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While working under hazardous situations, employees are prone to certain physical injuries and illness that can cost even their life. Those who are working in factories and mines at low wages may not be able to pay for medical expenses incurred for injuries, illness or accident caused during employment. It not only puts the life of employees at risk but also causes a major setback to their dependents. Employees are a valuable asset for the organizations, and thus, the onus is on the employers to provide compensation in such cases of injuries and illness.

Employees entitled under the Workmen Compensation Act 1923

The Workmen Compensation Act 1923 makes it mandatory for employers to pay compensation to its employees working under hazardous situations. Under Schedule II of the Act, Workmen Compensation Insurance is mandatory for employers of factories, plantations, mines, construction works, mechanically propelled vehicles and other unsafe occupations to safeguard the occupational rights of their workmen.

The provisions of this Act also extend to those who are dealing with Liquefied Petroleum Gas and other such mechanical devices like chefs in restaurants and hotels.

The Ministry of Labor and Employment in India takes care of the framework of this act and also ensures the implementation of various workers’ security schemes.

An employer is liable to pay compensation when

  • Personal injury that leads to partial or complete disablement of employees for more than three years
  • Disablement can be permanent total disablement, permanent partial disablement or temporary disablement
  • If the workmen contract any disease pertaining to certain occupational situations. Occupational diseases to be covered under the Workmen Compensation Act are specified in Schedule III of the Act.
  • In case of accidents arising in the course of employment
  • Injury or accident at the workplace leading to death

Employers are not liable to pay compensation when:

  • Workmen are under the influence of drugs or alcohol at the time of injury
  • There is a willful disobedience or disregard of safety guidelines by workmen, issued well in advance for their safety and security
  • Any injury or accident caused as a result of war or nuclear attacks
  • Any disease that is not directly attributable to specific injury or accident at the workplace
  • The employee has filed a suit for damage against the employer in the Civil Court

Tests to qualify for compensation under the Act

  • At the time of accident, a workmen must be employed in the work of the employer
  • The accident should occur in the premises specified by the employer for work
  • The injury must be related to the hazardous nature of the occupation

The expression ‘in the course of employment’ stands for

‘In the course of employment’ stands not only for the actual work hour and work place but also extends to include other necessary engagements to it. As per the doctrine of notional extension, in the case of extension, the course of employment continues even when an employee has left the office premises or has not entered into the premises yet. Employees who need to travel as a part of their work profile are liable for compensation under the Workmen Compensation Act. The notion of ‘in the course of employment’ expands to include such after-office activities that benefit the employers, but can be hazardous for the health of employees.

Who qualifies as dependents under the Act?

Dependents are those people who were totally or partially relying upon the wages of the workmen at the time of his or her death.

i. Family members like a widow, an unmarried legal daughter, a minor legal son, a widowed mother whether or not dependent upon the deceased workmen

ii. A son or a daughter who has attained the age of 18 years but is infirm, in the case when he or she is wholly dependent upon the income of the workmen

iii. A widower, a minor illegitimate son, an unmarried illegitimate daughter, a parent other than the widowed mother

Employer’s liability to pay compensation to contract labor

An employer is as liable to pay compensation to its contract labor as to its departmental labor. However, the employer is not accountable to pay the penalty that is subject to levy or any form of interest under the Act.

Though there is no official body in India to track the number of occupational injuries in industries every year, there is frequent news of workplace accidents taking a toll on the lives of thousands of employees now and then. According to data released by National Crime Records Bureau (NCRB), Gujarat registered the largest number of deaths from industrial injuries in 2014. As per an estimate by ILO in 2005, India witnessed 40,133 fatal accidents in industries along with around 2,61,891 lethal diseases related to the hazardous workplace. Such alarming trends further highlight the importance of industry employers getting coverage for their employees under workmen compensation insurance policies.


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Category Corporate Law   Report

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