The Employee's Compensation Act, 1923 is the first legislation of its type towards social security. When this Act came into force social legislation was unknown in the country. The object of Employee's Compensation Act, 1923 was to provide compensation to employees for injury by accident, to be paid by certain classes of employers.
The Employee's Compensation Act, 1923, provides financial benefits to employees in case of injury or death by accident while in employment. The compensation provided is merely a measure of social assistance developed out of the concept of Employer’s Liability without any financial burden on the employees or on the government body. |
The Salient Features of the Employee's Compensation Act is given below : |
| APPLICABILITY |
Employer includes any person whether incorporated or not and any agent of employer and where services are temporarily lent or let on hire to another person, that means such other person. |
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| ELIGIBILITY |
Any employee who is injured by accident arising out of and in the course of his employment in specified list of employment contracts any disease specified therein as an occupational disease peculiar to that occupation. |
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| Benefits : |
The Act specified three conditions for claiming compensation from the employer:
- there must be an injury.
- it should be caused in an accident and
- it should be caused during the course of employment.
The occupational diseases, for which compensation may be claimed, have also been specified and categorized. Even after the cessation of employment, if an employee develops symptoms of an occupational disease, the employer is liable to pay compensation to the employee in employment for a certain period. Even when the employment aggravates the existing disease of an employee, either by strain or fatigue incidental to employment, the employer is liable to pay compensation. The words ‘accident’ and ‘injury’ are important in the Act. Accident is like an unforeseen mishap and injury may also mean a psychological suffering, not always tangible in character. The amount of compensation to be paid depends on the wages, age of the employee and the type of injury suffered by him. Compensation rates vary depending on whether the injury is leading to temporary partial disablement, temporary total disability, permanent disability and permanent total disability.
The following amount of compensation shall be payable by the employer:
| 1) |
Where death results from injury, 50% of monthly wages x relevant factor or Rs.1,20,000/- whichever is more. |
| 2) |
Where permanent, total disablement results from the injury, 60% of monthly wages x relevant factor or Rs.1,40,000, whichever is more ( relevant factor depends upon the age of a Employee) |
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| The employer, however, is not liable to pay compensation in the following cases: |
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| 1) |
Where the injury does not lead to partial or total disablement for a period exceeding 3 days; |
| 2) |
Where the injury not resulting in death is caused by the fault of the employee, e.g., due to influence of drinks, drugs, willful disobedience of an order, etc. |
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| Coverage of employees through Insurance Company: |
The employer can also provide insurance to its employees under Employees Compensation Policy issued by LIC of India, whereby the employer can be absolved of its liability under the Act. |
| Penal Provision: |
Any contract by a worker waiving his right to be compensated under this Act is null and void. Compensation should be paid early-delay beyond 1 month attract interest @ 6% p.a. and penalty of up to 50% of the compensation,
Certain other offences attract fine up to Rs.5,000/- |
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