Employees compensation act 1923

Employees Compensation Act,
1923 (E.C.Act, 1923)
Dr.K.PADMANABHAN
Assistant Professor of Corporate Secretaryship
Bharathidasan Govt. College for Women (Autonomous)
Puducherry-605 003.

Note
This PPT is prepared for the U.G. Students with a view
to simplify the lengthy paragraphs.
Your feed back & suggestions are invited for
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[drkpnabhan@rediffmail.com; 919842793943]
2

Dr.K.Padmanabhan, Assistant Professor, BGCW,
Puducherry.

Objective of the Act
Objective of The E.C. Act, 1923
To provide Relief to
Workmen

and/or their

Dependants

if workmen
Dead

Disabled

due to accidents arising out of and in the course of employment

3

Dr.K.Padmanabhan, Assistant Professor, BGCW, Puducherry.

Defences Available to Employers Before Passing E.C.Act, 1923
Doctrine
Risk

of

Assumed ‘volenti non fit injuria’-Where there is consent
there is not injury.
Employer not liable to pay compensation to
employee for injury

Doctrine of
Employment

Common

Worker injured by some
Worker working with
act or omission of some
several persons for
of the persons of his
common purpose.
group.

Employee not entitled to compensation for injury
Doctrine of
caused by his own negligence. (Employer not
Contributory Negligence responsible for negligence on the part of
employees).
End of Personal Action Personal Action (of employee) came to an end
with Death
due to death of employee.
4


Ways Open to Employees for Claiming Compensation

Injured employee
may

File a Civil suit or

Employee
choice
Claim compensation between these
under E.C.Act,1923 two reliefs.

Employee cannot file a suit for damages in any Court
of Law if
He
filed
E.C.Act,1923

claim

Existence of agreement between
under employee & employer for payment
of
compensation
as
per
E.C.Act,1923.

Comparison
Civil Suit

E.C.Act, 1923

Risky & costly

5

Employer can put forward all Safe & less costly.
defences available to him under
law of torts. Dr.K.Padmanabhan, Assistant Professor, BGCW, Puducherry.

Scope & Coverage of the Act
Extends to whole of India
Applies to employees employed in
Not apply to
Factories

members of Armed Forces of
Union

Mines

Employees covered by ESI Act,
1948.
(Dependants’
Benefit
available)

Plantations
Transport Establishments
Construction works
Railways

Casual workers & workers
employed otherwise than for
employer’s trade or business.

Ships
Circuses
6


Definitions
Explanation
Commissioner for
Sec.2(1)(b) Commissioner Employees Compensation
appointed u/s.20.
Compensation as
Sec.2(1)(c) Compensation
provided for by this Act.
Person who depends upon
Sec.2(1)(d) Dependant
another for his livlihood.
(General Meaning).
Section

7

Term


Dependant
Dependants-whether actually
so or not.

Wholly Dependant on the Dependants-Wholly or in Part
earnings of the Employee at Dependant on the earnings of the
Employee at the time of death.
the time of death.

Widow

Widower

Minor legitimate or adopted son.

Parent other than a Widowed
Mother.

Unmarried legitimate or adopted
daughter or

Minor illegitimate son

Widowed Mother

Unmarried
illegitimated
daughter or daughter legitimate
or illegitimate or adopted or
adopted if married & a minor or
Son or Daughter attained 18 if widowed & a minor.
years of age and infirm.
Minor brother or unmarried
sister or a widowed sister if
minor.
Minor child of pre-deceased son.

Minor child of pre-deceased
daughter where no parent of
child alive or.
8

Puducherry.

Paternal grandparent if no parent
of the employee is alive.

Definitions

Employer-Sec.2(1)(e):”Employer” includes
• Any body of persons whether incorporated or not;
• Any managing agent of an employer; and
• The legal representative of a deceased employer.

Disablement:
Loss of capacity to work or to move.
Disablement of an employee may result in loss or

reduction of his earning capacity. (Not able to earn as
much as worker used to earn before his disablement).
[Eg.Before Disablement-Rs.200; After DisablementRs.100]
9


Definitions
Employer-Sec.2(1)(e): Employer includes
Body
of
persons
Legal Representative
Managing Agent
whether incorporated
of
a
deceased
of an employer.
or not.
employer.

Disablement
Loss of capacity to work or to move.

Result
loss

reduction (Not able to earn as much as worker
used to earn before his disablement)

of earning capacity of employee.
10


Disablement
Disablement of an employee may result in
loss
or
reduction
of his earning capacity

Partial Disablement

Total Disablement
[Temporary/Permanent]

Reduces earning capacity
Temporary Partial
Disablement
Reduces
earning
capacity
of
an
employee in ANY
EMPLOYMENT
he was engaged at
the time of accident.
11

Permanent Partial
Disablement
Reduces
earning
capacity
of
an
employee in EVERY
EMPLOYMENT he
was
capable
of
undertaking at the time
of injury.

