The employees Compensation Act 1923

THE EMPLOYEES' COMPENSATION ACT, 1923

Q 1. Define the following terms as understood in the Workmen's Compensation Act, 1923

(1) Dependant

(2) Employer

(3) Partial disablement

(4) Total disablement

(5) Employee

(6) Occupational Diseases

Ans. (1) Dependant.-Dependant means any of the following relatives of a deceased employee, namely,

(a) A widow (Ravuri Kulayya v. D. Nagawardhanamma, AIR 1962 A.P. 42) , a minor legitimate or adopted son, an married legitimate or adopted daughter, or a widowed mother; A child in the womb of the mother at the time of death is deemed his dependant. After birth he may claim compensation. But if the claim is made after 29 year, i.e., later on being major, it is not acceptable. [Project Officer, Giddi Hazaribagh v. Sanjay Prasad Chaurasia and others, (2005) LLJ 891(Jharkhand)]. Madras High Court has held the widowed sister of the deceased is entitled to get compensation, if she was wholly dependent on his earnings. [National Insurance Company, Madras v. Sriniwash Goods Transport, (2003) LLJ 254 Mad].

(b) a son or daughter, if wholly dependent on the earnings of the employee at the time of his death, who has attained the age of 18 years and is infirm;

(1) a widower,

(ii) a parent other than the widowed mother,

(iii) a minor illegitimate son, an unmarried illegitimate daughter, or a daughter legitimate or illegitimate or adopted if married and minor or if widowed and minor,

(iv) a widowed daughter-in-law,

(v) a minor brother or unmarried sister or a widowed sister or a minor.

(vi) a minor child of a predeceased son.

(vi) a minor child of a predeceased daughter where no parent of the child is alive, or

(viii) a paternal grandparent if the parent of the workman is not alive.

The burden of proving the age of the employee lies on the prosecutor/employer if he fails to prove the age revision may be accepted. (Ram Chandra v. State of U.P., 2002 LLJ 907 (AIL.))

Dependants of one class can claim compensation simultaneously. Dependants shall prove their dependency-Manias Gonder v. Ranga Swami, 1953 Mad. 766. The burden of proof lies on the claimant of compensation. The occurrence of the accident must be proved by the claimant. There is no presumption that the accident has occurred. [AIR 2009 S.C. 2019). Casual connection between death of employee, his employment has to be established.

The responsibility of the legal representative of the dead employer to pay compensation is limited only to his estate. The liability is not absolute. Waiver of compensation under agreement is void. In Smt. Nanak Chand Shadi Ram v. Mahabir, AIR 1935 All. 408, it was held that compensation may be claimed by head of a joint family on behalf of family's widow or minors, likewise union may claim it provided it is authorized to do so.

(2) Employer.-Employer includes any body of person whether incorporated or not and any managing agent of the employer, and when the service of an employee is temporarily lent or let on hire to another person by the persons with whom the employee has entered into a contract of service or apprenticeship, means such other person while the workmans is working for him.

(3) Partial Disablement.-According to Section 2 (1) (g) of the employees' Compensation Act, partial disablement means, where disablement is of temporary nature, such disablement as reduces the earning capacity of an employee in any employment, in which he was engaged at the time of accident resulting in the disablement, and, where the disablement is of a permanent nature, such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time.

Provided that every injury specified in Part II of Schedule I, shall be deemed to result in permanent or partial disablement

The term 'disablement should be construed in limited sense. It is of a wide scope. It is not limited to the physical disability alone. it includes the fact of reducing the earning capacity also.

Disablement is of two types (1) permanent and (2) temporary. Both depends on the reduction of earning capacity. Allahabad High Court has made it clear in Raghuraj Singh v. Eastern Railway, (1967) LLJ 68 (All)..

that which matters should be taken into account by the Court while deciding the question of permanent partial disablement. The test is, whether the workman has been made disabled to accept the other employment for example, whether any person can work when two of his fingers are chopped off Loss of vision of one eye is enough.-Lipton (India) Ltd. v. GC Mandal. (1982) I LLJ 55.

(4) Total Disablement.-According to Section 2 (1) (1) of the Employees' Compensation Act, total disablement,' means such disablement, whether of temporary or permanent nature as incapacitates employee for all work which he was capable of performing at the time of accident resulting in such disablement.

Provided that the permanent total disablement shall be deemed to result from every injury specified in the Part I of the Schedule I or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the said Part II against those injuries amounts to one hundred, percent or more.

