Employee’s Compensation Act, 1923

Employee’s/Workmen’s Compensation Act, 1923 The Workmen’s Compensation Act, aims at providing financial protection to the workmen and/or their dependents in case of accidents arising out of and in the course of employment and causing either death or disablement of workmen. Besides, the Act has a provision of paying compensation to the workmen for some occupational diseases contracted by them during the course of their employment. Workers’ compensation settlement is estimated in the following manner based on the incidence which has led to the compensation: Before the calculation of settlement under workmen compensation insurance policy following points should be noted: Maximum monthly wage allowed for the calculation of compensation under the Act is Rs. 15,000 Workers from the age of 18 years and above are eligible for the compensation Relevant Factor is an age-based multiplier defined in Appendix I Calculation: Monthly wages X %age X Age factor Monthly wages = Maximum is taken as 15,000/- Example: Workman with monthly wages of 20,000 died at the age of 46 ( Age factor 166.29- refer Appendix I) Compensation= 15000 X 50/100 X 166.29 = Rs 12,47,175/- The employer will not be liable to pay compensation when: – An injury does not result in the total or partial disablement of the employee for more than 3 days; – an injury doesn’t result in death or permanent total disablement caused by an accident under the influence of drink or drugs; – In case of accidents caused by wilful disobedience of the rules by the employee and wilful removal of safety guards, the employer is not liable to pay compensation. The Act does not apply where a workman is covered under ESI Act - As workman is entitled to get compensation from Employees State Insurance Corporation, a workman covered under ESI Act is not entitled to get compensation under Workmen’s Compensation Act. In most cases, the employer will be liable even if just one workman is employed. Principal Employer is liable to pay the amount of compensation for the injury suffered by workman employed through contractor, if the accident arises as a result of an accident arising out of and during the course of employment It is the responsibility of the Employer to inform the Commissioner.