Incapacitates
an
employee
for
ALL
WORK he was capable
of performing at the time
of accident.


Definition

12

Employees-Sec.2(1)(n)
Master,
Seaman
/other
member of crew of ship
Captain/other member
crew of aircraft

Not
permanently
employed
in
any
administrative, district
or sub-divisional office
of railway & not
employed in capacity
as
specified
in
Schedule-II

of

Puducherry.

Railway Servant

Driver, helper mechanic,
cleaner or in any capacity in Employed
in
connection
with
motor any capacity as
vehicle.

specified
in
Person recruited for work Schedule-II.
abroad
by
companyemployed outside India in any
capacity
specified
in
Schedule-II. (Ship, aircraft/
motor vehicle/company –
registered in India.

Not include – employment of casual nature.[Casual Nature-Not regular/continuous]

Rules Regarding Employees' Compensation
Employer’s Liability for Compensation:
Employer is liable to pay compensation to an employee
[Accident & Occupational Diseases]
For personal injury caused to For any occupational disease
employee by accident.
contacted by employee.

Accident
Occupational Disease
Arising out of (due to- Exposed to certain diseases
reason) & in the course of inherent in those occupations.
(during-time) employment.

13


Employer’s Liability & Non-Liability to Pay Compensation

14

Employer
Not Liable to Pay Compensation
Liable to Pay Compensation

For Injury caused to an employee by accident
arising out of & in the course of employment – if

not result in

Occupational
Disease

Accident

Total

[a]Injury

Partial

Disablement
Exceeding 3 days.

arising out of and in
exposed
to [b]Workman
the
course
of
influence of
employment, resulting certain diseases
inherent in those drug
into
Disablement

occupations

Under [b] & [c] not liable to pay
compensation not apply in case of
workmen dead. (i.e.Employer Liable to
pay compensation)

[c]Workman
willfully

Death

under
At the time of
drink/

disobeyed

accident .

Safety Rules

Safety guard /
removed /
disregarded other device


Sec 3(1) Linkages

• personal injury
by
• accident

event

15

context
• arising out of
and in the
course
• employment

• employer
liable to pay
employee
• compensation


result

Personal Injury by Accident
Eg.

1

2

16

Fact of the Case
Decision
Employee in course of his duties,
frequently to go into a heating room Accident
[Death
& from there to a cooling room. One was due to personal
night he went into the cooling room, Injury]
he got phenumonia of which he dies.

Death is result of an
Person becomes insane as a result of accident.
an accident & then commits suicide. [compensation to be
awarded].


Arising out of & in the course of employment

17

"Arising Out Of and In The Course Of Employment”
Arise Out of Employment

In the Course of Employment

Nexus
[connectivity]
must
be Employee is helping the employer's business
established between the accident and goals in doing the activity where the injury
the employment
occurred.
Conditions
Injury resulted from risk incidental to
the duties of service. [Injury- during
the course of employment].
Time during which employment continues.
At the time of injury-worker engaged
in business of employer. [Not involved
for his personal advantage or benefit].
[emphasizes that there must be a
[emphasizes the time when accidental injury
casual connection between the
was caused]
employment and the accidental injury]
arising out of - suggests the cause of in the course of - refers to the time, place,
the accident
and circumstances of the accident


These words refer to the link between the cause of the accident and the employment.

Theory of Notional Extension
Concept: Employer is liable for injury to his employee even when
the employee is away from the premises at the time of accident.
General Rule

Employment of an employee does
Not commence until he reached Not continue When he left the place
place of employment.
of employment.
The journey to & from the place of work excluded.

But Theory of Notional Extension
Included the journey to & from the place of work.
[Going to work place from residence or while returning from work place to
residence].
If the employee dies due to accident while going to work place from
residence or while returning from work place to residence, as an accident
arising out of and during the course of employment and as such entitled for
compensation.[Theory of Notional Extension]
18


Cases of Accidents Arising Out of & In the Course of Employment
Case
A railway employee was ordered to travel
to a certain station to repair a water main.
When he had finished the work & was
crossing the platform to catch the train, he
slipped & died as a result.

Accident Arose out of & in the course of
employment



A watchman in the course of his duty lifted
G.I.Pipe in order to keep it in a safe place.
While doing so, he received injury.



An employee suffered from heart disease
& died on account of strain of work by
keeping continuously standing or walking.



An employee suffering from heart
disease after having worked for 8
hours on a hot day in a mill collapsed.
There was evidence to the effect that
collapse was likely to have been
caused by strain of work on a diseased
heart.



