Background:
The Employee’s Compensation Act, 1923, earlier known as the Workmen’s Compensation Act, was enacted to provide financial protection to employees and their families in the event of injury, disablement, or death arising out of and during the course of employment. The Act makes it the responsibility of the employer to pay compensation to workers or their dependents for work-related accidents and occupational diseases. In Delhi, as in the rest of India, this law ensures that employees engaged in various types of employment are safeguarded against the economic hardship caused by workplace injuries. The Act also prescribes procedures for determining compensation, resolving disputes, and registering agreements, thereby creating a structured framework for employee welfare and social security.
Applicability:
The Employee’s Compensation Act, 1923 is applicable to all the employer which 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.
This Act covers the employee who is
Compliance Requirement under Rules In Accordance with the Sections:
If a personal injury is caused to an employee by accident arising out of and in the course of his employment, the employer shall be liable to pay compensation in accordance with the Act. However, the employer is not liable in cases where the injury does not result in total or partial disablement for more than three days, or does not lead to death or permanent total disablement and is caused due to the employee being under the influence of alcohol or drugs, willful disobedience of safety rules, or willful removal or disregard of safety devices.
Where death results from the injury, the compensation payable shall be an amount equal to fifty percent of the monthly wages of the deceased employee multiplied by the relevant factor, or an amount of ₹1,20,000, whichever is higher.
Where permanent total disablement occurs as a result of the injury, the employee is entitled to compensation amounting to sixty percent of monthly wages multiplied by the relevant factor, or ₹1,40,000, whichever is greater.
In the case of an injury specified in Part II of Schedule I, resulting in permanent partial disablement, the employee shall receive compensation calculated as the percentage of the amount that would have been payable in the case of permanent total disablement. The percentage is based on the loss of earning capacity specified for that injury.
If the permanent partial disablement results from an injury not listed in Schedule I, compensation shall be payable as a percentage of the amount that would have been payable in the case of permanent total disablement. This percentage is proportionate to the loss of earning capacity as assessed by a qualified medical practitioner.
For temporary disablement, whether total or partial, the compensation payable is a half-monthly payment equal to twenty-five percent of the employee’s monthly wages. This payment is made on the sixteenth day from the date of disablement if it lasts for twenty-eight days or more, or after a three-day waiting period if the disablement lasts less than twenty-eight days. Payments continue half-monthly during the disablement period or for a maximum of five years, whichever is shorter.
Employees are entitled to reimbursement of the actual medical expenses incurred for the treatment of injuries sustained during the course of employment.
Where an employer disputes liability for compensation, they are required to make a provisional payment of the admitted liability. Such payment must be deposited with the Commissioner or made to the employee without prejudice to the employee’s right to claim further compensation.
An employer depositing compensation in respect of an employee whose injury has resulted in death must furnish a statement in Form A and will receive a receipt in Form B.
Where compensation is paid to a woman or a person under legal disability for a non-fatal accident, the employer is required to submit a statement in Form AA and will be issued a receipt in Form B.
In cases where a non-fatal accident involves an employee other than a woman or a person under legal disability, the employer must submit a statement in Form D to the Commissioner and will receive a receipt in Form E.
In the event of an accident resulting in death or serious bodily injury, the employer or person responsible must notify the Commissioner within seven days by submitting a report in Form EE. Serious bodily injury refers to permanent loss or injury to limbs, sight, or hearing, a fracture of any limb, or enforced absence from work for more than twenty days.
An employee receiving half-monthly compensation shall not be required to undergo medical examination more than twice in the first month after the accident or more than once in any subsequent month, except at the place of residence.
Every employer must, at the time of employment, inform the employee of his rights to compensation under this Act. This must be communicated in writing as well as through electronic means, in English, Hindi, or the official language of the region, as may be understood by the employee.
Where any lump sum compensation is settled by agreement, either by redemption of a half-monthly payment or otherwise, or where compensation is settled for a woman or a person under legal disability, the employer must submit a memorandum of the agreement in duplicate to the Commissioner. The memorandum must conform as closely as possible to Form K, L, or M, depending on the case.
Punishment and Penalties
Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, Commissioner may direct to pay with arrears, interest @ 12% p.a. or such higher rate on amount due and where there is no justification for 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. The interest and the penalty shall be paid to the employee or his dependant, as the case may be.
Whoever 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.
Whoever fails to make a return which he is required to make under section 16 shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to one lakh rupees.
Whoever fails to send a report which he is required to sent under section 10B shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to one lakh rupees.
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