Employees Compensation Act -1923

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Employees Compensation Act, 1923 (E.C.Act, 1923):

Dr.K.PADMANABHAN Assistant Professor of Corporate Secretaryship Bharathidasan Govt. College for Women (Autonomous) Puducherry-605 003. Employees Compensation Act, 1923 ( E.C.Act , 1923)

Note:

Note Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 2 This PPT is prepared for the U.G. Students with a view to simplify the lengthy paragraphs. Your feed back & suggestions are invited for improvement of this PPT & to take efforts to prepare PPTs on other areas of Labour Laws & other areas of subject relating to Corporate Secretaryship . [drkpnabhan@rediffmail.com; 919842793943]

Objective of the Act:

Objective of the Act Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry. 3 Objective of The E.C. Act, 1923 To provide Relief to Workmen and/or their Dependants if workmen Dead Disabled due to accidents arising out of and in the course of employment

Defences Available to Employers Before Passing E.C.Act, 1923:

Defences Available to Employers Before Passing E.C.Act , 1923 Doctrine of Assumed Risk ‘ volenti non fit injuria ’-Where there is consent there is not injury. Doctrine of Common Employment Employer not liable to pay compensation to employee for injury Worker working with several persons for common purpose. Worker injured by some act or omission of some of the persons of his group. Doctrine of Contributory Negligence Employee not entitled to compensation for injury caused by his own negligence. (Employer not responsible for negligence on the part of employees). End of Personal Action with Death Personal Action (of employee) came to an end due to death of employee. 4 Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry .

Ways Open to Employees for Claiming Compensation:

Ways Open to Employees for Claiming Compensation Injured employee may File a Civil suit or Employee choice between these two reliefs. Claim compensation under E.C.Act,1923 Employee cannot file a suit for damages in any Court of Law if He filed claim under E.C.Act,1923 Existence of agreement between employee & employer for payment of compensation as per E.C.Act,1923. Comparison Civil Suit E.C.Act , 1923 Risky & costly Safe & less costly. Employer can put forward all defences available to him under law of torts. 5 Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry .

Scope & Coverage of the Act:

Scope & Coverage of the Act Extends to whole of India Applies to employees employed in Not apply to Factories members of Armed Forces of Union Mines Employees covered by ESI Act, 1948. (Dependants’ Benefit available) Plantations Casual workers & workers employed otherwise than for employer’s trade or business. Transport Establishments Construction works Railways Ships Circuses 6 Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry .

Definitions:

Definitions Section Term Explanation Sec.2(1)(b) Commissioner Commissioner for Employees Compensation appointed u/s.20. Sec.2(1)(c) Compensation Compensation as provided for by this Act. Sec.2(1)(d) Dependant Person who depends upon another for his livlihood . (General Meaning). 7 Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry .

Dependant:

Dependant Dependants-whether actually so or not. Wholly Dependant on the earnings of the Employee at the time of death. Dependants- Wholly or in Part Dependant on the earnings of the Employee at the time of death. Widow Son or Daughter attained 18 years of age and infirm. Widower Minor legitimate or adopted son. Parent other than a Widowed Mother. Unmarried legitimate or adopted daughter or Minor illegitimate son Unmarried illegitimated daughter or daughter legitimate or illegitimate or adopted or adopted if married & a minor or if widowed & a minor. Widowed Mother Minor brother or unmarried sister or a widowed sister if minor. Minor child of pre-deceased son. Minor child of pre-deceased daughter where no parent of child alive or. Paternal grandparent if no parent of the employee is alive. 8 Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry .

Definitions:

Definitions Employer-Sec.2(1)(e): ”E mployer” includes Any body of persons whether incorporated or not; Any managing agent of an employer; and The legal representative of a deceased employer. Disablement: Loss of capacity to work or to move. Disablement of an employee may result in loss or reduction of his earning capacity. (Not able to earn as much as worker used to earn before his disablement). [ Eg.Before Disablement-Rs.200; After Disablement-Rs.100] 9 Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry .

Definitions:

Definitions Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 10 Employer-Sec.2(1)(e): Employer includes Body of persons whether incorporated or not. Managing Agent of an employer. Legal Representative of a deceased employer. Disablement Loss of capacity to work or to move. Result loss reduction (Not able to earn as much as worker used to earn before his disablement) of earning capacity of employee.