19

Occupational Diseases
Workers employed in certain occupations are exposed to
certain diseases which are inherent [its character] in those
occupations.
Eg.
 Infections due to contamination.
 Infra-red radiations.
 Skin diseases [Chemical, Leather Processing Units].
 Hearing impairment caused by noise.
 Lung Cancer caused by asbestos dust.
 Diseases due to effect of heat/cold in extreme hot/cold
climate, etc.
20


Compensation for What?

Sec-4 Provides for Compensation for

Death
Permanent
Total

Temporary

Partial

Total

Partial

[or]

Disablement
Total

Partial

Permanent Temporary Permanent Temporary

21


Compensation
Compensation

Factors considered for calculation / Depends on
Death
Disablement
Permanent
a)Nature of
Injury

Total

Temporary

Partial

Total

Partial

[or]
Total

Partial

Permanent Temporary Permanent Temporary

b)Monthly Wages of Employee
c)Relevant Factor
No Distinction between Adult & Minor
22


Amount of Compensation
Compensation
for Death

Compensation for Disablement
Permanent Disablement

Total

Partial
[Injury listed in
Part-II of
Schedule-I]

Temporary
Total/Partial

% of loss of
50% of M.W. X 60% of M.W. X R.F. earning capacity –
R.F. [or] 1,20,000 [or] 1,40,000 whichever that [such] % of 25% of M.W. –
compensation
Payable every
whichever is more. is more.
payable in case of Half-Month.
Permanent Total
Disablement.

Injury not listed in Schedule-I
As in case of PTD-proportionate to loss of earning capacity [loss of
earning capacity-assessed by qualified medical practitionerconsidering list of injuries listed in Schedule-I]
23


Calculation of Compensation for Death
50 X (M.W) X (R.F.)
100

Formula

or 1,20,000 whichever is more

Employee

Eg.

M.W. (Rs.)

Date of Death (By Accident)

Date of Birth

Rs.3,000

12/03/2000

14/07/1965

Completed Years of age on 14/07/1999
Relevant Factor for Age 34

Calculation

∴ the
Compensation is

24

34
199.40

Amount of
50% of Rs.3,000 X 199.40 or 1,20,000
Compensation whichever is more
50 X 3000 X 199.40
Rs.2,99,100
100

Rs.2,99,100


Calculation of Compensation for PTD
60 X (M.W) X (R.F.)
100

Formula


Employee

Eg.

M.W. (Rs.)

Date of PTD (By Accident)

Date of Birth

Rs.3,000

12/03/2000

14/07/1965


Calculation

∴ the
Compensation is

25

34
199.40

Amount of
60% of Rs.3,000 X 199.40 or 1,40,000
60 X 3000 X 199.40
Rs.3,58,920
100

Rs.3,58,920


Calculation of Compensation for PPD
60 X (M.W) X (R.F.)
100

Formula


Employee

Eg.

M.W. (Rs.)

Date of PTD (By Accident)

Date of Birth

Rs.2,000

14/09/1999

01/08/1969


Calculation

∴ the
Compensation is

26

30
207.98

Amount of
60% of Rs.2,000 X 207.98 or 1,40,000
60% of 60 X 2000 X 207.98
Rs.1,49,746
100

Rs.1,49,746


Compensation to be paid
When due?

If employer not accept the
compensation to the extent
claimed - Result

Time Limit for
Payment

Should
make
provisional
Within 1 month from
payment to the extent he
the due date.
accepts.
As soon as it falls
due-i.e., Liability Payment should be deposited
for payment of with
Commissioner
for
compensation
is Employees’ Compensation.
fixed on employer.

If not, Commissioner
direct the employer to
pay the arrears with
simple interest rate of
12% or as prevailing in
bank.
Further delay-50% of

Employee having right to make
amount due will be
any further claim.

recovered as penalty.

27


Review of Half-monthly Payment
Half-monthly Payment may be Reviewed
By

On Application by
Employer

Commissioner

or

Employee

Application must be accompanied by Certificate
of Qualified Medical Practitioner that
There has been change in condition of employee

On review, the half-monthly payment may be
Continued Increased Decreased Ended

28

Converted into a lump-sum


Rules Regarding Distribution of Compensation

29

Rules

with
of
Lump-sum Deposit
Compensation due to an Commissioner
Not valid
employee/person under legal
disability

1 Payment

2

Deceased Employee (Death of
Employee)

Employer
may
make
advances Amount equal to 3 months
payment directly wages of employee
to dependant
Pay compensation not less
than ` 10 to employee [or]

Adult Male Worker
[Totally/Partially Disabled]

Employer may
either

4

Compensation amount
deposited with Commissioner

Employer - discharged from liability

5

Commissioner cause notice to Dependants to appear before him for
be published/served on
determining the distribution of compensation.

