Workmen’s Compensation Act

Welcome

To

Training Session

On

Workmen’s Compensation Act, 1923

Amended as Employee’s Compensation Act

 Workmen’s Compensation Act

Preliminary

• Dated 05.03.1923

• An Act to provide for the payment by

certain classes of employers to their
workmen of compensation for injury by
accident

• It extends to the whole of India

• It shall come into force on 01.07.1924

 Workmen’s Compensation Act

Definitions

• Dependent means any of the following relatives of deceased employee, namely:--

(i) a widow, a minor legitimate or adopted son, an unmarried legitimate or adopted daughter
or a widowed mother; and

(ii) if wholly dependent on the earnings of the *[employee] at the time of his death, a son
or a daughter who has attained the age of 18 years and who is infirm;

(iii) if wholly or in part dependent on the earnings of the *[employee] at the time of his
death,--

(a) a widower,

(b) a parent other than a widowed mother,

(c) 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,

(d) a minor brother or an unmarried sister or a widowed sister if a minor,

 Workmen’s Compensation Act

Definitions

(e) a widowed daughter-in-law,

(f) a minor child of a pre-deceased son,

(g) a minor child of a pre-deceased daughter where no parent of

the child is alive, or

(h) a paternal grandparent if no parent of the employee is alive;

Explanation.--For the purposes of sub-clause (ii) and items (f)

and (g) of sub-clause (iii), references to a son, daughter or
child include an adopted son, daughter or child respectively
 Workmen’s Compensation Act

Definitions

• Employee means a person, who is--

(i) A railway servant as defined in clause (34) of section 2 of the Railways Act, 1989 (24 of 1989),
not permanently employed in any administrative district or sub-divisional office of a railway and not
employed in any such capacity as is specified in Schedule II; or

(ii) (a) a master, seaman or other members of the crew of a ship,

(b) a captain or other member of the crew of an aircraft,

(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with
a motor vehicle,

(d) a person recruited for work abroad by a company, and who is employed outside India in any such
capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as the
case may be, is registered in India; or

(iii) employed in any such capacity as is specified in Schedule II, whether the contract of employment
was made before or after the passing of this Act and whether such contract is expressed or implied,
oral or in writing; but does not include any person working in the capacity of a member of the Armed
Forces of the Union; and any reference to any employee who has been injured shall, where the employee
is dead, include a reference to his dependents or any of them
 Workmen’s Compensation Act

Definitions

• Employer includes anybody of persons whether

incorporated or not and any managing agent of an
employer and the legal representative of a deceased
employer, and, when the services of a employee are
temporarily lent or let on hire to another person by the
person with whom the employee has entered into a
contract of service or apprenticeship, means such other
person while the employee is working for him

• 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
 Workmen’s Compensation Act

Definitions

• Partial disablement means, where the disablement is of a temporary nature,

such disablement as reduces the earning capacity of a employee in any
employment in which he was engaged at the time of the accident resulting in
the disablement, and, where the disablement is of a permanent nature, such
disablement as reduces his earning capacity in every employment which he was
capable of undertaking at that time: provided that every injury specified [in
Part II of Schedule I] shall be deemed to result in permanent partial
disablement

• Total disablement means such disablement, whether of a temporary or permanent

nature, as incapacitates a *[employee] for all work which he was capable of
performing at the time of the accident resulting in such disablement

• Provided that permanent total disablement shall be deemed to result from

every injury specified in Part I of Schedule I or from any combination of
injuries specified in Part II thereof where the aggregate percentage of the
loss of earning capacity, as specified in the said Part II against those
injuries, amounts to one hundred per cent. or more
 Workmen’s Compensation Act

Definitions

• Wages includes any privilege or benefit which is capable of being estimated

in money, other than a travelling allowance or the value of any travelling
concession or a contribution paid by the employer of a employee towards any
pension or provident fund or a sum paid to a employee to cover any special
expenses entailed on him by the nature of his employment

