a
qualified medical practitioner for the
purposes of this Act;
 Sec 2(l) "total disablement" means such disablement,
whether of a temporary or permanent nature, as
incapacitates a workman for all work which he was
capable of performing at the time of the accident
resulting in such disablement :
 Provided that permanent total disablement shall be
deemed to result from every injury specified in Part I of
Schedule I or from any combination of injuries specified
in Part II thereof where the aggregate percentage of the
loss of earning capacity, as specified in the said Part II
against those injuries, amounts to one hundred per cent
or more;
Employees Entitled
Every employee including those employed
through a contractor and also casual
employees, who suffers an injury in any
accident arising out of and in the course of
his employment, shall be entitled for
compensation under the Act. ' A person
employed in a factory which is yet to
commence production would not be deprived
of the benefit of the provisions of the Act.
The workman employed in a premises
where manufacturing process is intended
to be carried on is not necessarily required
to be actually connected with
manufacturing process. Any person
engaged in such premises who is
contributing for the intended
manufacturing process would be deemed
to be workman for the purpose of the Act.
Employees Entitled Whether Contractor
is a Workman ? Where a person entered
into a construction contract and agreed to
work himself and also to employ his own
labour, while construction material was to
be supplied by the owner, and the
contractor died while working himself, it
was held that the dependents of the
deceased were entitled to compensation
Administrative Authority
 The State Governments administer the
provisions of this Act through the
Commissioners appointed for specified
areas. The State Governments also make
rules for ensuring that the provisions of
the Act are complied with.
Administrative Authority
Jurisdiction of Commissioner
Any matter under this Act, to be done by or
before a Commissioner, shall be done by or
before the Commissioner for the area in
which (a) the accident resulting in the injury,
took place or (b) the workman, or his
dependent, claiming the compensation
ordinarily resides, or (c) the employer has his
registered office. Where a Commissioner is
satisfied that any proceedings can be more
conveniently disposed of by any other
Commissioner, he may transfer the matter to
such other Commissioner.
Disablement : Injury caused to a
workman by an accident ordinarily results
in the loss of the earning capacity of the
workman concerned and this loss of
earning capacity is technically
"disablement". Disablements can be
classified as (a) Total, and {b) Partial. It
can further be classified into (i)
Permanent, and {ii) Temporary..,
Disablement, is said to be total when if
Incapacitates a worker for all work he was
capable of doing at the time of the accident
resulting in such disablement. "Total
disablement" is considered to be permanent
if a workman, as a result of an accident,
suffers from the injury specified in Part I of
Schedule I or suffers from such combination
of injuries specified in Part l of Schedule I as
would be the loss of earning capacity when
totaled to 100 % .
Disablement is said to be permanent partial
when it reduces for all times, the earning
capacity of a workman in every employment
which he was capable of undertaking at the
time of the accident. Every injury specified
in Part II of Schedule I is deemed to result in
permanent partial disablement. Where the
disablement is of a temporary nature and
reduces the earning capacity of a workman in
the employment in which he was engaged at
the time of the accident it is "temporary
partial disablement.
Accident Compensation-when
payable
The employer of any establishment covered
under this Act, is required to compensate an
employee: who has suffered an accident
arising out of and in the course of his
employment, resulting into (i) death, (ii)
permanent total disablement, (iii) permanent
partial disablement, or (iv) temporary
disablement who has contracted an
occupational disease accident arising out of
and in the course of Employment Accident
arising out of and in the course of
Employment
An accident arising out of employment
implies a casual connection between the
injury and the accident and the work done
in the course of employment
What are the condition for receiving compensation
for Personal Injury caused by the accident ? :
The three tests for determining whether an
accident arose out of employment are :
At the time of injury workman must have
been engaged in the business of the employer
and must not be doing something for his
personal benefit;
That accident occurred at the place where he
was performing his duties; and
Injury must have resulted from some risk
incidental to the duties of the service, or
inherent in the nature or condition of
employment.
When is an Employer not liable to
pay compensation ?
