Ms.

KHUSHBOO BIDAWATKA
M.Com, Company Secretary

Chap 4. Employees’ (Workmen’s) Compensation Act, 1923

Q.1. Doctrine of Assumed Risks.

The Doctrine of Assumed Risks under the Employees' (Workmen's) Compensation Act,
1923 is a legal principle that addresses the relationship between employers and
employees in the context of occupational hazards. In essence, this doctrine asserts that
when employees engage in certain occupations, they are presumed to have acknowledged
and accepted the inherent risks associated with those specific jobs.

Here's a more detailed explanation:

1. Legal Framework:
The doctrine is grounded in the provisions of the Employees' Compensation Act, 1923.
This legislation outlines the rights of workers (or workmen as referred to in the Act) to
receive compensation from their employers in case of injuries or death arising out of and
in the course of employment.

2. Assumption of Inherent Risks:

According to this doctrine, employees are deemed to assume certain risks that are an
integral part of the job they are hired to perform. These risks are typically those that are
inherent to the nature of the work itself. By accepting employment, individuals are
considered to be aware of and consenting to the potential dangers associated with their
specific occupation.

3. Voluntary Acceptance:
Crucial to the doctrine is the concept of voluntariness. Employees, when taking up a
job, are viewed as having voluntarily agreed to the conditions and risks associated with
that particular work. This means that if a job is known to carry certain inherent dangers,
the employee is presumed to have willingly accepted those risks as part of the
employment agreement.

4. Impact on Compensation Claims:

The doctrine significantly influences compensation claims made by employees. If an
injury or accident occurs as a result of a risk that is considered inherent to the job, the
employee may be barred from seeking additional compensation beyond what is stipulated
in the Employees' Compensation Act. This limitation is based on the understanding that
the employee had already accepted these risks when choosing to engage in that specific
occupation.

5. Balancing Rights and Responsibilities:

The doctrine aims to strike a balance between the rights of employees to a safe working
environment and the responsibilities placed on employers to provide such an
environment. It recognizes that certain jobs naturally involve risks, and employees, by
choosing those occupations, assume a level of responsibility for their own safety.

Q.2. Doctrine of Common Employment

 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

The Doctrine of Common Employment, as outlined in the Employees' (Workmen's)

Compensation Act, 1923, is a legal principle that governs situations where an employee
is injured while working alongside a fellow employee under the same employer. In
essence, this doctrine stipulates that if an injury occurs in the course of employment and
involves a co-worker, the injured employee is generally barred from filing a lawsuit
against the co-worker or the employer for additional compensation, beyond what is
provided by the Workers' Compensation Act.
Here's a more detailed explanation:

1. Legal Context:
The doctrine is embedded within the provisions of the Employees' Compensation Act,
1923, which is designed to regulate compensation for work-related injuries or death.

2. Scope of the Doctrine:

When employees work for the same employer and are engaged in the same enterprise
or common employment, the Doctrine of Common Employment comes into play. It
applies to situations where an injury occurs in the course of employment and involves a
co-worker.

3. Limitation on Lawsuits:
The key aspect of this doctrine is that it limits the injured employee's ability to file a
lawsuit against a co-worker or the employer for additional compensation. Instead, the
injured party is directed to seek compensation through the workers' compensation system
outlined in the Act.

4. Workers' Compensation System:

Under the Workers' Compensation Act, injured employees are entitled to receive
compensation for workplace injuries, regardless of fault. The system is designed to
provide a streamlined process for obtaining compensation, with specific benefits outlined
in the Act.

5. Exceptions:
While the Doctrine of Common Employment generally limits lawsuits against
co-workers or employers, there may be exceptions. If an injured employee can
demonstrate that the injury resulted from the willful misconduct of the co-worker or the
employer, they may have grounds for pursuing a separate legal claim.

In summary, the Doctrine of Common Employment in the Employees' (Workmen's)

Compensation Act, 1923 restricts the ability of an injured employee to sue a co-worker or
employer for additional compensation when the injury occurs within the scope of
common employment. Instead, it directs such claims through the established workers'
compensation system, providing a structured framework for addressing workplace
injuries.

Q.3. The main features of Employees’ (Workmen’s) Compensation Act, 1923

 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

The Employees' Compensation Act, 1923, is a legislation in India that provides for the
payment of compensation to employees for injuries arising out of and in the course of
employment.

Here are the main features of the Act:

1. Objective:
The primary objective of the Act is to ensure that employees who suffer injuries or
death during the course of their employment are entitled to receive compensation,
regardless of fault.

2. Scope of Application:
The Act applies to all employees, including workmen, employed in factories, mines,
plantations, construction sites, and certain other hazardous occupations specified in the
Act.