Disablement:

Disablement Disablement of an employee may result in loss or reduction of his earning capacity Partial Disablement Total Disablement [ Temporary/Permanent ] Reduces earning capacity Incapacitates an employee for ALL WORK he was capable of performing at the time of accident. Temporary Partial Disablement Permanent Partial Disablement Reduces earning capacity of an employee in ANY EMPLOYMENT he was engaged at the time of accident. Reduces earning capacity of an employee in EVERY EMPLOYMENT he was capable of undertaking at the time of injury. 11 Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry .

Definition:

Definition Employees-Sec.2(1)(n) Railway Servant Master, Seaman /other member of crew of ship Employed in any capacity as specified in Schedule-II. Not permanently employed in any administrative, district or sub-divisional office of railway & not employed in capacity as specified in Schedule-II Captain/other member of crew of aircraft Driver, helper mechanic, cleaner or in any capacity in connection with motor vehicle. Person recruited for work abroad by company-employed outside India in any capacity specified in Schedule-II. (Ship, aircraft/ motor vehicle/company –registered in India. Not include – employment of casual nature.[Casual Nature-Not regular/continuous] 12 Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry .

Rules Regarding Employees' Compensation:

Rules Regarding Employees' Compensation Employer’s Liability for Compensation : Employer is liable to pay compensation to an employee [Accident & Occupational Diseases] For personal injury caused to employee by accident. For any occupational disease contacted by employee. Accident Arising out of (due to-reason) & in the course of (during-time) employment. Occupational Disease Exposed to certain diseases inherent in those occupations. 13 Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry .

Employer’s Liability & Non-Liability to Pay Compensation :

Employer’s Liability & Non-Liability to Pay Compensation Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry. 14 Employer Liable to Pay Compensation Not Liable to Pay Compensation For Injury caused to an employee by accident arising out of & in the course of employment – if Accident Occupational Disease [a] Injury not result in Total Partial Disablement Exceeding 3 days. arising out of and in the course of employment, resulting into exposed to certain diseases inherent in those occupations [b] Workman under influence of drink/ drug At the time of accident . Death Disablement [c] Workman willfully disobeyed Safety Rules Under [b] & [c] not liable to pay compensation not apply in case of workmen dead. ( i.e.Employer Liable to pay compensation) removed / disregarded Safety guard / other device

Sec 3(1) Linkages:

Sec 3(1) Linkages Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 15

Personal Injury by Accident:

Personal Injury by Accident Eg . Fact of the Case Decision 1 Employee in course of his duties, frequently to go into a heating room & from there to a cooling room. One night he went into the cooling room, he got phenumonia of which he dies. Accident [Death was due to personal Injury] 2 Person becomes insane as a result of an accident & then commits suicide. Death is result of an accident. [compensation to be awarded]. 16 Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry .

Arising out of & in the course of employment:

Arising out of & in the course of employment Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry. 17 "Arising Out Of and In The Course Of Employment” These words refer to the link between the cause of the accident and the employment.   Arise Out of Employment In the Course of Employment Nexus [connectivity] must be established between the accident and the employment Employee is helping the employer's business goals in doing the activity where the injury occurred. Conditions Time during which employment continues. Injury resulted from risk incidental to the duties of service. [Injury- during the course of employment]. At the time of injury-worker engaged in business of employer. [Not involved for his personal advantage or benefit]. [ emphasizes that there must be a casual connection between the employment and the accidental injury] [ emphasizes the time when accidental injury was caused] arising out of - suggests the cause of the accident in the course of - refers to the time, place, and circumstances of the accident

Theory of Notional Extension:

Theory of Notional Extension Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 18 Concept: Employer is liable for injury to his employee even when the employee is away from the premises at the time of accident. General Rule Employment of an employee does Not commence until he reached place of employment. Not continue When he left the place of employment. The journey to & from the place of work excluded . But Theory of Notional Extension Included t he journey to & from the place of work . [Going to work place from residence or while returning from work place to residence] . If the employee dies due to accident while going to work place from residence or while returning from work place to residence , as an accident arising out of and during the course of employment and as such entitled for compensation.[Theory of Notional Extension]

Cases of Accidents Arising Out of & In the Course of Employment:

Cases of Accidents Arising Out of & In the Course of Employment Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 19 Case Accident Arose out of & in the course of employment A railway employee was ordered to travel to a certain station to repair a water main. When he had finished the work & was crossing the platform to catch the train, he slipped & died as a result.  A watchman in the course of his duty lifted G.I.Pipe in order to keep it in a safe place. While doing so, he received injury.  An employee suffered from heart disease & died on account of strain of work by keeping continuously standing or walking.  An employee suffering from heart disease after having worked for 8 hours on a hot day in a mill collapsed. There was evidence to the effect that collapse was likely to have been caused by strain of work on a diseased heart. 

