I have prepared details on WC Act for reference. Hope it will be useful fo all seeking details on subject.

REgards

Ali.

Complete Understanding of Workman’s Compensation Act in lieu of ESIC Act.

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 and it applies to railways and other transport establishments, factories^ establishments engaged in making, altering, repairing, adapting, transport or sale of any articles, mines, docks, establishments engaged in constructions, fire-brigade, plantations, oilfields and other employments listed in Schedule II of the Act. The Workmen's Compensation (Amendment) Act, 1995, has extended the scope of the Act to cover workers of newspaper establishments, drivers, cleaners, etc. working in connection with a motor vehicle, workers employed by Indian companies abroad, persons engaged in spraying or dusting of insecticides or pesticides in agricultural operations, mechanized harvesting and thrashing, horticultural operations and doing other mechanical jobs. Establishments which are covered by the Employees State Insurance Act, are outside the purview of this Act.

Employees Entitled

Every employee (including those employed through a contractor but excluding casual employee), who is engaged for the purposes of employer's business and 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.

However to determine that whether particular person is a workman or not under the Act two things must be determined viz.

(1) Whether his employment was of a casual nature; and

(2) Whether his employment was otherwise for the purpose of employer's trade or business.

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 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.

The provisions of the Act have been extended to the cooks employed in hotels, restaurants using power, liquefied petroleum gas or any other mechanical device, in the process of cooking.

Whether Contractor is a 'Workman'

The broad distribution between a workman and an independent contractor lies in this that while the former agrees him to work, the latter agrees to get other persons to work. A person who agrees himself to work and does so work and is, therefore, a workman does not cease to be such by reason merely of the fact that he gets other persons also to work along with him and that those persons are controlled and paid by him. If a person agreed to work personally, then he is a workman and the fact that he takes assistance from other persons would not affect his status."

Thus, 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.

Definitions Dependent^

The following relations of a deceased workman shall be his dependents:

(i) a widow, a minor legal [or adopted] son, an unmarried legal daughter, or a widowed mother, whether or not dependent on the workman; and

(ii) a son or a daughter, who is aged 18 years or more, who is infirm and wholly dependent on the workman at the time of his death;

(iii) any of the following persons wholly or partly dependent on the workman at the time of his death

(a) a widower, (b) a parent other than a widowed mother, (c) a minor illegal son, an unmarried illegal daughter or a daughter legal or illegal [or adopted] if married and A minor or if widowed and a minor; (d) a minor brother or and 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.

[Note: 'Son', 'daughter' or 'child' shall include an adopted son, daughter or child, respectively.]

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, whether permanent or temporary is said to be total when it 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 II of Schedule I as would be the loss of earning capacity when totaled to one hundred per cent or more. 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.

Salient Provisions

Accident Compensation-when payable

The employer of any establishment covered under this Act, is required to compensate an employee (a) 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 whether total or partial, or (b) who has contracted an occupational disease.

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. Employment should be the distinctive and the proximate cause of the injury. The three tests for determining whether an accident arose out of employment are :

(1) 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;

(2) That accident occurred at the place where he was performing his duties; and

(3) Injury must have resulted from some risk incidental to the duties of the service, or inherent in the nature or condition of employment.

The expression 'arising out of employment' is not confined to the mere nature of employment. The expression applies to employment as such — to its nature, its conditions, its obligations and its incidents. If by reason of any of those factors the workman is brought within the zone of special danger, the injury would be one which arises 'out of employment'. To put it differently, if the accident had occurred on account of a risk which is an incident of the employment, the claim for compensation must succeed, unless of course, the workman has exposed himself to an added peril by his own imprudent act.

The phrase "in the course of employment" is understood to mean that the injury has resulted during the course of employment 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. Thus, whereas 'in the course of employment' emphasizes the time when accidental injury was caused, "arising out of employment" emphasizes that there must be a casual connection between the employment and the accidental injury.

Payment of Compensation to Contract Labor

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

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.

Occupational diseases have been categorized in Parts A, B and C of Schedule III. The employer is liable to pay compensation:

(a) when a workman contract any disease specified in Part A at anytime,5

(b) 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)

(c) when a workman contracts any disease specified in Part C, while he has been in continuous service for a specified period, 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).