• The Central Government or the State Government, by notification in the

Official Gazette, after giving not less than three months' notice of its
intention so to do, may, by a like notification, add to Schedule II any
class of persons employed in any occupation which it is satisfied is a
hazardous occupation, and the provisions of this Act shall thereupon apply,
in case of a notification by the Central Government, within the territories
to which the Act extends, or, in the case of a notification by the State
Government, within the State, to such classes of persons:

• Provided that in making addition, the Central Government or the State

Government, as the case may be, may direct that the provisions of this Act
shall apply to such classes of persons in respect of specified injuries only
 Workmen’s Compensation Act

Employers liability for compensation

(1) If personal injury is caused to a employee by accident arising out of and in the course
of his employment, his employer shall be liable to pay compensation in accordance with the
provisions of this Chapter:

Provided that the employer shall not be so liable –

(a) in respect of any injury which does not result in the total or partial disablement of
the employee for a period exceeding three days;

(b) in respect of any injury, not resulting in death or permanent total disablement caused
by an accident which is directly attributable to—

(i) the employee having been at the time thereof under the influence of drink or drugs, or

(ii) the willful disobedience of the *[employee] to an order expressly given, or to a rule
expressly framed, for the purpose of securing the safety of employees, or

(iii) the willful removal or disregard by the *[employee] of any safety guard or other
device which he knew to have been provided for the purpose of securing the safety of
employee
 Workmen’s Compensation Act

Employers liability for compensation

(2) If an employee employed in any employment specified in Part A of Schedule

III contracts any disease specified therein as an occupational disease peculiar
to that employment, or if a employee, whilst in the service of an employer in
whose service he has been employed for a continuous period of not less than six
months (which period shall not include a period of service under any other
employer in the same kind of employment) in any employment specified in Part B
of Schedule III, contracts any disease specified therein as an occupational
disease peculiar to that employment, or

• if a employee] whilst in the service of one or more employers in any

employment specified in Part C of Schedule III for such continuous period as
the Central Government may specify in respect of each such employment,
contracts any disease specified therein as an occupational disease peculiar
to that employment, the contracting of the disease shall be deemed to be an
injury by accident within the meaning of this section and, unless the
contrary is proved, the accident shall be deemed to have arisen out of, and
in the course of, the employment

Provided that if it is proved -

 Workmen’s Compensation Act

Employers liability for compensation

(a) that an employee whilst in the service of one

or more employers in any employment specified in
Part C of Schedule III has contracted a disease
specified therein as an occupational disease
peculiar to that employment during a continuous
period which is less than the period specified
under this sub-section for that employment and

(b) that the disease has arisen out of and in the

course of the employment, the contracting of such
disease shall be deemed to be an injury by accident
within the meaning of this section
 Workmen’s Compensation Act

Employers liability for compensation

• Provided further that if it is proved that a *[employee] who having

served under any employer in any employment specified in Part B of
Schedule III or who having served under one or more employers in any
employment specified in Part C of that Schedule, for a continuous period
specified under this sub-section for that employment and he has after
the cessation of such service contracted any disease specified in the
said Part B or the said Part C, as the case may be, as an occupational
disease peculiar to the employment and that such disease arose out of
the employment, the contracting of the disease shall be deemed to be an
injury by accident within the meaning of this section

(2A) If a employee employed in any employment specified in Part C of

Schedule III contracts any occupational disease peculiar to that
employment, the contracting whereof is deemed to be an injury by accident
within the meaning of this section, and such employment was under more than
one employer, all such employers shall be liable for the payment of the
compensation in such proportion as the Commissioner may, in the
circumstances, deem just
 Workmen’s Compensation Act

Employers liability for compensation

• No compensation shall be payable to a employee in respect of any

disease unless the disease is directly attributable to a specific
injury by accident arising out of and in the course of his employment

• Nothing herein contained shall be deemed to confer any right to

compensation on a *[employee] in respect of any injury if he has
instituted in a Civil Court a suit for damages in respect of the injury
against the employer or any other person; and no suit for damages shall
be maintainable by a employee in any Court of law in respect of any
injury -