Occupational Diseases:

Occupational Diseases Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 20 Workers employed in certain occupations are exposed to certain diseases which are inherent [its character] in those occupations. Eg . 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.

Compensation for What?:

Compensation for What? Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 21 Sec-4 Provides for Compensation for Death Disablement Permanent Temporary Total Partial Total Partial [or] Total Partial Permanent Temporary Permanent Temporary

Compensation:

Compensation Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 22 Compensation Factors considered for calculation / Depends on a)Nature of Injury Death Disablement Permanent Temporary Total Partial Total Partial [or] Total Partial Permanent Temporary Permanent Temporary b)Monthly Wages of Employee c)Relevant Factor No Distinction between Adult & Minor

Amount of Compensation:

Amount of Compensation Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 23 Compensation for Death Compensation for Disablement 50% of M.W. X R.F. [ or] 1,20,000 whichever is more. Permanent Disablement Temporary Total/Partial Total Partial [Injury listed in Part-II of Schedule-I] 60% of M.W. X R.F. [or] 1,40,000 whichever is more. % of loss of earning capacity – that [such] % of compensation payable in case of Permanent Total Disablement. 25% of M.W. – Payable every Half-Month. Injury not listed in Schedule-I As in case of PTD-proportionate to loss of earning capacity [loss of earning capacity-assessed by qualified medical practitioner-considering list of injuries listed in Schedule-I]

Amount of Compensation:

Amount of Compensation Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 24 Calculation of Compensation for Death Formula 50 X (M.W) X (R.F.) 100 or 1,20,000 whichever is more Eg . Employee M.W. (Rs.) Date of Death (By Accident) Date of Birth Rs.3,000 12/03/2000 14/07/1965 Calculation Completed Years of age on 14/07/1999 34 Relevant Factor for Age 34 199.40 Amount of Compensation 50% of Rs.3,000 X 199.40 or 1,20,000 whichever is more 50 X 3000 X 199.40 100 Rs.2,99,100 ∴ the Compensation is Rs.2,99,100

Amount of Compensation:

Amount of Compensation Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 25 Calculation of Compensation for PTD Formula 60 X (M.W) X (R.F.) 100 or 1,40,000 whichever is more Eg . Employee M.W. (Rs.) Date of PTD (By Accident) Date of Birth Rs.3,000 12/03/2000 14/07/1965 Calculation Completed Years of age on 14/07/1999 34 Relevant Factor for Age 34 199.40 Amount of Compensation 60% of Rs.3,000 X 199.40 or 1,40,000 whichever is more 60 X 3000 X 199.40 100 Rs.3,58,920 ∴ the Compensation is Rs.3,58,920

Amount of Compensation:

Amount of Compensation Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 26 Calculation of Compensation for PPD Formula 60 X (M.W) X (R.F.) 100 or 1,40,000 whichever is more Eg . Employee M.W. (Rs.) Date of PTD (By Accident) Date of Birth Rs.2,000 14/09/1999 01/08/1969 Calculation Completed Years of age on 01/08/1999 30 Relevant Factor for Age 30 207.98 Amount of Compensation 60% of Rs.2,000 X 207.98 or 1,40,000 whichever is more 60% of 60 X 2000 X 207.98 100 Rs.1,49,746 ∴ the Compensation is Rs.1,49,746

Compensation to be paid:

Compensation to be paid Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 27 When due? If employer not accept the compensation to the extent claimed - Result Time Limit for Payment As soon as it falls due-i.e., Liability for payment of compensation is fixed on employer. Should make provisional payment to the extent he accepts. Within 1 month from the due date. Payment should be deposited with Commissioner for Employees’ Compensation. If not , Commissioner direct the employer to pay the arrears with simple interest rate of 12% or as prevailing in bank. Employee having right to make any further claim. Further delay-50% of amount due will be recovered as penalty.

Review of Half-monthly Payment:

Review of Half-monthly Payment Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 28 Half-monthly Payment may be Reviewed By On Application by Commissioner Employer or Employee Application must be accompanied by Certificate of Qualified Medical Practitioner that There has been change in condition of employee On review, the half-monthly payment may be Continued Increased Decreased Ended Converted into a lump-sum

Rules Regarding Distribution of Compensation:

Rules Regarding Distribution of Compensation Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 29 Rules 1 Compensation for Death & Deposit with Commissioner If employer makes direct payment to dependants Payment of Lump-sum Compensation due to an employee/person under legal disability Not valid 2 Deceased Employee (Death of Employee) Employer may make advances payment directly to dependant Amount equal to 3 months wages of employee 3 Adult Male Worker [Totally/Partially Disabled] Employer may either Pay compensation not less than ` 10 to employee [or] Deposit with commissioner 4 Compensation amount deposited with Commissioner Employer - discharged from liability 5 Commissioner cause notice to be published/served on Dependants to appear before him for determining the distribution of compensation. 6 If Commissioner satisfied that no dependant exists Repay the balance to employer.