Compensation-when not payable

The employer is, however not liable to pay compensation for the injury to an employee under any of the following circumstances:

(i) When injury does not cause total/partial disablement for more than 3 days;

(ii) When injury, not resulting in death [or permanent total disablement] is directly attributable to employee's willful disobedience of the safety rules, or disregard of the safety devices, or the employee having been under the influence of drink or drugs.

The burden of proving intentional disobedience on the part of the employee shall lie upon the employer. Where an employee received eye injury for not using goggles supplied by employer and where it was not established that the employee was not using the goggles intentionally and in willful disobedience of the orders, the employer was held to be liable to pay compensation.

(iii) When the employee has contacted a disease which is not directly attributable to a specific injury caused by the accident or to that occupation or

(iv) When the employee has filed a suit for damages against the employer or any other person, in a Civil Court.

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.

Amount of Compensation

The amount of compensation payable by the employer shall be calculated as follows:1







(a) In case of death : 50% of the monthly wages x Relevant Factor or Rs. 50.000/-, whichever is more and Rs. 1000 for funeral expenses.

(b) In case of total permanent disablement specified under Sche¬dule I, 60% of the monthly wages x Relevant Factor or Rs. 60,000/- whichever is more.

(c) In case of partial permanent disablement specified under Sche¬dule I, Such percentage of the compensation payable in case (b) above as is the percentage of the loss in earning capacity (specified in Schedule I)

(d) In case of partial permanent disablement not specified under Schedule I, such percentage of compensation is payable in case (b) above, as is proportionate to the loss of earning capacity ( as assessed by a qualified medical practitioner).

(e) In case of temporary disablement (whether total or partial), A half-monthly installment equal to 25% of the monthly wages, for the period of disablement or 5 years, whichever is shorter.

Notes:

(i) 'Relevant Factor' for calculation of the amount of compensation have been specified in Schedule IV of the Act.

(ii) Where the monthly wages of an employee exceed Rs. 2000/-; his monthly wages for the purposes of case (a) and (b) above, shall be deemed to be Rs. 2000/- only, (iii) 'Monthly wages' for this purpose means

(a) Where the workman has been in continuous service of the employer for a period of at least 12 months preceding the accident.

Total wages due for the last 12 months

Monthly Wages = ----------------------------------------------------

12

(b) Where the workman has been in continuous service of the employer for a period of less than 12 months, preceding the accident:

Total wages due to the period of

12 months preceding the accident

being earned by a similar workman

(i.e. on same work)

Monthly Wages = ------------------------------------------------------

12

(c) In any other case :

Total wages earned in the last continuous period of service

Monthly Wages = ----------------------------------------------------------------------------- x 30

Number of Days in such period

Continuous service shall be a period of service not interrupted by absence from work for a period exceeding 14 days.

(iv) 'Wages' for the purposes of this Act, includes any benefit or perquisite expressible in terms of money but excludes traveling allowance / concession, employer's contribution to pension or provident fund or a sum paid to cover any special expenses incidental to his employment. The definition of wages is very comprehensive. It includes bonus, night out allowance, dearness allowance, gratuity, free quarter, food allowance, overtime.

Contracting Out

Any contract or agreement which makes the workman give up or reduce his right to compensation from the employer is null and void insofar as it aims at reducing or removing the liability of the employer to pay compensation under the Act.


From India, Hyderabad
Hello Farz:
Many thanks for all your efforts on that article & it is very kind of you to post it on the forum. I request you to also let us know if the cieling limit of compensation has been enhanced.
SAI_KIRAN

From India, Hyderabad
(a) In case of death : 50% of the monthly wages x Relevant Factor or Rs. 50.000/-, whichever is more and Rs. 1000 for funeral expenses.
(b) In case of total permanent disablement specified under Sche¬dule I, 60% of the monthly wages x Relevant Factor or Rs. 60,000/- whichever is more.
Please let me know if these figures are still valid or they have been enhanced. This is urgent!
SAI_KIRAN

From India, Hyderabad
Hi
I am sorry for the delay in reply.
The latest changes which I know is ..
(a) In case of death : 50% of the monthly wages x Relevant Factor or Rs. 80.000/-, whichever is more and Rs. 1000 for funeral expenses.
(b) In case of total permanent disablement specified under Sche¬dule I, 60% of the monthly wages x Relevant Factor or Rs. 90,000/- whichever is more.
Hope this will help you but verify this with somebody. As far as I know there is no chages.
Regards
Ali

From India, Hyderabad
Employee- Workmen's Compensation Workmen's CompensationThe Indian Workmen's Compensation Act 1923 provides for the payment of compensation by the employer to his employees (for their dependents in the event of fatal accidents) if personal injury is caused to them by accidents arising out of and in the course of their employment.

