ALIGARH MUSLIM UNIVERSITY

FACUTY OF LAW , ALIGARH

TUTORIAL ASSIGNMENT

TOPIC – WORKMEN’S COMPENSATION ACT,

1923

SUBMITTED TO : SUBMITTED BY :
Prof. zaheeruddin KIRTI
16BALLB85
GJ6077
GROUP – IV
SEMESTER – VIII
 SYNOPSIS
1.) Introduction
2.) Object and Reasons
3.) Workers Compensation in India
4.) Workmen Compensation Act 1923
• Objectives
• Scope and Coverage
• Definitions
5.) Employer’s Liability for
Compensation
6.) Liability for Compensation
7.) Bhopal Gas Tragedy
8.) Conclusion
9.) Bibliography
 Introduction
The growing complexity of industry in this country, with the increasing use of machinery and
consequent danger to workmen, along with the comparative poverty of the workmen themselves,
rendered it advisable that they should be protected, as far as possible from hardship arising from
accidents. After a detailed examination of the question by the Government of India, Local
Governments were addressed in July 1921, and provisional views of the Government of India were
published for general information. The advisability of legislation had been accepted by the great
majority of Local Governments and of employers and workers associations and the Government
of India believed that public opinion generally is in favor of legislation. In June, 1922 a committee
was convened to consider the question. After considering the numerous replies and opinions
received by the Government of India, the committee was unanimously in favour of legislation, and
drew up detailed recommendations. On the recommendations of the committee the Workmen‘s
Compensation Bill was introduced in the Legislature. The Workmen‘s Compensation Bill having
been passed by the Legislature received its assent on the 5th March, 1923. It came into force on
1st day of July, 1924. The Workmen‘s Compensation Act, 1923 is one of the earliest labour welfare
and social security legislation enacted in India. It recognizes the fact that if a workman is a victim
of accident or an occupational disease in course of his employment, he needs 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 Employees‘ State Insurance Act provides that 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 damages under the Workmen‘s
Compensation Act, 1923 or any other law for the time being in force or otherwise in respect of an
employment injury sustained by the insured person as an employee under this Act.

OBJECTS AND REASONS

The general principles of workmen‘s compensation command almost universal acceptance and
India is now nearly alone among civilized countries in being without legislation embodying those
principles. For a number of years, the more generous employers have been in the habit of giving
compensation voluntarily, but this practice is by no means general. The growing complexity of
industry in this country, with the increasing use of machinery and consequent danger to workmen,
along with the comparative poverty of the workmen themselves, renders it advisable that they
should be protected, as far as possible from hardship arising from accidents. An additional
advantage of legislation of this type is that by increasing the importance for the employer of
adequate safety devices, it reduces the number of accidents to workmen in a manner that cannot
be achieved by official inspection. Further, the encouragement given to employers to provide
adequate medical treatment for their workmen should mitigate the effects of such accidents as do
occur. The benefits so conferred on the workman added to the increased sense2 of security which
he will enjoy, should render industrial life more attractive and thus increase the available supply
of labour. At the same time, a corresponding increase in the efficiency of the average workman
may be expected. A system of insurance would prevent time burden from pressing too heavily on
any particular employer. An Act is to provide for the payment by certain classes of employers to
their workmen of compensation for injury by accident.

WORKERS COMPENSATION IN INDIA

Workers compensation is defined as the amount payable by an employer towards employees for
any injuries sustained during the course of their employment. It would cover medical or other
expenses incurred by the employees of a company during the course of performing work-related
activities. Workers protection is usually paid as a variable or base pay. If an employer chooses
the base pay option, then employees would be compensated according to his or her role in the
organization. Retirement benefits such as provident fund, superannuation, house rent allowances
and provident funds would be proportional to the basic salary. If an employer chooses the
variable pay option, then the workers compensation amount would be based according to the
individual performance of that employee and how much they contribute to the company goals.

WORKMEN’S COMPENSATION ACT, 1923

This is a very old enactment for providing social security to workmen. Under this Act, a workman
who dies or suffers disablement (partial or total) due to accident is entitled to get compensation
from employer. Act does not apply where workman covered under Employees State Insurance
Act5, since a workman is entitled to get compensation from ESIC, a workman covered under
Employees State Insurance Act is not entitled to get compensation under Workmen‘s
Compensation Act, as per section 53 of ESIC. However, Act is applicable to factories, mines,
plantations, transport establishments, construction work etc. who are not covered under Employees
State Insurance Act.

OBJECTIVES
The Workmen‘s Compensation Act, 1923, aims to provide workmen and their dependents some
relief in case of accidents, arising out of and in the course of employment and causing either death
or disablement of workmen as a measure of relief and social security. It also provides payment by
certain classes of employers to their workmen, compensation for injury by accident. Enables a
workman to get compensation irrespective of his negligence. It lays 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 subject before the Act came into force. The legislation has given security to the worker and
this has increased the availability of labour to some extent. The worker now secured, has become
efficient.