Rules Regarding Distribution of Compensation:

Rules Regarding Distribution of Compensation Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 30 7 If applied by employer Commissioner shall furnish compensation disbursement statement. 8 Apportionment of Compensation ( by Commissioner ) apportioned among dependants or any one of them in such proportion as he thinks fit. Commissioner may at his discretion allot compensation to any one dependant. 9 To Whom Compensation payable Person entitled 10 Lump-sum deposited with Commissioner payable to woman or person under legal disability May be invested, applied or otherwise dealt with for benefit of woman or person under legal disability as commissioner directed. 11 Half-monthly payment payable to person under legal disability Commissioner may pay to dependant or any other person whom the commissioner thinks best fitted to provide for the welfare of the employee. 12 Neglect of Children by parent/variation of circumstances of any dependant/other sufficient cause Commissioner may vary earlier orders regarding distribution/investment of compensation 13 If Commissioner vary orders as in point 12 by reason of the fact that payment of compensation obtained by fraud or impersonation or other improper – it may be recovered as arrear of land revenue.

Notice & Claim:

Notice & Claim Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 31 Notice Claim To Whom Commissioner Preferred before Commissioner By Employee Manner In Writing Time As soon as after happening of the accident Within 2 years of Occurrence of accident death Content Name & address (of person injured) The Commissioner may entertain & decide any claim ( no notice or prefer claim ) if he satisfied that even if there is failure to give notice or prefer claim cause of injury Date of accident Serving of Notice Employer/Any one of several employers /Any person responsible to employer for management of any branch of trade or business Mode of Serving Notice By delivery/regd.post

Fatal Accidents:

Fatal Accidents Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 32 Sec-10-A [Power to require from employers statements regarding Fatal Accidents] Sec-10-B [ Report of Fatal Accidents & Serious Bodily Injuries ] Commissioner receives from any source regarding fatal accident of an employee, send notice to employer Employer required to give notice about accident in his premises resulting in death/serious bodily injury send report By Regd. Post To Commissioner Require employer To Submit statement stating circumstance leading to death of employee Time Limit 7 days of accident Format Prescribed Form This section – not apply to factories to which ESI Act, 1948 applies. Time Limit Within 30 days of service of notice Further indication to be made by employer in Statement whether in his opinion, he is liable or Not liable To deposit compensation on account of death Deposit within 30 days of notice Indicate the ground for disclaimer

Medical Examination & Its Rules:

Medical Examination & Its Rules Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 33 In certain cases of accidents, an employees has to be medically examined to entitle to claim compensation Notice of accident by Employee To Whom Employer Time limit – employer arrange for Medical Examination Before expiry of 3 days from the date of service of notice Cost of Medical Examination Free of Charge Medical Examination by Qualified Medical Practitioner If employee refuse/obstruct for Medical Examination Right to compensation –suspended till refusal/obstruction Employee voluntarily leaves without examined Right to compensation – suspended till he returns & offers himself for Medical Examination Employee refused Medical Examination & subsequently dies Commissioner may, if thinks fit, direct the payment of compensation If right to compensation is suspended No compensation for suspended period. If injury of an employee aggravated due to his refusal for Medical Examination/follow instructions Entitled to compensation only for the normal injury & not for aggravated injury.

Compensation – First Charge on Assets:

Compensation – First Charge on Assets Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 34 Claim for compensation – Preferential Debt. Compensation to be first charge on assets transferred by employer Employer may attempt to transfer his immovable assets before discharging his liability to pay compensation which accrued before the date of transfer Sec.14-A creates first charge on immovable assets transferred by the employer in respect of compensation payable by him under the E.C. Act provided the liability for the compensation accrued before the date of transfer. Eg . Date of Liability accrued Date of Transfer of Assets 01-02-2013 10-02-2013

References:

References Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 35 Elements of Industrial Law – N.D.Kapoor PPTs of Hari Parmeshwar Ranjeet Kumar Yadav AFTERSCHO ☻ OL

PowerPoint Presentation:

Dr.K.Padmanabhan , Assistant Professor, BGCW, Puducherry . 36 THANK YOU