 The employer shall not be liable to pay
compensation in the following cases:
 If the injury did not result in total or partial
disablement of a workman for a period exceeding
three days,
 If the workman was at the time of the accident
under the influence of drink of drug, or if the
workman willfully disobeyed an order expressly
given or a rule expressly framed for the purpose of
securing safety of workman, or
 If the workman willfully removed or disregarded
any safety guard or other device which to his
knowledge was provided for the purpose of
securing his safety.
AMOUNT OF COMPENSATION –sec 4 :

The amount of compensation payable to a

workman depends on the nature of injury
caused by accident, the monthly wages of
the workman concerned, and the relevant
factor for working out lump sum
equivalent of compensation amount as
specified in Schedule IV. There is no
distinction between an adult and a minor
worker with respect to the amount of
compensation.
COMPENSATION FOR DEATH
In case of death resulting from injury, the
amount of compensation shall be equal
50% of the monthly wages of the
deceased workman multiplied by the
relevant factor. Or an amount of Rs
80,000/- whichever is more.
Example: :
Example: A workman is employed in a
factory on a monthly wage of Rs 3000.
While working he met with an accident and
dies on oct 2000. His date of birth is july 18 ,
1970. The amount of compensation payable
to his dependent would be 50* monthly
wages* Relevant factor of age 30 100 0r
80,000 whichever is higher 50* 3000*
207.98 = 3,11,970 100 Since Rs 311970 is
more than 80000 the compensation payable
to him shall be Rs 311,970
COMPENSATION FOR PERMANENT
TOTAL DISABLEMENT
In case of permanent total disablement
resulting from the injury, the amount of
compensation shall be 60% of the monthly
wages of the injured workman multiplied by
the relevant factor or Rs 90,000/- thousand
whichever is more. For the above example
the compensation would be 60* 3000*
207.98 = 3,74,365 100 Since Rs 3,74364 is
more than 90,000 the amount of
compensation payable should be Rs 3, 74364
COMPENSATION FOR PERMANENT
PARTIAL DISABLEMENT
Where permanent partial disablement occurs, the
amount of compensation payable shall be as
follows: in case of an injury specified in part II of
the schedule I, the amount of compensation shall
be such percentage of the compensation which
would have been payable is the percentage of loss
of earning capacity caused by that injury. in case
of an injury not specified in schedule I, such
percentage of the compensation is payable which
is proportionate to the loss of earning capacity (as
assessed by a qualified medical practitioner)
permanently caused by the injury.
COMPENSATION FOR TEMPORARY
DISABLEMENT (TOTAL OR PARTIAL) :
Ifthe temporary disablement, whether total or
partial results from the injury, the amount of
compensation shall be a half monthly payment of
the sum equivalent to 25% of the monthly wages
of the workman to be paid in accordance with the
provisions. The half monthly payment shall be
payable on the sixteenth day from the date of
disablement In cases where such disablement lasts
for a period of 28 days or more compensation is
payable from the date of disablement In other
cases After the expiry of a waiting period of three
days from the date of disablement
COMPENSATION TO BE PAID WHEN DUE
AND PENALTY FOR DEFAULT
(Section 4A) As per this section, compensation
has to paid as soon as it is due In case the
employer does not accept the liability of paying
the compensation, he is bound to make
provisional payment to the extent of the liability
he accepts. Such amount has to be deposited with
the commissioner or paid to the workman. If he
defaults, the commissioner may order: the
payment of the amount with interest at12 % per
year if the default to be unjustifiable then the
commissioner may order payment of a further
sum not exceeding 50% of the amount due, by
way of penalty.
Payment of Compensation to Contract
Labour :
Payment of Compensation to Contract
Labour The principal employer is liable to
pay compensation to contract labour in
the same manner as his departmental
labour. He is entitled to be indemnified by
the contractor. The principal employer
shall not however be liable to pay any
interest and penalty leviable under the Act
.
Occupational Diseases :
Occupational Diseases 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.
