Tuesday, April 16, 2024

Employee’s Compensation Act, 1923: Study of Employer’s Liability & Non-Liability for Compensation

Employees are any company or organisation’s very important and useful resource. One of the essential elements in employee performance is to attain objectives. Successful employees meet deadlines, make gross sales and build the model by way of optimistic customer interactions. Each employee needs a secured job and desires to get compensation for the bills he has incurred. It is a requirement that must be fulfilled by the organisation whether or not it’s small scale or massive scale, in any case, its success is dependent upon its workers. Due to this fact, the safety of workers’ and their security is a prime precedence of an employer. The growing use of the equipment and consequent rise at risk to workmen made it crucial that they need to be shielded from hardship arising from accidents. This paper offers with the questions as to underneath what circumstances compensation may be claimed and under what conditions there no is a liability to pay compensation.

The “Employees Compensation Act, 1923” was enacted to offer fee within the type of compensation by the employers to the employees for any accidents suffered in an accident. It is without a doubt one of the earliest labour welfare and social safety laws enacted in India. Earlier this Act was generally known as the Workmen Compensation Act, 1923. It was named as Employee’s Compensation Act on 18th January 2010 as now employees in clerical capability are additionally eligible for compensation.

An employee who’s placing in great efforts within the work, would want to get some advantages in return. When the precept of vicarious legal responsibility is utilized, the employer is liable to pay compensation regardless of worker’s negligence. Employer anticipates it as damages payable to the workers however it’s really a reduction for the workers. An employer turns into liable when workers have sustained accidents by any accident or unavoidable conditions in the course of the course of employment. An worker who’s a part-time employee would still be entitled to get the advantages under the Act.

To be eligible for the advantages underneath the Workers’ Compensation Act, the next necessities should be fulfilled:

  1. The person must be an employee of the Company or Organisation.
  2. The person must have been injured on the office in the middle of employment.

Employer’s liability for payment of Compensation

Under Part 3(1) of the Employees Compensation Act, 1923[2], if personal injury is prompted to an employee accidentally arising out of and in the middle of his employment, his employer shall be liable to pay compensation.

Under this Section, an employee who dies or suffers partial or whole disablement for greater than 3 days or everlasting whole disablement resulting from accident is entitled to get compensation from employer.

Nevertheless, with a view to succeed underneath Part 3(1) for claiming compensation, it must be proved by the employee that,

  1. there was an accident,
  2. the accident had a causal connection with the employment and
  3. the accident will need to have been suffered in course of employment.

The idea of ‘Arising out of Employment’

The phrase “arising out of employment” isn’t merely confined to the nature of the employment. The phrase applies to conditions, obligations and incidents of employment as effectively. If by purpose of any of those elements the workman is under danger and suffers harm, then the harm can be one which arises “out of employment.”

In Lancashire and Yorkshire Railway Co. v. Highley[3], the next take a look at was laid down for figuring out whether or not an accident “arose out of the employment”:

1) Was it a part of the injured particular person’s employment to hazard, to undergo, or to try this which prompted his harm? If sure, the accident arose out of his employment. If nay, it didn’t, as a result of, what it was not a part of the employment to hazard, to undergo, or to do, can’t effectively be the reason for an accident arising out of the employment.

2) To ask if the reason for the accident was inside the sphere of the employment, or was one of many peculiar dangers of the employment, or fairly incidental to the employment, or conversely was an added peril and out of doors the sphere of the employment, are all other ways of asking whether or not it was part of his. employment,

3) The workman ought to have acted as he was performing or ought to have been within the place during which he was, whereby in the middle of that employment he sustained harm.

In Oriental Hearth and General Insurance Company Limited v. Sunderbai Ramji[4], the Gujarat High Court decided the scope of the expression ‘accident arising out of employment’ occurring underneath Part 3 of the Act. On this case, the deceased labourer was doing work involving arduous labour and strenuous bodily exertion. One morning after 3 hours of labour, he had suffered chest ache and subsequently fainted. He was declared useless at Hospital.