3. Compensation for Injury or Death:

The Act mandates that employers are liable to pay compensation to employees for
injuries caused by accidents arising out of and in the course of employment. In case of
death, compensation is payable to the dependents of the deceased employee.

4. Compensable Injuries:
The Act covers a range of injuries, including accidents, occupational diseases, and
disablement arising out of employment. Compensation is provided for temporary and
permanent disablement.

5. No-Fault System:
The Act follows a no-fault compensation system, meaning that compensation is
provided regardless of whether the employer or the employee was at fault. This
eliminates the need for the injured party to prove negligence or liability.

6. Compensation Amount:
The amount of compensation is determined based on the nature of the injury, the
monthly wages of the employee, and other factors specified in the Act. There are defined
schedules for different types of injuries and degrees of disablement.

7. Employer's Liability:
Employers are strictly liable to pay compensation, and they are required to secure the
payment of compensation by either obtaining insurance or providing financial security as
specified in the Act.

8. Reporting of Injuries:
Employers are obligated to report any employment-related injury resulting in
disablement or death to the appropriate authorities as per the timelines outlined in the
Act.

9. Notice of Accident:
 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

Employees are required to give notice of the accident causing the injury to the
employer within a specified period, unless there is a reasonable excuse for the delay.

10. Medical Expenses:

The Act provides for the payment of reasonable medical expenses incurred by the
injured employee for the treatment of the injury.

11. Appeals:
The Act includes provisions for appeals to higher authorities in case of disputes related
to compensation amounts or other matters.

12. Penalties for Non-Compliance:

Non-compliance with the provisions of the Act, such as failure to secure compensation,
may result in penalties for employers.

Q.4. Definitions:

1. Dependant:
In the context of the Employees' Compensation Act, 1923, a "dependent" refers to
individuals eligible to receive compensation in case of the death of a covered workman.
Dependents include the widow, children (legitimate or illegitimate), and, if there is no
widow or children, may extend to parents or siblings who were financially dependent on
the deceased workman. The Act outlines specific criteria and compensation amounts for
each category of dependents.

2. Employee:
The Employees' Compensation Act, 1923, is an Indian legislation that provides for the
payment of compensation to employees or their dependents in case of injuries or death
arising out of and in the course of employment. The term "employee" under this act is
broadly defined to cover any person who is:

1. A railway servant as defined in Section 3 of the Indian Railways Act, 1890, and 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.

2. A master, including a seaman, working on a ship registered in India, and, if the master
is ordinarily resident in India.

3. Employed in any such capacity as is specified in Schedule II of the Act, if the

employer and the employee have agreed to be governed by the provisions of the Act.

4. Employed in any such capacity as may be prescribed under the Act.

 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

It's important to note that the definition of "employee" under the Employees'
Compensation Act is comprehensive and includes a wide range of workers, making it
applicable to various industries and occupations. The Act ensures that employees or their
dependents receive compensation for injuries or death resulting from employment-related
accidents or occupational diseases.

3. Total Disablement:
Under the Employees' Compensation Act, 1923, "total disablement" refers to a condition
where an employee is completely incapacitated from working due to a work-related
injury or occupational disease. The Act provides for compensation to be paid to the
employee in the case of total disablement.

The compensation for total disablement is determined based on a percentage of the

employee's monthly wages and the nature of the disablement. The Act categorizes total
disablement into two main types:

1. Total Permanent Disablement (TPD): This refers to a condition where an employee is

permanently and completely disabled, rendering them incapable of performing any kind
of gainful employment for the rest of their life.

2. Total Temporary Disablement (TTD): This refers to a temporary condition where an

employee is completely incapacitated but is expected to recover partially or fully over
time. During the period of temporary disablement, the employee is entitled to receive
compensation, which is a percentage of their monthly wages.

The percentage of monthly wages granted as compensation for total disablement may
vary depending on the specific circumstances and nature of the injury or disability. The
Act provides a schedule that outlines the compensation payable for different types of
injuries and degrees of disablement.

It's important for employers to adhere to the provisions of the Employees' Compensation
Act and ensure that employees who suffer total disablement due to work-related incidents
receive the appropriate compensation as per the law. This compensation is intended to
provide financial support to the affected employees and their dependents.

Q.5. Employer’s liability for compensation to the employees:

Section 3 of the Employees' Compensation Act, 1923, outlines the liability of employers
to compensate their employees for injuries or death arising out of and in the course of
employment.

Here is an explanation of Section 3:

1. Extent of Employer's Liability:
- Section 3(1) of the Act states that when a personal injury is caused to an employee by
an accident arising out of and in the course of employment, the employer shall be liable
to pay compensation in accordance with the provisions of the Act.
 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

2. Conditions for Employer's Liability:

- For an employer to be liable under Section 3, the injury or accident must occur during
the course of employment. The Act covers a wide range of employment-related injuries,
including accidents that happen on the premises, during work-related activities, or due to
occupational diseases arising from employment.