Statement of Fatal Accidents :
 Where a commissioner receives information from any
source that a workman has died as a result of an
accident arising out of and in the course of his
employment, he may require the employer, by serving
upon him a registered notice, to submit within 30 days
of its service, a statement in the prescribed form ; (a)
Giving the circumstances attending the death of the
workman, and (b) Indicating whether he is or, is not,
liable to pay accident compensation. If the employer
feels that he is liable to pay compensation, he shall
make the deposit within 30 days of the service of the
notice. If the employer disclaims his liability, he
should indicate the grounds for such disclaimer.
Accident Report
Where the accident results in death or
serious bodily injury, the employer should
send a report to the Commissioner, within
7 days of the accident, in the prescribed
from giving the circumstances attending
the death or serious bodily injury .
Mode of Payment :
The employer becomes liable to pay the
compensation as soon as the personal injury was
caused to the workman by the accident which
arose out of and in the course of the employment.
The amount of compensation should be paid as
soon as it falls due. It will be computed on the
date of accident. If the amount is not paid within
one month from the date it fell due, the
Commissioner may after giving reasonable
opportunity of being heard, direct the employer to
pay simple interest @ 12% p.a. or at such higher
rate as may be specified not exceeding the.
Maximum lending rate of any scheduled bank.
Mode of Payment :
Besides, if there is no justification for the delay,
the Commissioner may after giving reasonable
opportunity of being heard, direct the employer to
pay a further sum not exceeding 50% of the
compensation, by way of penalty. The amount of
penalty (earlier payable to the Government) and
also interest shall be paid to the workman or his
dependent as the case may be The half-monthly
installments of compensation (payable in case of
temporary disablement) should be paid within the
time specified. The half-monthly installments can
be converted into a lump sum payment, by an
agreement between the employer and the
employee or by applying to the Commissioner
Compensation to be deposited with
Commissioner :
 The amount of compensation is not payable to the
workman directly. It is generally deposited along with
the prescribed statement, with the Commissioner who
will then pay it to the workman. Any. payment made to
the workman or his dependents, directly, in the
following cases will not be deemed to be a payment of
compensation : (i) in case of death of the employee; (ii)
in case of sump sum compensation payable to a woman
or a minor or a person of unsound mind or whose
entitlement to the compensation is in dispute or a person
under a legal disability. Besides, compensation of Rs. 10
or more may be deposited with the Commissioner on
behalf of the person entitled thereto. The receipt of
deposit with the Commissioner shall be a sufficient
proof of discharge of the employer's liability.
Notice of Accident
Accident A 'notice of accident' should be
sent to the Commissioner, by the concerned
employee as soon as practicable after the
happening thereof. The notice should contain
such particulars as the name and address of
the person injured, the date and cause of
accident, etc. A Copy of the notice should
also be sent to the establishment wherein he
was employed. The notice of accident may
be served either personally or by registered
post or by means of an entry in the notice-
book maintained by the employer.
Medical Examination
The employer may get the concerned
workman examined by a qualified medical
practitioner, within 3 days from receiving the
notice of accident. The employee must
present himself for such examination
otherwise he shall loose his right to the
compensation. Failure of employer to have
the workman medically examined does not
debar him from challenging the medical
certificate produced by the workman
Attachment and Assignment of
Compensation
No compensation payable under this Act,
whether in lump sum on half-monthly
payments, can be attached, charged or
passed on to any person other than the
workman by operation of law, nor can it
be set-off against any other claim.
Obligations of Employers :
 To pay compensation for an accident suffered by an
employee, in accordance with the Act. To submit a statement
to the Commissioner (within 30 days of receiving the notice)
in the prescribed form, giving the circumstances attending the
death of a workman as result of an accident and indicating
whether he is liable to deposit any compensation for the
same. To submit accident report to the Commissioner in the
prescribed form within 7 days of the accident which results in
death of a workman or a serious bodily injury to a workman.
To maintain a notice book in the prescribed from at a place
where it is readily accessible to the workman. To submit an
annual return of accidents specifying the number of injuries
for which compensation has been paid during the year, the
amount of such compensation and other prescribed
particulars.
Obligations of Employees
To send a notice of the accident in the
prescribed form, to the Commissioner and
the employer, within such time as soon as
it is practicable for him. This notice is
precondition for the admission of the
claim for compensation. To present-
himself for medical examination, if
required by the employer.
