Compensation under Workmen’s Compensation Act, 1923

The Workmen’s Compensation Act, 1923 was enacted with the objective to enhance the work force and its mechanism by providing financial protection against injury suffered workmen during the course of employment. It came into force from the date of 1st July, 1924. Read along to know more about the provisions, case laws and further suggestions for improvements regarding the same.

The Workmen’s Compensation Act, 1923 was enacted with the objective to enhance the workforce and its mechanism by providing financial protection against injury suffered workmen during the course of employment. It came into force from the date of 1st July 1924. Furthermore, the mentioned enactment has the provision of paying compensation, if some occupational diseases contracted by employees during the course of their employment.

This compensation is provided by employer to their [Employees][1] for injury that takes place by the way of accident. The injury could be of nature of occupational disease or industrial accident. Meanwhile an Employer means person who employs employee for a task by the force of contract of service or apprenticeship; it is irrespective of whether the employer is incorporated or not.[2]It is the liability of employer to pay the compensation.[3]On the other edge, after the amendment of 2009, the legal word ‘workmen’ was replaced with ‘employee’ and subsequently, the definition was broadened.[4]The employer is even burdened with the responsibility to maintain a regular updated record of the employees, in the absence of such penalty can be imposed.[5]

‘Injury’ could be ascertained in 5 different heads as:-

  1. Death: Death of the workman.
  2. Permanent Total Disablement: disability in which the employee is restricted from performing any kind of work. Stoppage of Full working ability.
  3. Permanent Partial Disablement:disability in which the employee is not able to perform at full physical capacity level. Working but not with optimal level.
  4. Temporary Disablement:Disability which is temporary in nature and such ability could be recovered with the span of time.
  5. Contracted Occupational Disease: Any Disease occur which was mentioned in the agreed terms. Schedule III, Part C provides for disease(s) specified therein as an occupational disease.

However, there are certain numbers of injuries which are not covered under the ambit as:

  1. Injury occurred due to uncontrollable events.
  2. Injury occurred where the employee chosen method other than prescribed one.
  3. Injury occurred when the employee was on alcohol or drugs.
Also Read  Animal Protection Laws: Standing For Their Rights

Compensation Amount[6]

In case of Death, compensation amount will be equal to 50% of the monthly wages of the deceased employee multiplied by the relevant factor; or an amount of Rs. 1,20,000; whichever is more.[7]

 In case of Permanent Total Disablement, compensation amount will be equal to 60% of the monthly wages of the injured employee multiplied by the relevant factor; or an amount of Rs. 1,20,000; whichever is more.[8]

In case of Permanent Partial Disablement, compensation amount will beis proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner[9]).[10]

In case of Temporary Disablement, whether partial or total, compensation amount will be equal to a half monthly payment of the sum equivalent to 25% of monthly wages of the employee.[11]

The compensation shall be paid as soon as it falls due; otherwise an amount as in form of penalty could be taken by the employer. However, a power had been reserved with the Central Government to enhance the amount of compensation from time to time.

Even in case of insolvency of the employer or winding up of the companies, the compensation amount shall be channelized toemployee, and upon any such transfer the insurers shall have the same rights and remedies and be subject to the same liabilities as if they were the employer.However, the insurers shall not be under any greater liability to the employee than they would have been under the employer.[12]

Furthermore, the jurisdictional authorities are provided for reference[13] and appointment[14] of commissioner, wherein an application[15] has to be made with decided venue of proceeding and transfer[16]. The power of the commissioner is provided under section 23 of the Workmen Compensation Act, 1923 and the matter shall be disposed of by him within three months from the date of reference.[17]Consequently, the aggrieved party may approach to High Court as in form of appeal against the order(s) of the Commissioner.[18]

Also read The Persisting Struggle of Bonded Labourers


[1] Inserted by Workman’s Compensation (Amendment Act), 2009. (Act No. 45 of 2009)

Also Read  How are executive powers of the President different from his Constitutional powers?

[2] Section 2(1)(e) of The Workmen’s Compensation Act, 1923.

[3] Section 3 of The Workmen’s Compensation Act, 1923.

[4] Section 2(1)(dd) of The Workmen’s Compensation Act, 1923.

[5] Section 18A of The Workmen’s Compensation Act, 1923.

[6] Section 4 of The Workmen’s Compensation Act, 1923.(As Amended by Amendment Act No. 45 of 2009)

[7] Section 4(a) of The Workmen’s Compensation Act, 1923.

[8] Section 4(b) of The Workmen’s Compensation Act, 1923.

[9] Section 11 of The Workmen’s Compensation Act, 1923.

[10] Section 4(c) of The Workmen’s Compensation Act, 1923.

[11]Section 4(d) of The Workmen’s Compensation Act, 1923.

[12] Section 14 of  The Workmen’s Compensation Act, 1923.

[13] Section 19 of The Workmen’s Compensation Act, 1923.

[14] Section 20 of The Workmen’s Compensation Act, 1923.

[15] Section 22 of The Workmen’s Compensation Act, 1923.

[16] Section 21 of The Workmen’s Compensation Act, 1923.

[17] Section 25-A of The Workmen’s Compensation Act, 1923.

[18] Section 30 of The Workmen’s Compensation Act, 1923.