SCOPE AND COVERAGE

The Act extends to the whole of India and it applies to railways and other transport establishments,
factories establishments engaged in making, altering, repairing, adapting, transport or sale of any
articles, mines, docks, establishments engaged in constructions, fire-brigade, plantations, oilfields
and other employments listed in Schedule II of the Act. The Workmen's Compensation
(Amendment) Act, 1995, has extended the scope of the Act to cover workers of newspaper
establishments, drivers, cleaners, etc. working in connection with motor vehicle, workers
employed by Indian companies abroad, persons engaged in spraying or dusting of insecticides or
pesticides in agricultural operations, mechanized harvesting and thrashing, horticultural operations
and doing other mechanical jobs.

DEFINITIONS UNDER WORKMEN'S COMPENSATION ACT

Dependant: Section 2(d) gives a list of persons who come within the category of "dependant"
of a workman. In ordinary language the dependant of a person is one who lives on his earnings.
Under Section 2 (d) there are three categories of dependants.

Minor: According to Section 2(1) (ff), minor means a person who has not attained the age of 18
years.8 Employer: Sec. 2( e) provides that the term Employer "includes" the following:
(i) anybody of persons, whether incorporated or not
(ii) any managing agent of an employer
(iii) the legal representatives of a deceased employer, and
(iv) any person to whom the services of a workman are temporarily lent or let out, while the
workman is working for him. Thus the word employer‘ includes not only natural persons, and
body of persons, but artificial and legal persons.9

Managing agent: According to Section 2 (1) (f), managing agent means any person appointed
or acting as the representative of another person for the purpose of carrying on such other person's
trade or business, but does not include an individual manager subordinate to an employer.

Seaman: Under Section 2(1) (K), Seaman means any person forming part of the crew of any13
ship, but does not include the master of ship.

Partial Disablement: Disablement, in ordinary language, means loss of capacity to work or

move. Such incapacity may be partial or total and accordingly there are two types of disablement,
partial and total. In the Act both types of disablement are further subdivided into two classes,
temporary and permanent. By Section 2 (g) Temporary Partial Disablement means such
disablement as reduces the earning capacity of a workman in any employment in which he was
engaged at the time of the accident, and Permanent Partial Disablement means such disablement
as reduces his earning capacity in every employment he was capable of undertaking at that time.
 EMPLOYER’S LIABILITY FOR COMPENSATION
An employer is liable to pay compensation if personal injury is caused to a workman by accident
arising out of and in the course of his employment.33An employer is not liable in following cases:
Injury which does not result in total or partial disablement of workman for a period exceeding 3
days. Injury caused by an accident directly attributable to workman under influence of drinks or
drugs, willful disobedience of express orders for safety, willful removal of safety guard or device.
[Even if such case, if the workman dies or suffers permanent total disablement, the employer will
be liable].

LIABILITY FOR COMPENSATION

In order to attract section 3 (1) of the Act, following three conditions must be fulfilled:
(a) personal injury;
(b) accident; and
(c) arising out of and in the course of employment. In order to succeed in an application for getting
compensation under section 3 of the Act the following points are required to be established:
(1) that the accident must arise out of and in the course of the workman‘s employment;
(2) there must be causal connection between the injury and the accident and the work done in the
course of the employment;
(3) the workman has to say that while doing a part of his duty or incidental thereto it has resulted
into an accident.
It is necessary that the workman must be actually working at the time of the injury or the accident.
Therefore, the three factors, that there must be injury, which must be caused in an accident, it must
be caused in the course of and out of the employment must be established41 Compensation payable
under the Act
Section 4 of the Act prescribes the amount of compensation payable under the provisions of the
Act. Amount of compensation payable to a workman depends on:
1) The nature of the injury caused by accident.
2) The monthly wages of the workman concerned, and
3) The relevant factor for working out lump-sum equivalent of compensation amount as specified
in Schedule IV (as substituted by Amendment Act of 1984). There is no distinction between an
adult and a minor worker with respect to the amount of compensation.
Section 446, provides for compensation for:
1) Death;
2) Permanent total disablement;
3) Permanent partial disablement; and
4) Temporary disablement – total or partial. 1) Compensation for Death: Where death results
from an injury, the amount of compensation shall be equal to 50 percent of the monthly wages of
the deceased workman multiplied by the relevant factor, or Rs. 85,000 whichever is more. 2)
Compensation for Permanent Total Disablement: Where permanent total disablement results from
an injury, the amount of compensation payable shall be equal to 60 percent of the monthly wages
of the injured workman multiplied by the relevant factor, or Rs. 90,000, whichever is more. 3)
Compensation for Permanent Partial Disablement: i) In the case of an injury specified in Part II
of Schedule I, such percentage of the compensation which would have been payable in the case of
permanent total disablement as is specified therein as being the percentage of the loss of earning
capacity caused by the injury; and in other words, the percentage of compensation payable is
proportionate to the loss of earning capacity permanently caused by the Scheduled injury. Thus, if
the loss of earning capacity caused by an injury specified in Part II of Schedule I is 30 percent, the
amount of compensation shall be 30 percent of compensation payable in case of permanent total
disablement. ii) In the case of an injury not specified in Schedule I such percentage of the
compensation payable in the case of permanent total disablement as is proportionate to the loss of
earning capacity (as assessed by the qualified medical practitioner) permanently caused by the
injury. 4) Compensation for Temporary Disablement: A half monthly payment of the sum whether
total or partial results equivalent to 25% of monthly wages of the from the injury workman to be
paid in the manner prescribed. 5) Compensation to be Paid when due and Penalty for Default:
Section 4A provides for the payment of compensation and the penalty for default. It provides that
compensation shall be paid as soon
as it falls due. Section 4 mandates employer to pay compensation amount as soon as it falls due to
victim or his or her legal heirs