The Commissioner discovered that deceased was concerned in a really heavy and hard labour work, which undoubtedly would have an effect on the bodily effectivity and well being, and inferred that the labourer died due to the character of his job. It means he died resulting from an accident arising out of employment lined underneath Part 3 of the Act

On enchantment the Excessive Courtroom upheld the conclusion of the discovered Commissioner that the deceased died of an unintended harm arising out of and in the middle of his employment is totally justified. The non-public harm ensuing into loss of life has direct and proximate nexus with employment.

The idea of ‘in the course of his employment’

The phrase “in the middle of the employment” means in the middle of the work which the workman is employed to do and which is incidental to it.

The Doctrine of Notional Extension offers the scope of the phrase “in the middle of the employment. As a rule, the employment of a workman doesn’t begin till he has reached the place of employment and doesn’t proceed when he has left the place of employment. The journey to and from the place of employment is excluded. Nevertheless, as per the Notional

Extension concept there might be affordable extension in fact of employment by way of time and place and a workman could also be thought to be in the middle of his employment despite the fact that he had not reached or had left his employer’s premises.

There’s a notional extension of each the entry and exit of office by time and house. The scope of such extension should essentially rely on the circumstances of a given case. Employment might finish or might start not solely when the worker begins to work or leaves his instruments but additionally when he makes use of the technique of entry and egress to and from the place of employment.

Read Also: All that you must know about Fixed Term Employment in India

In General Manager, B. E. S. T. Enterprise, Bombay v. Mrs. Agnes[5], a public utility transport service run by the Bombay Municipal Company, owned a number of buses and employed a employees, together with bus drivers, for conducting the stated service. The deceased driver completed his work for the day. After leaving the bus within the depot, he boarded one other bus with a view to go to his residence. Bus collided with a parked lorry. On account of the stated collision, the he was thrown out on the highway and bought injured. Later he died within the hospital. His widow filed an application in the Court of the Commissioner for compensation.

The Supreme Court stated that in view of the long distances to be lined by the workers, the Company, as a situation of service, offers a bus for amassing all of the drivers from their homes in order that they could attain their depots in time and to take them again after the day’s work. They’re on condition that facility without any consideration as a result of effectivity of the service calls for it. The Court observed that, The Supreme Court held that when a driver when going residence from the depot or coming to the depot makes use of the bus, any accident that occurs to him is an accident in the middle of his employment.

“The employment doesn’t essentially finish when the “down device” signal is given or when the workman leaves the precise workshop the place he’s working. There’s a notional extension at each the entry and exit by time and house. The scope of such extension should essentially rely on the circumstances of a given case. The doctrine of notional extension of employment developed within the context of particular workshops, factories or harbours, equally applies to such a bus service which supplied to employees to get to the job on time and reaching their home without additional pressure contributing to their total effectivity. The bus service is used as a privilege and a matter of proper. Their office will get notionally prolonged by advantage of this service.”

Employer’s liability in case of occupational ailments

There are particular occupations which resulting from their nature expose employees to explicit diseases which are inherent, like-

  • Ailments brought on by work in compressed air.
  • Infra-red radiations.
  • Pores and skin ailments resulting from chemical or leather-based processing items.
  • Listening to impairment brought on by noise.
  • Lung most cancers brought on by asbestos mud.
  • Ailments resulting from the impact of maximum weather conditions.

For instance- Miners are at a threat of growing a illness known as silicosis. Typically miners additionally develop lung ailments resulting from publicity to mud. The individuals who work in agricultural lands, develop ailments by means of spraying of pesticides. These pesticides are poisonous in nature and are well being hazards to many farmers.

There are millions of workplaces the place, occupation itself is harmful in nature.

Half A of Schedule III

Part 3(2) of the Act offers that if an worker employed in any employment laid out in Half A of Schedule III contracts any illness specified therein as an occupational illness, or if an worker, while within the service of an employer in whose service he has been employed for a steady interval of not lower than 6 months (which shall not embody a interval of service underneath another employer in the identical sort of employment). It shall be deemed to be an harm accidentally until opposite is proved. Thus, employer can be liable to pay compensation.