(a) if he has instituted a claim to compensation in respect of the injury

before a Commissioner; or

(b) if an agreement has been come to between the *[employee] and his
employer providing for the payment of compensation in respect of the
injury in accordance with the provisions of this Act
 Workmen’s Compensation Act

Amount of compensation

(a) where death results an from the injury : an amount equal to

fifty per cent. of the monthly wages of the deceased *[employee]
multiplied by the relevant factor; or an amount of *[one lakh and
twenty thousand rupees], whichever is more

(b) where permanent total disablement results from the injury : an

amount equal to sixty per cent. of the monthly wages of the injured
employee multiplied by the relevant factor; one lakh and twenty
thousand rupees, whichever is more

• Relevant factor, in relation to a employee means the factor

specified in the second column of Schedule IV against the entry in
the first column of that Schedule specifying the number of years
which are the same as the completed years of the age of the
*[employee] on his last birthday immediately preceding the date on
which the compensation fell due
 Workmen’s Compensation Act

Amount of compensation

(c) where permanent partial disablement result from the

injury:

(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 that injury; and

(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
 Workmen’s Compensation Act

Amount of compensation

(d) where temporary disablement, whether total or partial,

results from the injury : a half monthly payment of the sum
equivalent to twenty-five per cent. of monthly wages of the
employee, to be paid in accordance with the provisions of sub-
section (2)

• Notwithstanding anything contained in sub-section (1), while

fixing the amount of compensation payable to a employee is
respect of an accident occurred outside India, the
Commissioner shall take into account the amount of
compensation, if any, awarded to such *[employee] in
accordance with the law of the country in which the accident
occurred and shall reduce the amount fixed by him by the
amount of compensation awarded to the *[employee] in
accordance with the law of that country
 Workmen’s Compensation Act

Amount of compensation

(2) The half-monthly payment referred to in clause (d) of sub-section (1) shall
be payable on the sixteenth day -

(i) from the date of disablement where such disablement lasts for a period of
twenty-eight days or more, or

(ii) after the expiry of a waiting period of three days from the date of
disablement where such disablement lasts for a period of less than twenty-eight
days; and thereafter half-monthly during the disablement or during a period of
five years, whichever period is shorter:

• Provided that –

(a) there shall be deducted from any lump sum or half-monthly payments to which
the employee is entitled the amount of any payment or allowance which the
employee has received from the employer by way of compensation during the period
of disablement prior to the receipt of such lump sum or of the first half-
monthly payment, as the case may be; and
 Workmen’s Compensation Act

Amount of compensation

(b) no half-monthly payment shall in any case exceed the

amount, if any, by which half the amount of the monthly wages
of the employee before the accident exceeds half the amount
of such wages which he is earning after the accident

• Any payment or allowance which the employee has received

from the employer towards his medical treatment shall not
be deemed to be a payment or allowance received by him by
way of compensation within the meaning of clause (a) of the
proviso

• The employee shall be reimbursed the actual medical

expenditure incurred by him for treatment of injuries
caused during course of employment
 Workmen’s Compensation Act

Amount of compensation

(3) On the ceasing of the disablement before the date on which any
half-monthly payment falls due there shall be payable in respect
of that half-month a sum proportionate to the duration of the
disablement in that half-month

(4) If the injury of the employee results in his death, the

employer shall, in addition to the compensation under sub-section
(1), deposit with the Commissioner a sum of not less than five
thousand rupees for payment of the same to the eldest surviving
dependent of the *[employee] towards the expenditure of the
funeral of such *[employee] or where the *[employee] did not have
a dependent or was not living with his dependent at the time of
his death to the person who actually incurred such expenditure
 Workmen’s Compensation Act

Comp. to be paid due when - penalty - default

(1) Compensation under section 4 shall be paid as soon as it

falls due.