6

If Commissioner satisfied
Repay the balance to employer.
that no dependant exists

3

Deposit with commissioner


If employer makes direct
payment to dependants

Compensation for Death &

Rules Regarding Distribution of Compensation
Commissioner
shall
disbursement statement.

furnish

compensation

8

Apportionment of Compensation
(by Commissioner)

apportioned
among
dependants or any one of
them in such proportion
as he thinks fit.

Commissioner may at
his
discretion
allot
compensation to any one
dependant.

9

To Whom Compensation payable

Person entitled

10

Lump-sum
deposited
with May be invested, applied or otherwise dealt with for
Commissioner payable to woman benefit of woman or person under legal disability as
or person under legal disability
commissioner directed.

11

Commissioner may pay to dependant or any other
Half-monthly payment payable
person whom the commissioner thinks best fitted to
to person under legal disability
provide for the welfare of the employee.

12

Neglect
of
Children
by
parent/variation of circumstances Commissioner may vary earlier orders regarding
of any dependant/other sufficient distribution/investment of compensation
cause

13

If Commissioner vary orders as payment of compensation obtained by fraud or
in point 12 by reason of the fact impersonation or other improper – it may be
that
recovered as arrear of land revenue.


If applied by employer

7

30

Notice & Claim
Notice
Commissioner

By

Employee

Manner

Claim

In Writing

Time

As soon as after happening
of the accident

Preferred
before

Within 2
years of

Commissioner
Occurrence of
accident
death

Name &address (of person
injured)
Content

cause of injury
Date of accident

Serving of Notice

Employer/Any
one
of
several employers /Any
person
responsible
to
employer for management
of any branch of trade or
business

Mode of Serving
Notice

By delivery/regd.post

The
Commissioner
may
entertain & decide any claim
(no notice or prefer claim) if he
satisfied that even if there is
failure to give notice or prefer
claim

Puducherry.

To Whom

31

Fatal Accidents
Sec-10-A [Power to require from employers
statements regarding Fatal Accidents]

32

Sec-10-B [Report of Fatal
Accidents & Serious Bodily
Injuries]

To

By

Regd. Post

Require employer

To Submit statement stating
Time
circumstance leading to death of
Limit
employee

Format

Prescribed Form

Time Limit

Within 30 days of service of notice

liable

or

Not liable

Commissioner
7
days
accident

Puducherry.

Employer required to give
Commissioner receives from any source regarding notice about accident in his
resulting
in
fatal accident of an employee, send notice to premises
death/serious bodily injury
employer
send report

of

This section – not apply to

Further indication
To deposit compensation on
factories to which ESI Act,
to be made by
account of death
1948 applies.
employer
in
the
Statement whether Deposit within Indicate
for
in his opinion, he is 30 days of ground
notice
disclaimer

Medical Examination & Its Rules

33

In certain cases of accidents, an employees has to be medically examined to entitle to
claim compensation
Employee

To Whom

Employer

Time limit – employer arrange for Before expiry of 3 days from the date of service
Medical Examination
of notice

Cost of Medical Examination

Free of Charge

Medical Examination by

Qualified Medical Practitioner

If employee refuse/obstruct for Medical Right to compensation
Examination
refusal/obstruction

–suspended

till

Right to compensation – suspended till he
& offers himself for Medical
Examination

Employee voluntarily leaves without
returns
examined

Employee refused Medical Examination Commissioner may, if thinks fit, direct the
& subsequently dies
payment of compensation

If right to compensation is suspended

No compensation for suspended period.

If injury of an employee aggravated due
Entitled to compensation only for the normal
to
his
refusal
for
Medical
injury & not for aggravated injury.
Examination/follow instructions

Puducherry.

Notice of accident by

Compensation – First Charge on Assets
Claim for compensation – Preferential Debt.
Employer may attempt to transfer his
immovable assets before discharging
his liability to pay compensation
which accrued before the date of
transfer
Compensation to be first charge on Sec.14-A creates first charge on
assets transferred by employer
immovable assets transferred by the
employer in respect of compensation
payable by him under the E.C. Act
provided the liability for the
compensation accrued before the
date of transfer.

34

Date of Transfer of Assets

01-02-2013

Eg.

Date of Liability accrued

10-02-2013

Puducherry.

References
 Elements of Industrial Law – N.D.Kapoor
 PPTs of

Hari Parmeshwar
Ranjeet Kumar Yadav
AFTERSCHO☻OL

35

Puducherry.

THANK YOU

36

Puducherry.

Employees compensation act 1923

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