UNIT-V

Workmen Compensation Act, 1923

Objectives of the act
The Act, aims to provide workmen and/or their dependents some relief or
compensation in case of accidents arising out of and in the course of employment
and causing either death or disablement (partial or total) of workmen

Scope and Coverage

 The Act extends to the whole of India.
 It applies to workmen employed in factories, mines, plantations, transport
establishments, construction work, railways, ships, circuses, & other
hazardous occupations & employments specified in Schedule II to the Act.
 The coverage of this act is also to cooks employed in hotels and restaurants.
 The Act does not apply to members of Armed Forces of the Union &
workmen who are covered by the ESI Act, 1948.
 Workmen Compensation Act, 1923
About the Act
Chapter -1 preliminary
Chapter -1I Employees Compensation
Chapter -III Commissioners
Chapter -IV Rules

Chapter -1 preliminary
Short title, extent and commencement (Sec 1)
Definition (Sec 2)
Commissioner (Sec 2(1)(b))
Compensation (Sec 2(1)(c))
Dependant (Sec 2(1)(d))
Employee (Sec 2(1)(dd))
Employer (Sec 2(1)(e))
Managing Agent (Sec 2(1)(f))
Minor (Sec 2(1)(ff))
Partial Disablement (Sec 2(1)(g))
Prescribed (Sec 2(1)(h))
Qualified Medial Practitioner (Sec 2(1)(i))
Seaman (Sec 2(1)(K))
Total Disablement (Sec 2(1)(L))
Wage (Sec 2(1)(m))
Dependant (Sec 2(1)(d))
(I) a widow, a minor legitimate or adopted son and unmarried
legitimate or adopted daughter, or a widowed mother.
(II) 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.
(III) And any of the following were wholly or partly dependent
on the workman at the time of his death—
 a widower,
 a parent other than a widowed mother,
 a minor illegitimate son,
 a unmarried illegitimate daughter or a daughter legitimate or
illegitimate or adopted if married & a minor or if widowed &
minor,
 a minor brother or an unmarried sister or a widowed sister if a
minor,
 a widowed daughter-in-law,
 a minor child of pre-deceased son & daughter where no parent of
the child is alive &
 a paternal grandparent if not the parent of the workman is alive
Disablement
Disablement means loss of capacity to work or to move. Disablement of
workman may result in loss or reduction of his earning capacity. In the later case, he
is not able to earn as much as he used to earn before his disablement.
Disablement may be (1) partial, or (2) total.
Further it may be (i) permanent, or (i) temporary
Partial disablement-2.1(g)
This means any disablement as reduces the earning capacity of a workman
as a result of some accident. It may be temporary or permanent.
Temporary partial disablement means any disablement as reduces the earning
capacity of a workman in any employment in which he was engaged at the time of
the accident resulting in the disablement.
Permanent partial disablement is one which reduces the earning capacity of a
workman in every employment which he was capable of undertaking at that time of
injury
Total disablement’ means such disablement, whether of a temporary or permanent
nature, as incapacitates a workman for all work which he was capable of performing
at the time of the accident resulting in such disablement
Workman[Sec.2(1)(n)]
 ‘workman’ means any person who is-
 (a) 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
 (b) a master, seaman or other member of the crew of a ship, etc
 It does not include a person whose employment is of casual nature.
 Chapter-1I--Employees Compensation

Employer’s Liabilities For Compensation[Sec.3]

(a) In cases of occupational disease
(b) In case of personal injury
(i) Personal injury
(ii) Accident
(iii) Arising out of employment and in the course of employment
Arising out of employment
Arising in the course of employment
(iv) Theory of notional extension of employment
(v) When employer is not liable
(c) Suit for damages in a Court barred
 EMPLOYER’S LIABILITY FOR COMPENSATION (Sec-3)
Section 3 of the Act provides for employers liability for compensation in
case of occupational disease or personal injuries and prescribes the
manner in which his liability can be ascertained.
(a) In cases of occupational disease
(i) Where 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, the
contracting of disease shall be deemed to be an injury by
accident arising out of and in the course of employment.
(II). Where the employee employed in any employment specified in Part B
of Schedule III, for a continuous period of not less than six months under
the same employer, and whilst in the service contracts any disease
specified in the Part B of Schedule III, the contracting of disease shall be
deemed to be injury by accident arising out of and in the course of
employment