(2) In cases where the employer does not accept the

liability for compensation to the extent claimed, he shall
be bound to make provisional payment based on the extent of
liability which he accepts, and, such payment shall be
deposited with the Commissioner or made to the employee, as
the case may be, without prejudice to the right of
the*[employee] to make any further claim.

(3) Where any employer is in default in paying the

compensation due under this Act within one month from the
date it fell due, the Commissioner shall--
 Workmen’s Compensation Act

Comp. to be paid due when - penalty - default

(a) direct that the employer shall, in addition to the amount of the
arrears, pay simple interest thereon at the rate of twelve per cent.
per annum or at such higher rate not exceeding the maximum of the
lending rates of any scheduled bank as may be specified by the
Central Government, by notification in the Official Gazette, on the
amount due; and

(b) if, in his opinion, there is no justification for the delay,

direct that the employer shall, in addition to the amount of the
arrears and interest thereon, pay a further sum not exceeding fifty
per cent, of such amount by way of penalty:

Provided that an order for the payment of penalty shall not be passed
under clause (b) without giving a reasonable opportunity to the
employer to show cause why it should not be passed
 Workmen’s Compensation Act

Methods of calculating wages

• Monthly wages means the amount of wages deemed to be payable for a month's service (whether the wages
are payable by the month or by whatever other period or at piece rates), and calculated as follows,
namely:-

(a) where the *[employee] has, during a continuous period of not less than twelve months immediately
preceding the accident, been in the service of the employer who is liable to pay compensation, the
monthly wages of the *[employee] shall be one-twelfth of the total wages which have fallen due for
payment to him by the employer in the last twelve months of that period

(b) where the whole of the continuous period of service immediately preceding the accident during which
the *[employee] was in the service of the employer who is liable to pay the compensation was less
than one month, the monthly wages of the *[employee] shall be the average monthly amount which,
during the twelve months immediately preceding the accident, was being earned by a *[employee]
employed on the same work by the same employer, or, if there was no *[employee] so employed, by a
*[employee] employed on similar work in the same locality

• In other cases [including cases in which it is not possible for want of necessary information to
calculate the monthly wages under clause (b)], the monthly wages shall be thirty times the total wages
earned in respect of the last continuous period of service immediately preceding the accident from the
employer who is liable to pay compensation, divided by the number of days comprising such period.

• Explanation.--A period of service shall, for the purposes of this section be deemed to be continuous
which has not been interrupted by a period of absence from work exceeding fourteen days.
 Workmen’s Compensation Act

Review

(1) Any half-monthly payment payable under this Act, either

under an agreement between the parties or under the order of a
Commissioner, may be reviewed by the Commissioner, on the
application either of the employer or of the employee
accompanied by the certificate of a qualified medical
practitioner that there has been a change in the condition of
the workman or, subject to rules made under this Act, on
application made without such certificate

(2) Any half-monthly payment may, on review under this section,

subject to the provisions of this Act, be continued, increased,
decreased or ended, or if the accident is found to have resulted
in permanent disablement, be converted to the lump sum to which
the workman is entitled less any amount which he has already
received by way of half-monthly payments
 Workmen’s Compensation Act

Commutation of half monthly payments

• Any right to receive half-monthly

payments may, by agreement between the
parties or, if the parties cannot agree
and the payments have been continued for
not less than six months, on the
application of either party to the
Commissioner, be redeemed by the payment
of a lump sum of such amount as may be
agreed to by the parties or determined
by the Commissioner, as the case may be
 Workmen’s Compensation Act

Distribution of compensation

(1) No payment of compensation in respect of a employee whose injury

has resulted in death, and no payment of a lump sum as compensation to
a woman or a person under a legal disability, shall be made otherwise
than by deposit with the Commissioner, and no such payment made
directly by an employer shall be deemed to be a payment of compensation

