What is the Workmen’s Compensation Act 1923?
The Workmen’s Compensation Act 1923, also known as Employee Compensation Act, came into force on 1st July 1924, and it applies across India. The Workmen Compensation Act 1923 was formed to provide compensation to workers who faced Accidental Death or Injuries in the course of employment. The Act makes the employers liable to pay compensation to employees who sustained injuries which leads to their disablement or death in the course of employment. However, the Workmen’s Compensation Act 1923 does not apply to employees covered under Employees State Insurance Act, 1948.
Employees are the backbone of any organisation. It is the duty of any employer to take care of their employees, especially when employees face death or disability in the course of conducting their duty.
What is the necessity of Workmen’s Compensation Act?
Before the introduction of the Workmen’s Compensation Act, 1923, the employee was responsible for proving the negligence on part of the employer which resulted in an occupational injury. This resulted in a time-consuming and expensive litigation process.
Thus, there was a need for a legislation which would give the employees the automatic right to claim compensation for any form of employment related accidents or diseases.
Hence, the Workmen’s Compensation Act of 1923 was enacted on 1st July 1924.
The Employee Compensation Act 1923 makes the employer responsible for injuries sustained by the employees in the course of employment and provides for faster settlement of disputes for compensation through Special Tribunals.
The objective of Workmen’s Compensation Act was to ensure that employees receive a certain some of money on which they can live on as their earning capacity would be reduced significantly in case they suffer from death or disability.
What are the features of Workmen’s Compensation Act 1923?
As per the Section 3 of the Employee Compensation Act, an employer is liable to pay compensation to the employee if the employee suffers from an accident that results in a personal injury due to an accident that:
- Arises out of employment (ie. while engaged in work) and;
- Arises in the course of employment (ie. during work hours) and;
- The injury results in disablement or death of the worker
If the above 3 conditions are satisfied, the employer is liable to pay compensation as per the Workmen’s Compensation Act 1923
An employer is liable to pay compensation under the Workmen’s Compensation Act 1923 for injuries arising resulting Permanent or Temporary disablement of the employee due to accidents occurring in the course of employment.
Disablement of the employee can be temporary or permanent. Permanent Disability reduces the earning capacity of the employee permanently while Temporary Disability reduces the employee’s earning capacity for the duration of disability. Total disablement whether temporary or permanent, incapacitates a workman from all work which he could perform before the injury occurred.
The Employee Compensation Act also has a provision to provide compensation to the employees if the employee contracts an Occupational Disease. Occupational Disease means a Disease which is peculiar to a particular form of employment only.
Below is a tabular column of some occupational diseases covered under the Workmen’s Compensation Act 1923
|
Serial No |
Occupational Disease |
Employment |
|
1 |
Infectious and parasitic diseases contracted in an occupation where there is a particular risk of contamination |
(a) All work involving exposure to health or laboratory work; (b) All work involving exposure to veterinary work; (c) Work relating to handling animals, animal carcasses, part of such carcasses, or merchandise which may have been contaminated by animals or animal carcasses; (d) Other work carrying a particular risk of contamination |
|
2 |
Diseases caused by work in compressed air |
All work involving exposure to the risk concerned |
|
3 |
Poisoning by nitrous fumes |
All work involving exposure to the risk concerned |
|
4 |
Diseases caused by arsenic or its toxic compounds |
All work involving exposure to the risk concerned |
|
5 |
Diseases caused by radioactive substances and ionising radiations |
All work involving exposure to the action of radioactive substances or ionising radiations |
For a complete list of occupational diseases, refer schedule 3 of Workmen’s Compensation Act 1923
What are the Conditions under which an Employer is Not Liable to pay Compensation under the Workmen’s Compensation Act 1923?