(iii) If an employee whilst in service of one or more employers (not

necessarily the same employer) in any employment specified in Part C of
Schedule III for such continuous period as the Central Government may
specify, contracts any disease, even after he ceased to be in the service of
any employer and disease arose out of such employment, specified in the
Schedule, the contracting of disease shall be deemed to be an injury by
accident arising out of and in the course of employment.
(iv) If it is proved:
(a) that the 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;
(v) The Central Government or the State Government after giving, by
notification in the Official Gazette, not less than three months notice of its
intention so to do, may, by a like notification, add any description of
employment to the employments specified in Schedule III, and shall specify
in the case of employments so added the diseases which shall be deemed
for the purposes of this section to be occupational diseases peculiar to
those employments respectively, and thereupon the provisions of Sub-
section (2) shall apply in the case of a notification by the Central
Government, within the territories to which this Act
extends or, in case of a notification by the State Government, within the
State as if such diseases had been declared by this Act to be occupational
diseases peculiar to those employments
(b) In case of personal injury
(i) Personal injury
Normally, Injury implies physical or bodily injury caused
by an accident. However, such personal injury will also include nervous
shock or break-down or mental strain.
(ii) Accident
It has been defined as a mishap or an untoward event
which is not expected or designed. What the Act intends to cover is
what might be expressed as an accidental injury.
(iii) Arising out of employment and in the course of employment
(a.) Arising out of employment
The expression “arising out of employment” suggests some
causal connection between the employment and the accidental injury

(b.) Arising in the course of employment

The expression “in the course of employment” suggests the period
of employment and the place of work. In other words, the workman, at the
time of accident must have been employed in the performance of his duties
and the accident took place at or about the place where he was
performing his duties.
(iv) Theory of notional extension of employment (Doctrine of Notional Extension)
The expression in the course of his employment', connotes not only actual work but
also any other engagement natural and necessary thereto, reasonably extended both as regards
work-hours and work-place. It refers to the time during which the employment continues. .
However, this is subject to the theory of notional extension of the employer's premises so as
to include an area which the workman passes and re-passes in going to and in leaving the
actual place of work. There may be some reasonable extension in both time and place and a
workman may be regarded as in the course of his employment even though he had not
reached or had left his employer's premises. This is also called as the Doctrine of Notional
Extension. The doctrine of notional extension could not be placed in a strait jacket; it was
merely a matter of sound common sense as to when and where and to what extent this
doctrine could be applied
(v) When employer is not liable
(a) in respect of any injury which does not result in the total or partial disablement of the
workman 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 workman having been at the time thereof under the influence of drink or
drugs, or
(ii) the willful disobedience of the workman to an order expressly given, or to a
rule expressly framed, for the purpose of securing the safety of workmen, or
(iii) the willful removal or disregard by the workman of any safety guard or
other device which he knew to have been provided for the purpose of securing the safety of
workmen
(c) Suit for damages in a Court barred
Under Section 3(5), an employee is not entitled to any compensation under
the workmen’s Compensation Act, 1923, if he has instituted, in a Civil
Court, a suit for damages against the employer or any other person.
Similarly, an employee is prohibited from instituting a suit for
damages in any court of law,
(a) if he has instituted a claim to compensation in respect of the
injury before a Commissioner; or
(b) if the employee and the employer have entered into an
agreement for the payment of compensation in accordance with the
provisions of this Act.
EMPLOYER’S LIABILITY WHEN CONTRACTOR IS ENGAGED
Section 12 of the Act envisages the employer’s liability to pay compensation
to a contractor
(I). But now Section 12(1) makes the employer liable for compensation to
such employees hired by the contractor under following circumstances:
(a) The contractor is engaged to do a work which is part of the trade or
business of the employer (called principal).
(b) The employee were engaged in the course of or for the purpose of his
trade or business.
(c) The accident occurred in or about the premises on which the principal
employer has undertaken or undertakes to execute the work concerned.
(ii) According to Section 12(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 relation
of a contractor from whom the employee could have recovered
compensation and all questions as the right to and the amount of any such
indemnity shall, in default of agreement, be settled by the Commissioner.
(iii) The above provision, however, does not prevent an employee from
recovering compensation from the contractor instead of the employer, i.e.,
the Principal. [Section 12(3)]
(iv) This section shall not apply in any case where the accident occurred
Amount of compensation
Amount of compensation is payable in the event of an employee
meeting with an accident resulting into temporary or permanent disability
or disease as stated in Schedule II and III in terms of Section 4 of the Act,