• Provided that, in the case of a deceased *[employee], an employer may

make to any dependent advances on account of compensation of an
amount equal to three months' wages of such employee and so much of
such amount] as does not exceed the compensation payable to that
dependent shall be deducted by the Commissioner from such
compensation and repaid to the employer

(2) Any other sum amounting to not less than ten rupees which is
payable as compensation may be deposited with the Commissioner on
behalf of the person entitled thereto
 Workmen’s Compensation Act

Distribution of compensation

(3) The receipt of the Commissioner shall be a sufficient discharge in respect

of any compensation deposited with him

(4) On the deposit of any money under sub-section (1), as compensation in

respect of a deceased employee the Commissioner shall, if he thinks necessary,
cause notice to be published or to be served on each dependent in such manner
as he thinks fit, calling upon the dependents to appear before him on such date
as he may fix for determining the distribution of the compensation. If the
Commissioner is satisfied after any inquiry which he may deem necessary, that
no dependent exists, he shall repay the balance of the money to the employer by
whom it was paid. The Commissioner shall, on application by the employer,
furnish a statement showing in detail all disbursements made

(5) Compensation deposited in respect of a deceased *[employee] shall, subject

to any deduction made under sub-section (4), be apportioned among the
dependents of the deceased employee or any of them in such proportion as the
Commissioner thinks fit, or may, in the discretion of the Commissioner, be
allotted to any one dependent
 Workmen’s Compensation Act

Distribution of compensation

(6) Where any compensation deposited with the Commissioner is payable

to any person, the Commissioner shall, if the person to whom the
compensation is payable is not a woman or a person under a legal
disability, and may, in other cases, pay the money to the person
entitled thereto

(7) Where any lump sum deposited with the Commissioner is payable to
a woman or a person under a legal disability, such sum may be
invested, applied or otherwise dealt with for the benefit of the
woman, or of such person during his disability, in such manner as the
Commissioner may direct; and where a half-monthly payment is payable
to any person under a legal disability, the Commissioner may, of his
own motion or on an application made to him in this behalf, order
that the payment be made during the disability to any dependent of
the *[employee] or to any other person, whom the Commissioner thinks
best fitted to provide for the welfare of the employee
 Workmen’s Compensation Act

Distribution of compensation

(8) Where, on application made to him in this behalf or otherwise, the

Commissioner is satisfied that, on account of neglect of children on the part of
a parent or on account of the variation of the circumstances of any dependent or
for any other sufficient cause, an order of the Commissioner as to the
distribution of any sum paid as compensation or as to the manner in which any
sum payable to any such dependent is to be invested, applied or otherwise dealt
with, ought to be varied, the Commissioner may make such orders for the
variation of the former order as he thinks just in the circumstances of the case

Provided that no such order prejudicial to any person shall be made unless such
person has been given an opportunity of showing cause why the order should not
be made, or shall be made in any case in which it would involve the repayment by
a dependent of any sum already paid to him

(9) Where the Commissioner varies any order under sub-section (8) by reason of
the fact that payment of compensation to any person has been obtained by fraud,
impersonation or other improper means, any amount so paid to or on behalf of
such person may be recovered
 Workmen’s Compensation Act

Not to be assigned, attached or charged

• Save as provided by this Act no lump sum or half-monthly payment payable

under this Act shall in any way be capable of being assigned or charged
or be liable to attachment or pass to any person other than the employee
by operation of law nor shall any claim be set off against the same

• Notice and Claim - No claim for compensation shall be entertained by a

Commissioner unless notice of the accident has been given in the manner
hereinafter provided as soon as practicable after the happening thereof
and unless the claim is preferred before him within two years of the
occurrence of the accident or in case of death within two years from the
date of death

• Every such notice shall give the name and address of the person injured
and shall state in ordinary language the cause of the injury and the date
on which the accident happened, and shall be served on the employer or
upon any one of several employers, or upon any person responsible to the
employer for the management of any branch of the trade or business in
which the injured *[employee] was employed
 Workmen’s Compensation Act

