1. Introduction

The Employees’ Compensation Act, 1923 was enacted to provide financial compensation to employees or their dependents in case of injury, disability, or death arising out of and in the course of employment.

The Act holds employers liable for work-related accidents and occupational diseases.

________________________________________

2. Objectives of the Act

• Provide financial relief to employees injured at work

• Compensate dependents in case of employee’s death

• Ensure social security for workers in hazardous occupations

• Encourage employers to maintain safe working conditions

________________________________________

3. Applicability

• Applies to establishments employing persons listed in Schedule II

• Covers factories, mines, plantations, construction, transport, and other hazardous employments

• Applicable across India

📌 Employees covered under ESI Act are generally excluded from this Act.

________________________________________

4. Who is an Employee?

An employee is a person employed in:

• Factories, mines, plantations

• Construction work

• Transport services

• Hazardous occupations listed in Schedule II

Includes permanent, temporary, and contractual workers.

________________________________________

5. Employer’s Liability

Employer is liable to pay compensation when:

• Injury is caused by accident arising out of and in the course of employment

• Injury results in:

o Death

o Permanent total disablement

o Permanent partial disablement

o Temporary disablement

________________________________________

6. Situations Where Employer Is NOT Liable

• Injury does not result in disablement for more than 3 days

• Injury caused due to:

o Employee’s intoxication

o Wilful disobedience of safety rules

o Wilful removal of safety devices

________________________________________

7. Types of Disablement

a) Temporary Disablement

• Temporary loss of earning capacity

• May be total or partial

b) Permanent Total Disablement

• Complete loss of earning capacity (e.g., loss of both eyes)

c) Permanent Partial Disablement

• Partial loss of earning capacity (e.g., loss of one finger)

________________________________________

8. Amount of Compensation

a) Death

• 50% of monthly wages × Relevant factor

• Or minimum ₹1,20,000, whichever is higher

b) Permanent Total Disablement

• 60% of monthly wages × Relevant factor

• Or minimum ₹1,40,000, whichever is higher

c) Permanent Partial Disablement

• Percentage of compensation based on loss of earning capacity

d) Temporary Disablement

• Half-monthly payment of 25% of monthly wages

Relevant factor is based on employee’s age (Schedule IV).

________________________________________

9. Occupational Diseases

Certain diseases contracted due to employment are treated as employment injuries, such as:

• Silicosis

• Asbestosis

• Lead poisoning

Listed in Schedule III.

________________________________________

10. Notice & Claim

• Employee must give notice of accident as soon as practicable

• Compensation claim to be filed before the Commissioner for Employees’ Compensation

________________________________________

11. Time Limit for Compensation

• Compensation must be paid as soon as it becomes due

• Delay attracts:

o Interest @ 12% per annum

o Penalty up to 50% of compensation

________________________________________

12. Commissioner for Employees’ Compensation

• Appointed by the government

• Has powers to:

o Decide compensation claims

o Settle disputes

o Order payment of compensation

________________________________________

13. Role of HR Under the Employees’ Compensation Act

• Ensure accident reporting

• Maintain accident records

• Assist employees/dependents in claims

• Ensure timely payment of compensation

• Coordinate with insurers and authorities

________________________________________

14. Penalties

• Failure to maintain records or submit returns

• Delay or non-payment of compensation

• Monetary penalties and legal action

HR Labour Law - Employees’ Compensation Act, 1923

Tags

Share This Post

Call Us 24/7

Work with us

Our Location