Half B of Schedule III

In any employment laid out in Half B of Schedule III, contracts any illness specified therein as an occupational illness peculiar to that employment, it shall be deemed to be an harm accidentally arising out of or in the middle of the employment, making the employer liable to pay compensation.

Half C of Schedule III

The place in any employment laid out in Half C of Schedule III worker contracts any illness, employer shall be liable:

  • If an worker was within the service of a number of employers for such steady interval because the Central Authorities might specify in respect of every such employment, and If worker contracts any illness specified therein as an occupational illness peculiar to that employment,

If the above circumstances are fulfilled, the contracting of the illness shall be deemed to be an harm accidentally inside the which means of Part 3 and, until the opposite is proved, shall be deemed to have arisen out of, and in the middle of the employment and employer shall be liable to pay compensation underneath Part 3(1) of the Act.

Employer’s Non-liability for fee of Compensation

As per Part 3(1) of the Workers Compensation Act, 1923, the employer will not be liable to pay compensation in following circumstances:

  1. If the harm doesn’t finish in your complete or partial disablement of the worker for a interval exceeding three days.
  2. If the harm, not main in loss of life or everlasting whole disablement, is brought on by an accident which is straight attributable to: 
  • The worker having on the time of the accident is underneath the effect of drink or medication; 
  • The willful disobedience of the worker to an order if the rule is expressly given or expressly framed, for the aim of securing the protection of workers.
  • The wilful elimination or disregard by the worker of any security guard or different gadget which has been supplied for the aim of securing the protection of workers.

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Doctrine of Added Peril

When an worker performs one thing which isn’t required in his responsibility and which includes further hazard, the employer can’t be held liable to pay compensation for the accidents prompted. The doctrine of added peril disentitles an injured employee from compensation on the bottom that he had taken a larger threat than he had been required by his employer to imagine. Due to this fact, the place the harm will not be prompted to workman by an accident arising out of employment, he/she will not be entitled to get any profit or compensation.

Doctrine of added peril can be utilized as a defence by the employer for pleading non-liability for the compensation.[6] In Lancashire and Yorkshire Railway Co. v. Highley[7] the courtroom laid down the doctrine of added peril as an exception to the crucial of harm arising out of employment.

Self-inflicted Harm

If an employee inflicts harm to himself or herself it’s self-inflicted harm. The harm could also be intentional or unintended however the employer will not be chargeable for such accidents. There are some sorts of jobs which have a excessive threat for self-inflicted accidents which embody regulation enforcement, medical workers, farmers, academics, salespersons.

Contributory negligence

Workers owe an obligation to their employers to hold out their work with affordable care in order to keep away from accidents and harm. Employers are vicariously chargeable for the negligence of their workers however are entitled to assert a contribution or indemnity from their negligent worker in applicable circumstances. So, if there may be negligence on the a part of each worker and the employer then the employer will likely be liable to pay compensation to the extent of his personal negligence, not of the worker. Therefore, the compensation quantity might cut back because the employer won’t be chargeable for the negligence of the worker.


Worker’s Compensation Act, 1923 is nearly a century previous enactment, offering social safety to workmen. Social safety affords to make sure compensation is paid to a disabled or injured particular person provided that the accident rose in the course of the employment. The compensation paid to a workman by an employer when an accident happens is a reduction and social safety measure supplied by the Act.

The Act makes it clear that employers ought to have duties and obligations that embody the welfare of employees after an injury resulting from employment, in the identical manner they’ve reserved the right to make income. The Act aims to see workmen have a sustainable life after an employment-related accident.

Nevertheless, a more in-depth research of the Act reveals that its advantages usually are not only confined to employees or workmen. This Act has quite a few advantages for each – employers and workers. It retains up motivation and loyalty of employees in the direction of the corporate, and thereby reduces worker turnover. One other benefit of this laws is that it will increase the importance of enough security gadgets for the employer, therefore, reduces the number of accidents in a way that isn’t more likely to be achieved by mere official inspection.

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