Prepared By:

Rachna Kejriwal
Smriti Agrewal
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 . The
Workmen's Compensation (Amendment) Act,
2000. has brought all the workers within its
ambit irrespective of their nature of employment
i.e. whether employed on casual basis or
otherwise than for the purposes of the employer's
trade or business. For the first time, casual
labourers will be provided compensation for
death or disability. . Establishments which are
covered by the Employees State Insurance Act, are
outside the perview of this Act.
The coverage of this act is also to cooks
employed in hotels and resturants.
Employees Entitled
 Every employee including those employed through a
contractor and also casual employees, 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. ' 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 a
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.
Employees Entitled
Whether Contractor is a Workman ?

 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
Administrative Authority
 The State Governments administer the provisions of
this Act through the Commissioners appointed for
specified areas. The State Governments also make
rules for ensuring that the provisions of the Act are
complied with.
Administrative Authority
 Jurisdiction of Commissioner Any matter under this Act, to be
done by or before a Commissioner, shall be done by or before
the Commissioner for the area in which
 (a) the accident resulting in the injury, took place or
 (b) the workman, or his dependent, claiming the compensation
ordinarily resides, or
 (c) the employer has his registered office.
 Where a Commissioner is satisfied that any proceedings can be
more conveniently disposed of by any other Commissioner, he
may transfer the matter to such other Commissioner.
Definition
DEPENDANT –

Dependant means any of the following relatives of a

deceased workman, namely:
 a widow, a minor legitimate or adopted son and unmarried
legitimate or adopted daughter, or a widowed mother, and
 if wholly dependant on the earnings of the workman at the

time of his death,

 a son or a daughter who has attained the age of 18 years and

who is infirm,
 And any of the following wholly or partly dependent on the

workman at the time of his death—

 a widower, a parent other than a widowed mother, a minor

illegitimate son, a unmarried illegitimate daughter, a

widowed daughter in law, a minor child of the deceased son
& daughter & a paternal grandparent if not the parent of the
workman is alive.
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..,
Accident Compensation-when payable
The employer of any establishment covered under
this Act, is required to compensate an employee:
 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
 who has contracted an occupational disease accident
arising out of and in the course of Employment

 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.
What are the condition for receiving compensation for
Personal Injury caused by the accident ?

 The three tests for determining whether an accident arose out

of employment are :
 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;
 That accident occurred at the place where he was performing
his duties; and
 Injury must have resulted from some risk incidental to the
duties of the service, or inherent in the nature or condition of
employment.
When is an Employer not liable to pay
compensation ?

BUT, the employer shall not be liable to pay compensation

in the following cases:

 if the injury did not result in total or partial disablement of a

workman for a period exceeding three days,
 if the workman was at the time of the accident under the
influence of drink of drug, or
 if the workman willfully disobeyed an order expressly given
or a rule expressly framed for the purpose of securing safety
of workman, or
 If the workman willfully removed or disregarded any safety
guard or other device which to his knowledge was provided
for the purpose of securing his safety.
AMOUNT OF COMPENSATION –
section 4:
The amount of compensation payable to a workman
depends on

 the nature of injury caused by accident,

 the monthly wages of the workman concerned, and
 the relevant factor for working out lump sum
equivalent of compensation amount as specified in
Schedule IV.

There is no distinction between an adult and a minor

worker with respect to the amount of compensation.
COMPENSATION FOR DEATH
 In case of death resulting from injury, the amount of
compensation shall be equal 50% of the monthly wages of
the deceased workman multiplied by
the relevant factor.

 Or an amount of Rs 80,000/- whichever is more.

 Example:
 A workman is employed in a factory on a monthly wage of Rs
3000. While working he met with an accident and dies on oct
2000. His date of birth is july 18 , 1970. The amount of
compensation payable to his dependent would be

50* monthly wages* Relevant factor of age 30

100

0r 80,000 whichever is higher

50* 3000* 207.98 = 3,11,970

100

Since Rs 311970 is more than 80000 the compensation payable

to him shall be Rs 311,970
COMPENSATION FOR PERMANENT
TOTAL DISABLEMENT

In case of permanent total disablement resulting from the

injury, the amount of compensation shall be 60% of the
monthly wages of the injured workman multiplied by the
relevant factor or Rs 90,000/- thousand whichever is
more.

For the above example the compensation would be

60* 3000* 207.98 = 3,74,365

100

Since Rs 3,74364 is more than 90,000 the amount of

compensation payable should be Rs 3, 74364
Example:
 A worker whose monthly wages is RS 3000 loses one eye AS
A result of Injury caused to him on Nov 15, 1995. On Oct 1,
1995. He had completed 20 years of age. The amount of
compensation payable to him would be

40% of 60* 3000* 224 = Rs. 1,61,280

100
COMPENSATION TO BE PAID WHEN DUE
AND PENALTY FOR DEFAULT (section 4A)

 As per this section, compensation has to paid as soon as it is

due

 In case the employer does not accept the liability of paying the
compensation, he is bound to make provisional payment
to the extent of the liability he accepts. Such amount has
to be deposited with the commissioner or paid to the
workman. If he defaults, the commissioner may order:

 the payment of the amount with interest at12 % per year

 if the default to be unjustifiable then the commissioner
may order payment of a further sum not exceeding 50%
of the amount due, by way of penalty.
Payment of Compensation to
Contract Labour
 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.
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.
Mode of Payment
 The employer becomes liable to pay the compensation as
soon as the personal injury was caused to the workman by the
accident which arose out of and in the course of the
employment.

 The amount of compensation should be paid as soon as it

falls due. It will be computed on the date of accident. If the
amount is not paid within one month from the date it fell due,
the Commissioner may after giving reasonable opportunity of
being heard, direct the employer to pay simple interest @
12% p.a. or at such higher rate as may be specified not
exceeding the.

The half-monthly installments of compensation (payable in

case of temporary disablement) should be paid within the
time specified. The half-monthly installments can be
converted into a lump sum payment, by an agreement
between the employer and the employee or by applying to the
Commissioner.
Notice of Accident
 A 'notice of accident' should be sent to the Commissioner, by
the concerned employee as soon as practicable after the
happening thereof. The notice should contain such particulars
as the name and address of the person injured, the date and
cause of accident, etc. A Copy of the notice should also be
sent to the establishment wherein he was employed. The
notice of accident may be served either personally or by
registered post or by means of an entry in the notice-book
maintained by the employer.
Obligations of Employers
 To pay compensation for an accident suffered by an employee, in
accordance with the Act.

 To submit a statement to the Commissioner (within 30 days of

receiving the notice) in the prescribed form, giving the
circumstances attending the death of a workman as result of an
accident and indicating whether he is liable to deposit any
compensation for the same.

 To submit accident report to the Commissioner in the prescribed

form within 7 days of the accident which results in death of a
workman or a serious bodily injury to a workman.

 To maintain a notice book in the prescribed from at a place where it

is readily accessible to the workman.

 To submit an annual return of accidents specifying the number of

injuries for which compensation has been paid during the year, the
amount of such compensation and other prescribed particulars.
Obligations of Employees
 To send a notice of the accident in the prescribed form, to the
Commissioner and the employer, within such time as soon as
it is practicable for him. This notice is precondition for the
admission of the claim for compensation.

 To present-himself for medical examination, if required by the

employer.