3. Scope of Compensation:
- The compensation includes medical expenses, disablement benefits, and death
benefits, as specified in the subsequent sections of the Act. The Act provides a schedule
outlining the compensation payable for various types of injuries and degrees of
disablement.

4. Exceptions/ Defences available with Employer:

- Section 3(2) of the Act lists specific exceptions where the employer is not liable to
pay compensation. Under subsection (1) of section the liability of the employer to pay
compensation is dependent the following four conditions:
1. Personal injury must have been caused to an employee;
2. Such injury must have been caused by an accident;
3. The accident must have arisen out of and in the course of employment; and
4. The injury must have resulted either in death of the employee or in his total or partial
disablement for a period exceeding three days,

The employer shall not be liable to pay compensation in the following cases:
(a) If the injury did not result in 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 the
employer can plead
(i) that the employee was at the time of accident under the influence of drinks or drugs;
(ii) that the employee wilfully disobeyed an order expressly given or a rule expressly
framed for the purpose of securing safety of employees; and
(iii) that the employee, having known that certain safety- guards or safety devices are
specifically provided for the purpose of securing the safety of the employee; wilfully
disregarded or removed the same.

5. Insurance:
- Employers are required to take out and maintain insurance to cover their liability
under the Act. This is an important aspect of ensuring that compensation is readily
available when needed.

6. Notice of Accident:
- Section 10 of the Act requires the employer to report accidents causing injuries to the
nearest Employees' State Insurance (ESI) office within seven days of the occurrence.

7. Penalties for Non-Compliance:

 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

- Failure to comply with the provisions of the Act, including not providing
compensation or not maintaining insurance, can result in penalties for the employer.

It's essential for employers to be aware of and comply with the provisions of Section 3 of
the Employees' Compensation Act to ensure the well-being of their employees and to
fulfill their legal obligations in the event of work-related injuries or fatalities.

Q.6. Amount of Compensation (Sec. 4):

Subject to the provisions of this Act, the amount of compensation shall be as follows,
namely:

(1) Compensation for death: Where death results from an injury, the amount of
compensation shall be equal to 50 per cent of the monthly wages of the deceased
employee multiplied by the relevant factor for completed years of age on the last
birthday or Rs. One lakh twenty thousand, whichever is more.

The formula for calculating the amount of compensation in case of death resulting from
an injury will be as follows:
50 x Monthly wages x Relevant factor
100
or Rs. 1,20,000, whichever is more.

Examples:
(a) An employee drawing a monthly wage of Rs. 3,000 meets with an accident while
working on a machine and dies on 12th March, 2019. He was born on 14th July, 1965.
The amount of compensation payable to him will be determined as follows:

Completed years of age on 12th March, 2019 = 34 Relevant factor for age 54 =
199.40

Amount of compensation = 50% of Rs. 3,000 × 199.40 or Rs. 1,20,000, whichever is

more.

= 50 × 3000 × 199.40 = Rs. 2,99,100

100

Hence, the employee will get Rs. 2,99,100.

(b) An employee drawing a monthly wage of Rs. 6,000 dies on 10th November, 2019 as a
result of an injury arising out of and in the course of employment. He was born on 23rd
May, 1964. The amount of compensation payable to him will be calculated as follows:

Completed years of service as on 10th November, 2019 = 55

Relevant factor for age 55 = 135.56

 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

Amount of compensation = 50% of Rs. 6,000 x 135.56 or Rs. 1,20,000, whichever is

more.

i.e. Rs. 406,680

Hence the employee will get Rs. 406,680.

In order to claim compensation in case of death of an employee, it is necessary for the

claimants to prove that they were dependent on the deceased. A legal representative who
is not a dependant is not entitled to claim compensation for the death of the deceased
under the Act.

(2) Compensation for permanent total disablement (Sec 4):

Where permanent total disablement results from an Injury, the amount of compensation
payable shall be equal to 60 per cent of the monthly wages of the injured multiplied
by the relevant factor, or Rs. 1,40,000, whichever is more.

The formula for calculating the amount of compensation in case of permanent total
disablement resulting from an injury, will be as follows:

60 x Monthly wages x Relevant factor

100

or Rs. 1,40,000, whichever is more.

Example: If in examples (a) and (b) given earlier, the accident results in permanent total
disablement, the compensation payable would be as follows:

Example:
(a) Amount of compensation = 60% of Rs. 3,000 x 199.40 OR Rs. 1,40,000,
whichever is more.