The amount of compensation payable to a workman depends on

the nature of injury caused by accident,
the monthly wages of the workman concerned, and
the relevant factor for working out lump sum equivalent of
compensation amount as specified in Schedule IV.
 There is no distinction between an adult and a minor worker
with respect to the amount of compensation
In case of death resulting from injury, the amount of
compensation shall be equal 50% of the monthly wages of the
deceased workman multiplied by
the relevant factor. Or an amount of Rs 80,000/- whichever
is more.
Example:
A workman is employed in a factory on a monthly wage of Rs 3000.
While working he met with an accident and dies on oct 2000. His
date of birth is July 18 , 1970. The amount of compensation
payable to his dependent would be
50* monthly wages* Relevant factor of age 30
100
0r 80,000 whichever is higher
50* 3000* 207.98 = 3,11,970
100
Since Rs 311970 is more than 80000 the compensation payable to
him shall be Rs 311,970
Example
In case of permanent total disablement resulting from the injury,
the amount of compensation shall be 60% of the monthly wages of
the injured workman multiplied by the relevant factor or Rs
90,000/- thousand whichever is more.
For the above example the compensation would be
60* 3000* 207.98 = 3,74,365
100
Since Rs 3,74364 is more than 90,000 the amount of compensation
payable should be Rs 3, 74364
Compensation to be paid when due and penalty for default
Time of payment of compensation: Section 4A of the Act provides
that compensation under Section 4 shall be paid as soon as it falls due.
Compensation becomes due on the date of death of employee and not
when Commissioner decides it
Where an employer is in default in paying compensation, he would
be liable to pay interest thereon and also a further sum not exceeding fifty
percent of such amount of compensation as penalty. The interest and the
penalty stated above is to be paid to the employee or his dependent as the
case may be
NOTICE AND CLAIM
(a) No claim for compensation shall be entertained by a Commissioner
unless the 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. (Section 10)
(b) 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.

(c) 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.

(d) 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
OBLIGATIONS AND RESPONSIBILITY OF AN EMPLOYER
(i) Power of Commissioner to require from employers statements
regarding fatal accidents
(a) Where a Commissioner receives information from any source that an
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
(b)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.
(c) 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.
(d) 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. (Section 10A)
(i) (ii) To submit reports of fatal accidents and serious bodily
injuries
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 in 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
MEDICAL EXAMINATION
According to Section 11 of the Act:
(i) Where an employee has given notice of an accident, he shall, if
the employer, before the expiry of 3 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 employee who is in receipt of half monthly payment
under this Act shall, if so required, submit himself for such examination
from time to time as per the rules under the Act.
(ii) If an employee 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.
(iii) If an employee, 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 officers himself for
such examination.
(iv) Where an employee, whose right to compensation has been
suspended under sub-section (ii) or subsection (iii), dies without having
submitted himself for medical examination as required by either of those
subsections, the Commissioner may, if he thinks fit, direct the payment of
compensation to the dependants of the deceased employee.
 (v) Where under sub-section (ii) or sub-section (iii) 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 (i) of Section 4, the waiting period shall be increased by the period
during which the suspension continues.

(vi) 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 had 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.
 SCHEDULE I
[See Section 2(1) and (4)]
PART I
List of Injuries Deemed to Result in Permanent Total Disablement

Sl. No. Description of injury

Percentage of
loss of earning
capacity
1. Loss of both hands or amputation at higher sites
100
2. Loss of a hand and foot
100
3. Double amputation through leg or thigh, or amputation through
leg or thigh on one side and loss of other foot
100
4. Loss of sight to such an extent as to render the claimant
unable to perform any work for which eye sight is essential
100
5. Very severe facial disfigurement
100
6. Absolute deafness 100
PART II
List of Injuries Deemed to Result in Permanent Partial