Total disablement may be of two kinds

(1) Temporary total disablement (2) Permanent total disablement. The employee may get relief from the temporary total disablement after sometime. It is for few days that the employee fall prey of such disablement. But the permanent total disablement incapacitates him fully, It reduces the total carning capacity. It was held in Pratap Narayan Singh v. Shri Mukesh and others, AIR 1976 S.C. 222, that if a carpenter suffered personal injury in the course of employment which resulted into amputation of his left hand above elbow, it will be deemed total disablement since the carpenter could not work with one hand. See Jayaraj v. T.P. Transport Co Ltd. where loss of hearing capacity of bus conductor was held total disablement.

The employer shall be liable for the reimbursement of actual medical expenditure for treatment of injuries caused during the course of employment.

(5) Employee-Employee' means a person, who is

(i) a railway servant as defined in clause (34) of Section 2 of the Indian Railways Act, 1989 (24 of 1989), 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; or

(ii) (a) a master, seaman or other member of the crew of a ship,

(b) a captain or other member of the crew of an aircraft,

(d) a person recruited for work abroad by a company and who is employed outside India in any such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as the case may be, is registered in India; or

(iii) employed in any such capacity, as is specified in Schedule II whether the contract of employment was made before or after the passing of this Act or whether such contract is expressed or implied, oral or in writing, but does not include any person working in the capacity of a member of the Armed Forces of the Union, and any reference to a workman who has been injured shall, where the workman is dead, include a reference to his dependants or any of them.

(6) Occupational Diseases.-The Act has not defined the term "occupational disease". It says about it in sub-section (2) of Section 3. Herein, it is made clear that the liability of the employer is limited to those diseases which are enumerated in Schedule III. Which provides a list of occupational diseases, and classifies them in three parts

Part I.-In the first part, the diseases like anthrax. have been enumerated, which are due to wool, or animals, or any disease caused by process of low air pressure.

Part II.-In this part mentions the diseases caused by glaze, Phosphorus, benzine radium, etc. Part III.-It includes cilicosis, Bigosis, etc.

Part III- It includes cilicosis, Bigosis, etc.

Q. 2(a). The employer is liable to pay compensation in cases where injury arises out of and during the course of employment under the Workmen's Compensation Act, 1923.

Accident also does not entitle a workman to claim compensation, accident must arise out of and in the course of employment. Discuss ?

Ans. Arising out of and in the course of employment.-In order to get compensation for the damage caused by the accident of the employee, it is necessary that such accident might have arisen out of and in the course of employment. The term 'out of employment' in Section 3 indicates the intention of finding out the cause or inquiring into the cause of su accident. In the same way, the term 'in the course of employment' denote the place and time of the accident. These two terms play an important rol in the fixing of the amount of compensation, because the burden lies on the employee or dependant of the deceased that the accident arose out of and the course of employment. It is necessary to establish a direct relation between the damage caused by the accident and the employment of the employee.

Arising out of employment' does not mean that the basis of the individual damage, is not barely the nature of employment. As a matter of fact, the damage caused in the course of the employment, is a result of tha risk which is incidental to the nature of the employment. The damage or injury might have not been there, had the employee, not participated in the performance of his duties related to his employment. To conclude, the relation of cause and effect should be established between the accident and the employment. See Bhagubai v. G.M.C. Rly. Bombay, AIR 1955 Bom 105.

R. B. Mundala v. Bhanwari, AIR 1970 Raj 11. A man was appointed as truck driver in a company. The truck carried petrol. The driver informed that the wagon is leaking. The employer asked the driver to check the leakage by entering into the wagon which was empty. The driver burnt match stick to search the place of leakage which caused fire, and as a result of it, the driver was burnt and died. The Court held that the accident arose out of and in the course of employment.

In Chairman Madras Fort v. Kamala, AIR 1970 Mad 386, it was held that the accident will be treated to have been arisen out of and in the course of employment, while the accident took place during the period for going to lunch or refreshment and the employee was entitled to get compensation.

In South Railway v. Kananbal, (1995) I LLJ 231, it was held that the death of the point-man will be deemed to have arisen out of and in the course of employment as the death was caused due to the fatal attack on him by some unknown persons.

The main distinction between the two terms "out of employment" and "in the course of employment" is, the former term indicates there must be a relation between the employment and accident which took place, and resulted into the injury to the employee. The latter term denotes place and the time, that is to say, the accident must have taken place during the performance of the employer's work by the employee.

Q. 2 (b). State the cases in which employer shall not be liable to pay compensation under Employees' Compensation Act, 1923.

"The amount of compensation is payable to employee according to nature of injury". Discuss.

What are the features which attract employer's liability to pay compensation under the Employees' Compensation Act, 1923. Refer to some decided cases.

