The Worker’s Compensation Act, 1923

Worker’s Compensation Act is now Employee’s Compensation Act, 1923. In the long title to the Workmen’s Compensation Act,1923, for the world “workmen”, the word “employees” has been substituted, and throughout the Act the word “workmen” is replaced by the word “employees”.

This amendment has been done by the Workmen’s Compensation Act,2009 and the definition of employee includes clerical employees and casual employees also.

The Employee’s Compensation Act, 1923 is one of the earliest labour welfare and social security legislation enacted in India. It recognizes the fact that if an employee is a victim of accident or an occupational disease in course of his employment, he need to be compensated.

The Act does not apply to those workers who are insured under the Employees State Insurance Act, 1948. Section 53 of the Employee’s State Insurance Act provides, “An insured person or his dependents shall not be entitled to receive or recover, Whether from the employer of the insured person or from any other person, any compensation or damage under the employees’ Compensation Act, 1923 or any other law for the time by the insured person as an employee under this Act”.

Worker's Compensation Act

Objectives of the Worker’s Compensation Act

  1. To consider compensation payable by an employer to his employee in case of an accident as a measure of relief and social security.
  2. To enable an employee to get compensation irrespective of his negligence.
  3. To lay down the various amounts payable in case of an accident, depending upon the type and extent of injury. The employer now knows the amount of compensation he has to pay and is saved of many uncertainties to which he was subjected before the Act came into force.

Short Title and Commencement of Worker’s Compensation Act

  1. This Act may called the Employee’s Compensation Act, 1923.
  2. It extends to the whole of India.
  3. It shall come into force on the first day of July, 1924.

Cases Where Employer is Not Liable

1. In respect of any injury which does not result in the total or partial disablement of the employees for a period exceeding three days [Section 3(1)(a)];

2. In respect of any injury not resulting in death or permanent total disablement caused by an accident which is directly attributable to:

  1. The employee having been at the time thereof under the influence of drink or drugs,or
  2. The willful disobedience of the employee to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of employee.
  3. The wilful removal or disregard by the employee of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of employee.
  4. When the employee has contracted a disease which is not directly attributable to a specific injury caused by accident or to the occupation [Section 3 (4)].
  5. When the employee has filed a suit for damages against the employer or any other person, in a Civil Court [Section 3(5)].

Amount of Compensation [Section 4]

Section 4 of the Act prescribes the amount of compensation payable under the provisions of the Act. The amount of compensation payable to an employee depends on:

  1. The nature of the injury caused by accident.
  2. The monthly wages of the employees concerned, and
  3. 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 workers with respect to the amount of compensation.