Notice and claim

• The State Government may require that any prescribed

class of employers shall maintain at their premises at
which employees are employed a notice book, in the
prescribed form, which shall be readily accessible at
all reasonable times to any injured employee employed
on the premises and to any person acting bona fide on
his behalf

• A notice under this section may be served by delivering

it at, or sending it by registered post addressed to,
the residence or any office or place of business of the
person on whom it is to be served, or, where a notice-
book is maintained, by entry in the notice-book
 Workmen’s Compensation Act

Power to require from employers statements

(1) Where a Commissioner receives information from any source that a *[employee] has died
as a result of an accident arising out of and in the course of his employment, he may send
by registered post a notice to the *[employee]'s employer requiring him to submit, within
thirty days of the service of the notice, a statement, in the prescribed form, giving the
circumstances attending the death of the *[employee], and indicating whether, in the
opinion of the employer, he is or is not liable to deposit compensation on account of the
death

(2) If the employer is of opinion that he is liable to deposit compensation, he shall make
the deposit within thirty days of the service of the notice

(3) If the employer is of opinion that he is not liable to deposit compensation, he shall
in his statement indicate the grounds on which he disclaims liability

(4) Where the employer has so disclaimed liability, the Commissioner, after such inquiry as
he may think fit, may inform any of the dependents of the deceased *[employee] that it is
open to the dependents to prefer a claim for compensation, and may give them such other
further information as he may think fit
 Workmen’s Compensation Act

Reports of fatal accidents and serious injuries

(1) Where, by any law for the time being in force, notice is required to
be given to any authority, by or on behalf of an employer, of any accident
occurring on his premises which results in death or serious bodily injury,
the person required to give the notice shall, within seven days of the
death or serious bodily injury, send a report to the Commissioner giving
the circumstances attending the death or serious bodily injury:

• Provided that where the State Government has so prescribed the person
required to give the notice may instead of sending such report to the
Commissioner send it to the authority to whom he is required to give
the notice

• Serious bodily injury" means an injury which involves, or in all

probability will involve the permanent loss of the use of, or permanent
injury to, any limb, or the permanent loss of or injury to the sight or
hearing, or the fracture of any limb, or the enforced absence of the
injured person from work for a period exceeding twenty days
 Workmen’s Compensation Act

Medical Examination

(1) Where a employee has given notice of an accident, he shall, if the

employer, before the expiry of three days from the time at which service of the
notice has been effected offers to have him examined free of charge by a
qualified medical practitioner, submit himself for such examination, and any
*[employees] who is in receipt of a half-monthly payment under this Act shall,
if so required, submit himself for such examination from time to time:

• Provided that a employee shall not be required to submit himself for

examination by a medical practitioner otherwise than in accordance with
rules made under this Act, or at more frequent intervals than may be
prescribed

(2) If a employee, on being required to do so by the employer under subsection

(1) or by the Commissioner at any time, refuses to submit himself for
examination by a qualified medical practitioner or in any way obstructs the
same, his right to compensation shall be suspended during the continuance of
such refusal or obstruction unless, in the case of refusal, he was prevented by
any sufficient cause from so submitting himself
 Workmen’s Compensation Act

Medical Examination

(3) If a employee, before the expiry of the period within which he is liable
under sub-section (1) to be required to submit himself for medical
examination, voluntarily leaves without having been so examined the vicinity
of the place in which he was employed, his right to compensation shall be
suspended until he returns and offers himself for such examination

(4) Where a *[employee], whose right to compensation has been suspended

under sub-section (2) or sub-section (3), dies without having submitted
himself for medical examination as required by either of those sub-sections,
the Commissioner may, if he thinks fit, direct the payment of compensation
to the dependents of the deceased*[employee].