=60 /100 × 3,000 × 199.40 = Rs. 3,58,920.

Hence the worker will get Rs. 3,58,920

(b) Amount of compensation = 60% of Rs. 6,000 x 135.56 or Rs. 1,40,000, whichever
is more.

=60 /100 × 6,000 x 135.56 = Rs. 4,88,016

Hence the employee will get Rs. 4,88,016

Sec. 4 (1) (c) provides that where permanent partial disablement results from an injury,
the amount of compensation shall be as follows:
 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

(a) In the case of an injury, the amount of compensation shall be 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. Thus if the loss of earning capacity caused by an injury is 60 percent, the
amount of compensation shall be 60 percent of compensation payable in case of
permanent total disablement.

Example: A worker whose monthly wages is Rs. 2,000 loses one hand as a result of
injury caused to him on 14th September, 2019. On 1st August, 2019 he had completed 30
years of age. Calculate the amount of compensation payable to him.

As per Schedule I, the injury results in 60 per cent loss of earning capacity. The amount
of compensation, therefore, will be 60 per cent of the compensation payable in case of
permanent total disablement, it shall be calculated as follows:

Relevant factor for age 30 is 207.98.

=60/100 x 2000 x 207.98
Compensation = Rs. 2,49,576.

Q.7. Notice and claims of the Accident (Sec 10):

Section 10 of the Employees' Compensation Act, 1923, pertains to the notice and claims
of accidents. Here is an explanation of this section:

1. Notice of Accident:
- As per Section 10(1), in case of an accident resulting in an employee's injury, the
employer must be notified as soon as possible. This notice is required to be given within
six days of the occurrence of the accident, or in case of the death of the employee, within
two days of obtaining knowledge of the death. The notice should include details such as
the name and address of the injured employee, the cause and nature of the injury, and the
date and time of the accident.

2. Claim for Compensation:

- Section 10(1A) specifies that within 30 days from the occurrence of the accident, the
employee or someone on their behalf should send a claim for compensation to the
employer. If the employee is unable to give notice or make the claim due to physical or
mental incapacity, the time limit is extended to 30 days from when the legal
representative or guardian is able to do so.

3. Failure to Give Notice:

- Section 10(2) addresses the situation where the failure to give notice or make a claim
is due to a reasonable cause or because the employer is aware of the accident. In such
cases, the Commissioner (a Workers' Compensation Commissioner) has the authority to
allow the notice or claim to be given or made at any time within six months of the
accident.
 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

Exceptions:
- Section 10(3) provides flexibility for cases where the Commissioner is satisfied that
the delay in giving notice or making a claim does not prejudice the employer. In such
instances, the Commissioner may admit the notice or claim after the specified time limit.

Penalties for Non-Compliance:

- Section 10(4) outlines penalties for employers who fail to report accidents or do not
maintain records of accidents, as required by the Act. The penalties may include fines.

In summary, Section 10 of the Employees' Compensation Act emphasizes the importance

of promptly notifying employers of work-related accidents and submitting claims for
compensation within the stipulated time frames. However, the Act also allows for some
flexibility in cases where delayed notice or claims can be reasonably justified. Employers
should be aware of these provisions and take necessary steps to comply with the reporting
requirements outlined in Section 10.

Q.8. Obligations of Employers and Workmen

Employers:
(1) The employer has a duty to inform the employee of his right to compensation. Such
information must be given in writing in English, Hindi or relevant official damage to the
employee at the time of employing him. A failure to inform the employee is an offense
punishable with fine ranging from Rs. 50,000 to Rs. 1 lakh.

(2) Pay compensation for the employment injury or deposit the employee Compensation
expenses amount with the Commissioner for Workmen’s compensation as soon as it falls
due.

(3) Do not deduct from the compensation amount any expenses incurred by the workman
for his medical treatment.

(4) Notify to the Commissioner, or any other authority specified by the Government for
this purpose, any accident occurring premises which results in death or serious bodily
injury, explaining the circumstances attending death or serious Injury within seven days
of occurrence.

(5) Submit an annual return to the Government 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 may be
required by the authority concerned.

(6) Arrange to get registered any agreement made with the worker or his dependents
settling the amount of lump-sum payable as compensation, or by way of redemption of
half-monthly payments on account of temporary disablement, with the Commissioner.

Workmen:
 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

(1) Give notice of the accident and the occupational disease in the prescribed form for
claiming compensation.

(2) Submit a medical examination by a qualified medical practitioner and follow the
treatment and instructions given by him.

Q.9. Sec. 4 provides for compensation for:

(1) Death,
(2) Permanent total disablement,
(3) Permanent partial disablement, and
(4) Temporary disablement, whether total or partial.