According to Workmen’s Compensation Act, the employer is liable to pay compensation when the injury or accident occurs during the course of employment. However, the employer is not liable for compensation under the Act if:
- An injury that doesn’t’ result in partial or total disablement for a period of more than 3 days
- An accident which caused permanent disability or death occurred when the employee was under the influence of drugs or alcohol
- The employee sustained injuries because wilfully ignoring the safety protocols which were specifically framed to ensure the safety of the employee
What is the amount of Compensation under Workmen’s Compensation Act 1923?
The calculation of the compensation amount is done as per the provisions listed under Section 4 of the Workmen’s Compensation Act as follows:
- In Case of Accident Resulting in Death: An amount equal to 50% of the monthly wages of the deceased employee multiplied by the relevant factor or Rs.1,20,000 whichever is more.
- In Case of Accident That Results in Permanent Total Disablement: An amount equal to 60% of the monthly wages of the injured employee multiplied by the relevant age factor or Rs.1,40,000 whichever is more.
- In Case of Accident That Results in Permanent Partial Disability: The amount payable is the percentage of the loss of the earning capacity due to injury multiplied by the relevant age factor
- Temporary Disability: Employees facing Temporary Disability are eligible for 25% of monthly wages
Here, the relevant age factor is the specified value mentioned in Schedule 4 of the Workmen’s Compensation Act depending on the age of the employee at the time of the accident.
You can read our detailed blogpost on the Calculation of Claim Settlement Amount under a Workmen’s Compensation Insurance Policy.
Who is eligible to claim Compensation under the Workmen’s Compensation Act 1923?
The following people are eligible to claim compensation on behalf of the deceased employee:
- a widow, a minor (legitimate or adopted) son, an unmarried (legitimate or adopted) daughter or a widowed mother; and
- if wholly dependent 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;
- if wholly or in part dependent on the earnings of the workman at the time of his death,—
- a widower,
- a parent other than a widowed mother,
- a minor illegitimate son, an unmarried illegitimate daughter or a daughter (legitimate or illegitimate or adopted) if married and a minor or if widowed and a minor,
- a minor brother or an unmarried sister or a widowed sister if a minor,
- a widowed daughter-in-law,
- a minor child of a pre-deceased son
- a minor child of a pre-deceased daughter where no parent of the child is alive, or
- a paternal grandparent if no parent of the workman is alive
Get Best Quotes for Workmen’s Compensation Insurance Policy from Qian
A Workmen’s Compensation Insurance Policy protects the employers from legal liabilities to provide compensation to the employees for accidental death or disability suffered by the employee in the course of employment.
A Workmen’s Compensation Insurance Policy is a mutually win-win solution for both, the employer and the employee since the WC Insurance Policy takes care of the legal liability of the employer and provides compensation to the employee in case he/she meets with accidental death or disability in the course of employment.
Qian is an experienced Insurance Broker for Workmen’s Compensation Insurance Policy in India and can assist you with best Workmen’s Compensation Insurance Policy Coverages and Quotes.
If you wish to purchase a Workmen’s Compensation Insurance Policy, email us at insurance@qian.co.in or call us on 022-22044989. We would be glad to assist you.
- What is a Workmen’s Compensation Insurance Policy?
- A Workmen’s Compensation Insurance Policy is known as Workers Compensation Policy (WC Policy) or Employee Compensation Policy.
- What is the need for a Workmen’s Compensation Insurance Policy?
- What is the Workmen Compensation Act 1923?
- What are the Coverages under a Workmen’s Compensation Insurance Policy?
- What are the Add-On Covers under a Workmens Compensation Insurance Policy?
- What is the compensation amount payable under a Workmen’s Compensation Insurance Policy?
- What are Fatal and Non-Fatal accidents under Workmen Compensation?
- What is the Cost of a Workmen’s Compensation Policy?
- Can a Claim be filed under both the WC Act and Common Law?
- What are the Exclusions under a Workmen’s Compensation Policy?
- How to make a Claim under a Workmens Compensation Policy?
- Purchase a Workmen’s Compensation Policy with Qian!
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