Discuss with the help of decided cases, the extent of the liability of the employer to compensate the employee under the Workmen's Compensation Act, 1923.

State the circumstances in which an employer is liable to pay compensation to an employee under the Workmen's Compensation

Act, 1923. Ans. Employer's Liability for Compensation.-Section 3 of the Act provides the liability to pay compensation. This section limits the ability and makes it clear that the liability is within the provisions of the Act. The liability of the employer shall be subject to the following conditions.

(1) Personal injury caused to the employee,

(2) The injury is the result of an accident

(3) The accident took place out of and in the course of employment.

(4) Consequence of injury.-(a) By way of death of the employee, b) Incapacitates the employee and he is disabled thereby partially or totally for more than 3 days. The main aim of the Act is to provide compensation to such class of employees who meet accidents and are injured and the injury results into death or disablement permanent or partial. The following things and facts should be proved in a very clear manner in order to make the employer liable.

(1) The accident took place in the establishment of the employer, or in any other premises related to that.

(2) The accident took place during the course of the employment.

(3) The accident occurred out of the employment.

(4) The employee received injury due to that accident

(5) The accident has resulted into disability of the employee, whether

partial, or total, temporary or permanent.

(6)There was no contributory negligence of employee in happening of the accident concerned.

The employer has to pay one lakh twenty thousand rupees for death (enhanced from eighty thousand) and one lakh forty thousand rupees for permanent disablement. The Central Government is empowered to enhance the rate of amount of compensation from time to time. The Amendment Act No. 45 of 2009 has enhanced the funeral expenses from two thousand rupees to five thousand rupees. The Central Government may enhance it from time to time.

When employer not liable.-The employer shall not be liable pay compensation to the employee in the following circumstances:

(1) when the injury does not subsist for more than 3 days caused such partial or total disablement.

(2) the employer may plead not liable and guilty except in the case death and permanent disability. He may take the following defences

(1) the employee was under intoxication of wine or any other medicine

(ii) the employee has violated such rules which are made for the safe of the employees', and this was done deliberately. (iii) The employee did not use such device or safety instrument although he was in know of the fact that such instrument was made, provided and kept for the very purpose of safety. The burden lies on the employer when he pleads for exoneration from liability that he was no way responsible for the injury or accident. It was the contributory negligence on the part of the employee.

Employer's liability regarding occupational disease. Sub section 2 of Section 3 further provides that where the employee, who ha been employed in one employment, contract with a disease, which mentioned as a prescribed disease in Schedule III,

(1) Contracting of such disease shall be deemed as an injury.

(2) Such injury shall be deemed to have arisen out of and in the course of employment.

Following provisions are made in this respect :

(i) The employee concerned has been under the employment of the employer for not less than a period of 6 months.

(ii) The continuous period of such employment has passed in the employment, in which the disease contracted, is a prescribed occupational disease in Schedule III.

(iii) The employee has been in service for a period specified by the Central Government continuously. Thus if the above conditions are satisfied, the contracting of such disease shall be deemed to be an injury by accident within the meaning of Section 3.

No provision has been made so far regarding the disease in Part A of the Schedule concerned.

It may be noted that Central Government may, by notification in the official Gazette from time to time, enhance the amount of compensation payable to the deceased or his dependants.

Gudelines for determination of Compensation.-In absence d codified law for arriving at quantum of compensation by constitutional Courts, guidelines contained in Act can be applied for arriving at just compensation [Director-General, RPF New Delhi v. Mst. Sara, AIR 2016J.&K.143]

Q. 3. Explain the theory of notional extension of employer premises, under the Employees' Compensation Act, 1923

What is the meaning of expression "notional extension employer's premises.

Explain the theory of notional extension of the employer premises.

Ans. Theory of notional extension.-The general rule of t employment is that the employment of the employee commences from the time he reaches the place of work, where he has to do his duty, when leaves the place of work, then he is not said to be in employment. That to say, the time taken in reaching the place of work, from home, and returning home from the place of work is not included in the time of employment. Both are excluded. Can the employee demand compensation for the accident taking place during such period? In order to answer this question, this principle has been propounded, extended and applied.

The object of the Notional Extension Theory, is to extend the notion of the employer's premises. This is with a view bring the injury into that injury which is caused during the period of employees' reaching the place of work from his residence and returning home from the place of work. Time taken to and fro counts very much in deciding the nature and result of the accident. The employer is held liable to pay compensation under Section] of the Act. But the employer will be liable only when such injury is caused due to an accident arising out of and in the course of employment.