The maximum compensation payable is upon the following scale (as per W.C. Amendment Act 2000)
  • Fatal Injury - Rs.4,57,080
  • Permanent Total Disablement - Rs.5,48,496
  • Permanent Partial Disablement - According to incapacity caused
  • Temporary Disablement - Rs. 2000 per month upto a period of 5 years
Bajaj Allianz General Insurance Company Limited policies give an employer any of the following two forms of cover :

Indemnity against the Employers legal liability to his Employees under the Indian Workmen's Compensation Act 1923, and subsequent Amendments of the said Act prior to the date of issue of the policy, under the Indian Fatal Accidents Act, 1855, and at common Law.

Indemnity against the Employers legal liability to his Employees under the Indian Fatal Accidents Act, 1855 and at common law.

In addition, the company bears the costs and expenses incurred with its written consent in the settlement of claims.
  • The insurance under table "A"can be extended by charging an additional premium of 50% of book rate to cover disease mentioned in part 'C' of Schedule III of Workmen's Compensation Act.
  • This insurance does not cover any interest and/or penalty which may be imposed on all insured or an insured on account of failure to comply with the requirements of the said Workmen's Compensation Act, 1923 as amended.
Dear Ali ,
  • can u explain above calculation

From India, Pune
Dear Seniors,
Greetings For The Day.
I am pursuing PG Diploma In IRPM. Now its time for me to do the project report. I am planning to choose Industrial Safety in Indian Industry or Industrial relations in indian industry or Labour Legislation VS Industrial relations. Either of one from three topics. I need your help in completing my project report.
Please guide me where the source of information will be available or send me any project report on these topics for brief idea. My mail id is .
With Regards
V.S.Srikanth
+91-9440078039

From India, Nellore
Workmen’s Compensation (Amendment) Bill, 2009 has been passed by both the Houses of the Parliament. It is to take form of an Act after getting the President’s assent.

The main recommendations of the Bill were –

Renaming the Workmen’s Compensation Act, 1923 as the Employee’s Compensation Act to make it gender sensitive.

Raising the compensation paid to the workers and their family members in case of death to Rs. 1.2 lakh from current Rs. 80,000.

Raising the compensation for permanent disability to Rs. 1.4 lakh from present Rs. 90,000. Also the funeral expenses were proposed to be raised to Rs. 5,000 from Rs. 2,500.

The Bill also proposed to empower the Central Government to specify monthly wages for the purpose of compensation and timely enhancement of the minimum rates of compensation.

Besides this the Bill even contained a provision for actual reimbursement of medical expenses incurred on account of injury caused during course of employment. There were provisions for disposal of compensation cases by Commission within a time period of 3 months.

From India, Hyderabad
Whether Workmen Compensation Act is applicable to Shop & Establishments registered under Shop Act ? What is the minimum manpower strength is required for this act applicability ? If the family members received EDLI benefit upon the onduty death of employee, in that case whether WC act applies ?
Pramod Thakar

From India, Pune
Hi..Please help us to handle the situation
An employee had met with an accident & lost his toe, considered as permanent partial disablement
The company has paid all his (medical expenses, inpatient treatment, surgery & new plastic toe) & also paid his salary for all his leaves without any deductions which came around Rs. 2,00,000 /-
Still under compensation formula its been calculated as
Monthly wage = Rs. 9680 or Minimum Rs. 8000 (which ever is minimum)
Percentage of Disability = Loss of Toe = 40 % disability
% of loss of earning capacity = 60 % for Permanent Partial Disablement
Relevant Factor = His DOB = 17.05.1986 = Age = 27 years for which RF = 213.57
Compensation Amount = 8000 X 0.4 X 0.6 X 213.57 = Rs. 4, 10, 054 /-
Kindly suggest which how much we need to pay through workmen compensation still. And what is the procedure for that.

From India, Chennai
whether workman compensation act applicable to the employer where there are only 5 people working?since none on my emplyess have any benefits like epf , esi,edli what will happen if my staff meets an accident at workplace or if he dies? will i have to pay compenation and how much and what if i buy a life insurance policy for my employees for death benefit is that ok? please somebody help on this?
From India, Ulhasnagar
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