a brief presentation on compensation as per ECA

1. COMPENSATION
UNDER EMPLOYEE’S
COMPENSATION ACT, 1923
Ishaan Savla; TY A039.

2. EMPLOYEE’S COMPENSATION ACT,
1923
 The aim and objective of this Act is to
provide payment of COMPENSATION to
employees from employers for injury
by accident.
 Under § 2 (1) (c) of the Employee’s
Compensation Act: "compensation"
means compensation as provided for
by this Act.

3. WHEN IS COMPENSATION TO BE
GIVEN?
The Employer is liable to pay COMPENSATION
in two cases:
Employer’s
Liability
Accident
Arising out of
and in the
course of
employment
Occupational
Disease
Exposed to
certain diseases
inherent in the
Occupation

4. FACTORS CONSIDERED
 The factors considered while calculating the
COMPENSATION to be provided to the Employee for
his injury are:
1. Nature of injury
2. Monthly wages of the employee
3. Relevant factor
 Other conditions to be fulfilled:
1. Engaged with the employer
2. Occurred at the place of employment
3. Risk incidental or inherent in the nature of
employment

5. HOW MUCH COMPENSATION IS TO BE
GIVEN?
 The provisions pertaining to the quantum of
COMPENSATION are listed in § 4 of the Act.
 The different contingencies contemplated by
the Section are:
Death
Permanent
disablement
Total Partial
Temporary
disablement
Total Partial

6. DEATH
 The formula to determine the COMPENSATION in
case of Death as listed out in § 4 of the Act is:
50% of the monthly wages x the relevant
factor
OR
An amount of Rs. 1,20,000/-
Whichever is more.
 In cases of death the Employer is also liable to
pay Rs. 2,500/- as funeral expenses.

7. EXAMPLE
 Death; MW: Rs. 3,000/-; Age: 34
Relevant factor for age 34= 199.40
C= 50 x 3000 x 199.40
100
Compensation is Rs. 2,99,100/-

8. PERMANENT TOTAL DISABLEMENT
 The formula to determine the COMPENSATION in
case of Permanent Total Disablement as listed
out in § 4 of the Act is:
60% of the monthly wages x the relevant
factor
OR
An amount of Rs. 1,40,000/-
Whichever is more.

9. EXAMPLE
 TPD; MW: Rs. 3,000/-; Age: 34
Relevant factor for age 34= 199.40
C= 60 x 3000 x 199.40
100
Compensation is Rs. 3,58,920/-

10. PERMANENT PARTIAL
DISABLEMENT
 The COMPENSATION in case of Permanent
Partial Disablement as listed out in § 4 of the
Act is:
1. If the injury is listed in Part II of Schedule I:
such percentage which would have been
payable in case of PTD as being percentage
of loss of earning capacity.
2. If not listed in Schedule I: such percentage
payable in case of PTD as is proportionate to
the loss of earning capacity.

11. EXAMPLE
 PPD; MW: Rs. 2,000/-; Age: 30
Relevant Factor age 30= 207.98
C= 60% of 60 x 2000 x 207.98
100
= 60% of 2,49,576
Compensation is Rs.1,49,746/-

12. TEMPORARY DISABLEMENT
 The COMPENSATION in case of Temporary
Disablement as listed out in § 4 of the Act is:
25% of the monthly wages
 This compensation is payable every half-month.

13. RELEVANT FACTOR
 The relevant factor is a mathematical figure,
calculated with reference to the age of the employee
which is contained in Schedule IV.

14. B.E.S.T. v/s. MRS. AGNES
 “Though the doctrine of reasonable or notional extension of
employment developed in the context of specific workshops,
factories or harbours, equally applies to such a bus service the
doctrine necessarily will have to be adapted to meet its peculiar
requirements. While in a case of a factory, the premises of the
employer which gives ingress or egress to the factory is a
limited one, in the case of a city transport service, by analogy,
the entire fleet of buses forming the service would be the
"Premises".
 In the present case, therefore, the High Court was right in
saying that the accident occurred to Nanu Raman during the
course of his employment and, therefore, the respondent was
entitled to compensation.”