BHOPAL GAS TRAGEDY

One of the most tragic industrial disasters in the past few centuries, the Bhopal Gas Tragedy, was
witnessed just after the midnight on 3rd of December, 1984 when a highly toxic gas Methyl
Isocyanate (MIC) escaped from a tank killing many thousands and devastated the lives of tens of
thousands of people. One reason for injustice to the people is that tort law is undeveloped in India.
There has been little doctrinal development and tort is little used and has remained largely outside
the consciousness of Indian lawyers and public. There has been little connection between tort law
and disasters in India. What typically happens in disasters is that the government announces that
it is making ex gratia payments of a specified amount to the victims. The attributions of
responsibility would be done by Governmental investigations, commission of inquiry or a criminal
prosecution. Similarly, in Bhopal's case there has been insufficient inquiry and due to the
inadequate compensation mechanisms the people were deprived of compensation for their
damages. In comparison to the American system, claiming damages in tort law would have been
much simpler and easier. If a disaster such as Bhopal had happened in the United States of
America, it would have been much simpler to extract a substantial amount of money, and possibly
resulting in Union Carbide's bankruptcy.Night between 2nd and 3rd of December, 1984, Union
Carbide Pesticide plant located in the northern part of Bhopal, Madhya Pradesh, India, leaked
40tons of a highly toxic gas known as Methyl Isocyanate (MIC) from the tank E610 killing
thousands of people the very first day of the tragic event. Approximately 3828 died on the day of
the disaster and over 30000 injured. This figure has increased unbelievably ever since. It cost
several thousands of lives in the next few days and led to long term medical effects such as eye
problems, respiratory difficulties, immune and neurological disorders, cardiac failure's, and birth
defects among children born to affected women.

CONCLUSION
Social justice theorists consider tort law as a device for correcting imbalances in political powers.
In a corrupt society as India's, ruling political parties take advantage of their power and get all the
necessary provisions for an enterprise like Carbide which would readily fund their party in return.
As a result these interests of parties pursue self-interest at the expense of public by producing
dangerous products and hiding critical information about their dangerousness. By aiding citizens
with the power to sue corporations for misconduct outside of the legislative and regulatory process,
tort law serves to correct this imbalance of power. Negligence is the failure to take adequate care
and this care requires one to take cost-justified precautions. Precautions can be cost-justified
whenever their cost is less than the costs of the harm risked; by not taking precautions, discounted
by the probability of the harm's occurrence. Once this concept of negligence is understood as the
failure to take the cost justified precautions we need to decide what decides imposing liability on
those who have failed to take these precautions. The economic analysis primarily relies on this
concept of negligence. In conclusion, I see a great level of negligence by Carbide and its failure to
take cost justified precautions led to this disaster. Union Carbide should be held liable for all the
damages to the people of Bhopal. The least the Indian Government can do for the people of Bhopal
is to provide them with clean drinking water, clean up the hazardous chemicals from Bhopal and
most important is to introduce an efficient compensating machinery to help the victims financially.
Indian Government can also introduce an empowered national commission with the necessary
authority and the funding for all the activities
related to Bhopal. As far as my knowledge is considered this is already introduced but pending. In
a democratic government like India this is a long process which requires clearance from the
Cabinet. The most important pointer the government should take by this disaster.
 Bibliography
1.) http://wwwliiofindia.org/
2.) https://shodhganga.inflibnet.ac.in/
3.) http://epgp.inflibnet.ac.in/