In the case of St. Helens Colliery Company v. Hewistone, 1924 A.C 59, there was an agreement between the company and the railway for carrying the employees and as a result of such an agreement, they were given pass at concessional rate. One day an employee died while trying to catch the train. A claim for compensation was presented by his dependant. The Court rejected it on the ground that the accident (death), did not occur during the period of employment as the employees were not bound to travel by the train also. That was not the only means of coming and going since there was an option open for coming and going, hence no compulsion to travel by train and train only. In Weaver v. Tredger Ice and Coal Company the facts were some of the employees were trying to catch the train at a nearby railway station, one of them was injured. The Court held that the employee was entitled to compensation, as there was no other means for coming and going except the railway. So, it shall be deemed to form the part of employment. There was no alternative means of transportation except railway.

Lord Summer's first test.-According to him, it is necessary for the liability of the employer that the employee concerned was employee or not at the time of occurrence of the accident. If the accident took place outside the place of work, the question for decision is whether it was in the course of his employment. In his own words

"Was it a part of the injured person's employment to suffer or to do which caused injuries, if yes, accident arose out of his employment, otherwise not."

For instance, a boy employed in a canteen crosses the road to give tea in the company, while returning after giving tea, he meets injury due to police firing or a lorry. Then the question for decision is, whether this will be treated as an accident out of course of the employment. Some of the judicial decisions, make it very clear that, we can reach on some certain conclusion only by extensively analyzing the facts and the surrounding circumstances. Here in this case the compensation was allowed by applying the notional extension theory.

In Saurastra Salt Manufacturing Company v. Bail Belu Raja, AIR 1958 S.C. 88, the judgment delivered by the Supreme Court guides in understanding clearly the aforesaid principle. The facts of the case were like this-There were two ways to reach the place of making salt, i.e. Porbunder, one by boat and another zig-zag way on foot. One evening the employees after finishing their work of the day, while returning sat in a boat. The boat sank due to excessive load and tempest. Compensation was demanded for 7 of them. The Compensation Commissioner and High Court of Saurastra, issued order for the payment of compensation for the accident on June 12, 1952. They based their decision on the fact that accident was in the course of the employment. The Supreme Court in appeal, reversed the order, and propounded an important principle of liability. According to this decision, the employment of an employee does not commence till he reaches the place of work, the time in coming to and fro from the place of work is excluded.

Works Manager, Carriage, Wagon shop v. Mahabir, AIR 1954 All 132, is another case on the point. In this case Mahabir, used to go to and fro from Mallhaur to Lucknow Jn. Station. He did not use the overbridge for this purpose, but used to come and go by crossing the railway lines from Alambagh workshop, one day while he was returning from work at 3.30 in the morning, and crossing the railway line, his leg was chopped off by shunting engine. The Court held that he was entitled to compensation, and ruled that accident took place out of and in the course of employment

In Manager, B.E.S.T., Bombay v. Smt. Agnish AIR 1964 S.C. 193,the husband of the plaintiff was driver in B.E.S.T. After his shift work, he lept the bus in the Depot, and used to return by another B.E.S.T. bus. He was free to do so. One day while returning home, he met an acciden resulting into his death. The Court held that the accident arose out of and the course of employment, and hence the widow of the deceased was entitled to get compensation.

According to the judgment delivered by the Supreme Court in Prate Narayan Singh v. Shri Niwash Sabata and others, AIR 1976 S.C. 222, the moment the employee receives injury, the liability of the employer commences. Employer's liability is not limited only to his establishment His liability is extended beyond the premises. The liability does not arise only for the accident taking place on the place of work or establishment The employer cannot take this plea in his defence that the accident has taken place beyond the place of his employment. This plea will not exonerate him from liability. No employee or his dependant shall be deemed entitled to compensation, unless and until he, brings out all the essential facts and matters into the light. The burden of proof lies on the claimant of the compensation.

The following are the two tests, in the conditions mentioned below.

(i) Whether the accident happened at the place of employment.

(ii) Was it out of and in the course of employment. The true implication of the aforesaid two tests become apparent on analyzing them properly. The following things have got to be proved to establish the liability of the employer.

(a) The accident happened in the establishment or its premises.

(b) Accident took place out of employees' employment.

(d) The employee has fallen prey to that accident.

(e) The accident has resulted into the disability of the employee.

(f) There was no contributory negligence on the part of the employee in happening of the accident.

What is an accident? It is not defined. But it means such accident which is beyond the control of the employer, that is to say, such circumstances which are beyond the power and control of the employer. This term is explained in Janaki Ammal v. Divisional Engineer Highways Kozhikode (1956) 2 MLJ 19. like this "if an occurrence is unexpected and without design on the part of the employee, it is an accident."

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