(5) Where under sub-section (2) or sub-section (3) a right to compensation

is suspended, no compensation shall be payable in respect of the period of
suspension, and, if the period of suspension commences before the expiry of
the waiting period referred to in clause (d) of sub-section (1) of section
4, the waiting period shall be increased by the period during which the
suspension continues
 Workmen’s Compensation Act

Medical Examination

(6) Where an injured *[employee] has refused to be attended by a qualified

medical practitioner whose services have been offered to him by the
employer free of charge or having accepted such offer has deliberately
disregarded the instructions of such medical practitioner, then, if it is
proved that the *[employee] has not thereafter been regularly attended by
a qualified medical practitioner or having been so attended has
deliberately failed to follow his instructions and that such refusal,
disregard or failure was unreasonable in the circumstances of the case and
that the injury has been aggravated thereby, the injury and resulting
disablement shall be deemed to be of the same nature and duration as they
might reasonably have been expected to be if the *[employee] had been
regularly attended by a qualified medical practitioner whose instructions
he had followed, and compensation, if any, shall be payable accordingly
 Workmen’s Compensation Act

Contracting

(1) Where any person (referred to as the principal) in the course of or for the purposes of his
trade or business contracts with any other person (hereinafter referred to as the contractor) for
the execution by or

• under the contractor of the whole or any part of any work which is ordinarily part of the trade
or business of the principal, the principal shall be liable to pay to any *[employee] employed
in the execution of the work any compensation which he would have been liable to pay if that
*[employee] had been immediately employed by him; and

• where compensation is claimed from the principal, this Act shall apply as if references to the
principal were substituted for references to the employer except that the amount of compensation
shall be calculated with reference to the wages of the *[employee] under the employer by whom he
is immediately employed

(2) Where the principal is liable to pay compensation under this section, he shall be entitled to
be indemnified by the contractor, or any other person from whom the *[employee] could have
recovered compensation and where a contractor who is himself a principal is liable to pay
compensation or to indemnify a principal under this section he shall be entitled to be indemnified
by any person standing to him in the relation of a contractor from whom the *[employee] could have
recovered compensation] and all questions as to the right to and the amount of any such indemnity
shall, in default of agreement, be settled by the Commissioner
 Workmen’s Compensation Act

Contracting

(3) Nothing in this section shall be construed as

preventing a *[employee] from recovering
compensation from the contractor instead of the
principal

(4) This section shall not apply in any case where

the accident occurred elsewhere that on, in or
about the premises on which the principal has
undertaken or usually undertakes, as the case may
be, to execute the work or which are otherwise
under his control or management
 Workmen’s Compensation Act

Remedies of employer against strangers

• Where a *[employee] has recovered

compensation in respect of any injury caused
under circumstances creating a legal
liability of some person other than the
person by whom the compensation was paid to
pay damages in respect thereof, the person
by whom the compensation was paid and any
person who has been called on to pay an
indemnity under section 12 shall be entitled
to be indemnified by the person so liable to
pay damages as aforesaid
 Workmen’s Compensation Act

Insolvency of employer

(1) Where any employer has entered into a contract with any insurers in
respect of any liability under this Act to any *[employee], then in the
event of the employer becoming insolvent or making a composition or
scheme of arrangement with his creditors or,

• if the employer is a company, in the event of the company having

commenced to be wound up, the rights of the employer against the
insurers as respects that liability shall, notwithstanding anything
in any law for the time being in force relating to insolvency or the
winding up of companies, be transferred to and vest in the
*[employee], and

• upon any such transfer the insurers shall have the same rights and
remedies and be subject to the same liabilities as if they were the
employer, so, however, that the insurers shall not be under any
greater liability to the *[employee] than they would have been under
the employer
 Workmen’s Compensation Act

Insolvency of employer

(2) If the liability of the insurers to the *[employee] is less than the
liability of the employer to the *[employee], the *[employee] may prove for
the balance in the insolvency proceedings or liquidation

(3) Where in any case such as is referred to in sub-section (1) the

contract of the employer with the insurers is void or voidable by reason of
non-compliance on the part of the employer with any terms or conditions of
the contract (other than a stipulation for the payment of premia), the
provisions of that sub-section shall apply as if the contract were not void
or voidable, and the insurers shall be entitled to prove in the insolvency
proceedings or liquidation for the amount paid to the *[employee]:

• Provided that the provisions of this sub-section shall not apply in any
case in which the *[employee] fails to give the notice to the insurers of
the happening of the accident and of any resulting disablement as soon as
practicable after he becomes aware of the institution of the insolvency
or liquidation proceedings
 Workmen’s Compensation Act

Insolvency of employer

(4) There shall be deemed to be included among the debts which under section 49 of the
Presidency-towns Insolvency Act, 1909 (3 of 1909), or under section 61 of the Provincial
Insolvency Act, 1920 (5 of 1920), or under section 530 of the Companies Act, 1956 (1 of 1956),
are in the distribution of the property of an insolvent or in the distribution of the assets of a
company being wound up to be paid in priority to all other debts, the amount due in respect of
any compensation the liability where for accrued before the date of the order of adjudication of
the insolvent or the date of the commencement of the winding up, as the case may be, and those
Acts shall have effect accordingly

(5) Where the compensation is a half-monthly payment, the amount due in respect thereof shall,
for the purposes of this section, be taken to be the amount of the lump sum for which the half-
monthly payment could, if redeemable, be redeemed if applications were made for that purpose
under section 7, and a certificate of the Commissioner as to the amount of such sum shall be
conclusive proof thereof

(6) The provisions of sub-section (4) shall apply in the case of any amount for which an insurer
is entitled to prove under sub-section (3), but otherwise those provisions shall not apply where
the insolvent or the company being wound up has entered into such a contract with insurers as is
referred to in sub-section (1)

(7) This section shall not apply where a company is wound up voluntarily merely for the purposes
of reconstruction or of amalgamation with another company
 Workmen’s Compensation Act

Compensation to be first charge on assets

• Where an employer transfers his assets

before any amount due in respect of any
compensation, the liability wherefor
accrued before the date of the transfer,
has been paid, such amount shall,
notwithstanding anything contained in
any other law for the time being in
force, be a first charge on that part of
the assets so transferred as consists of
immovable property
 Workmen’s Compensation Act

Returns as to compensation

• The State Government may, by notification in the

Official Gazette, direct that every person
employing *[employees], or that any specified
class of such persons, shall send at such time
and in such form and to such authority, as may
be specified in the notification, a correct
return specifying the number of injuries in
respect of which compensation has been paid by
the employer during the previous year and the
amount of such compensation together with such
other particulars as to the compensation as the
State Government may direct
 Workmen’s Compensation Act

Contracting out

• Any contract or agreement whether made before or after the

commencement of this Act, whereby a *[employee]
relinquishes any right of compensation from the employer
for personal injury arising out of or in the course of the
employment, shall be null and void in so far as it
purports to remove or reduce the liability of any person
to pay compensation under this Act

• Every employer shall immediately at the time of employment

of an employee, inform the employee of his rights to
compensation under this Act, in writing as well as through
electronic means, in English or Hindi or in the official
language of the area of employment, as may be understood
by the employee
 Workmen’s Compensation Act

Penalties

• (1) Whoever -

(a) fails to maintain a notice-book which he is required to

maintain under sub-section (3) of section 10, or

(b) fails to send to the Commissioner a statement which he

is required to send under sub-section (1) of section 10A, or

(c) fails to send a report which he is required to send

under section 10B, or

(d) fails to make a return which he is required to make

under section 16 or
 Workmen’s Compensation Act

Penalties

(e) fails to inform the employee of his rights to

compensation as required under section 17A, shall be
punishable with fine which shall not be less than
fifty thousand rupees but which may extend to one lakh
rupees

(2) No prosecution under this section shall be

instituted except by or with the previous sanction of
a Commissioner, and no Court shall take cognizance of
any offence under this section, unless complaint
thereof is made within six months of the date on which
the alleged commission of the offence came to the
knowledge of the Commissioner
Workmen’s Compensation Act