Query Regarding Employee Compensation Act, 1923
My query is regarding the Employee Compensation Act, 1923. Does an engineer working in a private limited company fall under the definition of "Employee" under the Employee Compensation Act, 1923, or the Industrial Disputes Act, 1947?
1. Is a software engineer employed by a software company (private limited) considered an employee under the Employee Compensation Act, 1923?
2. Is a telecom engineer providing technical expertise to a telecom company considered an "employee" under the Employee Compensation Act, 1923?
If they do not fall under the purview of the Employee Compensation Act, 1923, how should compensation be calculated in the event of an engineer's death while in service in the above cases? Kindly provide any examples of compensation calculations in the case of an employee's death by courts or companies in India.
From India, Delhi
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My query is regarding the Employee Compensation Act, 1923. Does an engineer working in a private limited company fall under the definition of "Employee" under the Employee Compensation Act, 1923, or the Industrial Disputes Act, 1947?
1. Is a software engineer employed by a software company (private limited) considered an employee under the Employee Compensation Act, 1923?
2. Is a telecom engineer providing technical expertise to a telecom company considered an "employee" under the Employee Compensation Act, 1923?
If they do not fall under the purview of the Employee Compensation Act, 1923, how should compensation be calculated in the event of an engineer's death while in service in the above cases? Kindly provide any examples of compensation calculations in the case of an employee's death by courts or companies in India.
From India, Delhi
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Employee Compensation Calculation Under the Act
The engineer in both cases will be an employee under the Employee Compensation Act, and the calculation shall be done on the basis of the age factor as mentioned in the schedule attached to the Act, multiplied by 50% of monthly wages. If the salary is above Rs 8000, then it will be treated as Rs 8000.
Regards
From India, Delhi
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93The engineer in both cases will be an employee under the Employee Compensation Act, and the calculation shall be done on the basis of the age factor as mentioned in the schedule attached to the Act, multiplied by 50% of monthly wages. If the salary is above Rs 8000, then it will be treated as Rs 8000.
Regards
From India, Delhi
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Let me first address your query regarding whether a Software Engineer would be considered an "employee" under the Employees Compensation Act, 1923.
Please refer to the definition given in the Act after the latest amendment in 2009 under section 2(1)(dd). The definition, comprising three parts, states who an employee is and clearly distinguishes who is not an employee based on their capacity of employment.
As per the first part in clause (i), a railway servant not permanently employed in any administrative district or sub-divisional office and not employed in any such capacity specified in Schedule II is an "employee" under the Act. Similarly, as per the second part in clause (i)(a), a master, seaman, or other member of the crew of a ship registered in India, a captain, or other member of an aircraft registered in India, a person recruited as a driver, helper, mechanic, cleaner, or in any other capacity in connection with a motor vehicle registered in India, and a person recruited for work abroad by a company registered in India are employees under the Act. Finally, the third part in clause (ii) defines that any person employed in any such capacity as specified in Schedule II, other than any person working in the capacity of a member of the Armed Forces of the Union, is an "employee."
From the above, it is discernible that a common thread running through the entire definition is "the capacity of employment" specified in Schedule II. Therefore, to be an "employee" under the Act, a person must be:
1. Employed by an employer, meaning there must be a master and servant relationship.
2. Employed for purposes of trade or business, even if it is of a casual nature, and not merely of a casual nature.
3. Either a railway servant subject to the qualifications mentioned or employed in any one of the capacities specified in Schedule II.
4. Not a member of the Armed Forces.
Thus, it is clear that all these four conditions must be satisfied before a person can be said to be an employee under the Act.
In this connection, the following observations of the Division Bench of the Hon'ble High Court of Calcutta in its judgment in Ukhara Farming Corporation Ltd v. Satu Bala Bagini [1954 (II) LLJ-406] would shed more light: "It is to be noticed that the language of the definition is not that the term 'workman' includes certain classes of persons, but that it means them. In other words, the definition is exhaustive. If so, in order that a person may claim to be a workman within the meaning of the Act, he must, if he is not a railway servant and therefore does not come under clause (i) of the definition section, prove that he comes under one or other of the clauses set out in Schedule II."
While dealing with the question of whether a watchman working under the Official Liquidator could be a workman in Official Liquidator v. K.S.E Board [1990 (II) LLJ-321], the Hon'ble High Court of Kerala observed as follows, quoting the above judgment and others in this regard: "The words 'in any such capacity' as are specified in Schedule II clearly indicate that the list given in Schedule II is exhaustive and not illustrative. If the employment is one that would not come under any of the categories mentioned in Schedule II, the definition of workman cannot be applied to such employment."
Therefore, the inescapable conclusion, in light of the foregoing analysis, is that a Software Engineer is not an employee under the Employees Compensation Act, 1923.
Regards,
From India, Salem
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Please refer to the definition given in the Act after the latest amendment in 2009 under section 2(1)(dd). The definition, comprising three parts, states who an employee is and clearly distinguishes who is not an employee based on their capacity of employment.
As per the first part in clause (i), a railway servant not permanently employed in any administrative district or sub-divisional office and not employed in any such capacity specified in Schedule II is an "employee" under the Act. Similarly, as per the second part in clause (i)(a), a master, seaman, or other member of the crew of a ship registered in India, a captain, or other member of an aircraft registered in India, a person recruited as a driver, helper, mechanic, cleaner, or in any other capacity in connection with a motor vehicle registered in India, and a person recruited for work abroad by a company registered in India are employees under the Act. Finally, the third part in clause (ii) defines that any person employed in any such capacity as specified in Schedule II, other than any person working in the capacity of a member of the Armed Forces of the Union, is an "employee."
From the above, it is discernible that a common thread running through the entire definition is "the capacity of employment" specified in Schedule II. Therefore, to be an "employee" under the Act, a person must be:
1. Employed by an employer, meaning there must be a master and servant relationship.
2. Employed for purposes of trade or business, even if it is of a casual nature, and not merely of a casual nature.
3. Either a railway servant subject to the qualifications mentioned or employed in any one of the capacities specified in Schedule II.
4. Not a member of the Armed Forces.
Thus, it is clear that all these four conditions must be satisfied before a person can be said to be an employee under the Act.
In this connection, the following observations of the Division Bench of the Hon'ble High Court of Calcutta in its judgment in Ukhara Farming Corporation Ltd v. Satu Bala Bagini [1954 (II) LLJ-406] would shed more light: "It is to be noticed that the language of the definition is not that the term 'workman' includes certain classes of persons, but that it means them. In other words, the definition is exhaustive. If so, in order that a person may claim to be a workman within the meaning of the Act, he must, if he is not a railway servant and therefore does not come under clause (i) of the definition section, prove that he comes under one or other of the clauses set out in Schedule II."
While dealing with the question of whether a watchman working under the Official Liquidator could be a workman in Official Liquidator v. K.S.E Board [1990 (II) LLJ-321], the Hon'ble High Court of Kerala observed as follows, quoting the above judgment and others in this regard: "The words 'in any such capacity' as are specified in Schedule II clearly indicate that the list given in Schedule II is exhaustive and not illustrative. If the employment is one that would not come under any of the categories mentioned in Schedule II, the definition of workman cannot be applied to such employment."
Therefore, the inescapable conclusion, in light of the foregoing analysis, is that a Software Engineer is not an employee under the Employees Compensation Act, 1923.
Regards,
From India, Salem
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Employee's Compensation Act-2009.pdf
THE EMPLOYEE COMPENSATION ACT.docx