Evolution & Basics of Workmen Compensation Act
Introduction:
The Workmen Compensation Act of 1923, was enacted during British rule in India when the number of workplace accidents and injuries along with industrialization was on a rise with the introduction of capitalism in the 19th century under colonial dispensation. Before the Act, there was no comprehensive law to compensate workers for injuries suffered during the course of employment.[1] Since then there have been several amendments and implementation activities carried on to protect the interest of workers but it hasn’t been a success on a large level.
“The journey of industrial capitalism i.e. workers exploitation charted by the British began in India with the introduction of railways in 1853 (laying 20 miles of railroad from Mumbai).”[2]
The main factors that led to the emergence of unification of workers leading to workers protest include:
- Rising prices of essential commodities.
- Decline in the real wages of workers.
- Increase in the demand for the industrial products resulting in the expansion of Indian industries.
- Gandhi's call for the Non-Cooperation Movement.
- International Factors like the Russian Revolution.[3]
Now, to ensure proper enforcement of this facility, several laws like the 1884 Compensation Act and the Fatal Act of 1885 were implemented.[4]
Workmen Compensation Act:
Enacted nearly a century ago, this legislation remains a cornerstone in defining the rights of workers and the responsibilities of employers across industries. It was designed to provide a safety net for employees injured in the course of their employment, the Act reflects a pivotal moment in history when societal attitudes towards worker welfare began to shift towards protection and compensation. The Workmen' Compensation Act introduced in 1923 to provide a uniform system for compensating workers for injuries arising out of and in the course of employment i.e. it is not merely a legal framework; but it represents a significant stride towards ensuring fairness and equity in the workplace.[5] By establishing a system where injured workers could claim compensation without having to prove fault, the Act aimed to alleviate the financial burden on workers and their families during times of injury or loss caused by occupational hazards.
Therefore, the understanding of the provisions of the act of 1923 is essential for employers and employees alike. For workers, it means knowing their rights to compensation in case of injury or death arising from work-related incidents. For employers, compliance with the Act involves fulfilling statutory obligations to ensure a safe working environment and providing timely compensation when accidents occur.
Objectives of the Act:
The Workmen's Compensation Act, passed in 1923, safeguards the interests of employees and their families by establishing a structure for compensation in the event of work-related accidents or injuries.[6] For e.g. Let’s say that there is a construction company and an incident happens on the place of the work. While working the worker gets injured, then he has a right to get compensation and be safeguarded against the loss suffered by such accident. The main goals of the Workmen's Compensation Act are:
1. Financial Protection for Workers:
The Act's primary and the foremost aim is to guarantee that workers receive financial assistance, safety and security in the event of accidents, illnesses, or even fatalities at work i.e. to establish a safe place and working conditions for the workers. For e.g.: If a person is working in a pharmaceutical company than he has a right to get safe working environment and it’s the company’s responsibility to keep him safe from hazardous working chemicals etc by providing safety gears etc. and in case of injury by accident provide with the financial compensation. By offering compensation, it helps injured workers and their families manage the financial difficulties brought on by lost income and rising medical costs.[7]
2. No-Fault Compensation:
One of the key objectives is to establish a no-fault compensation system i.e. the provision of the compensation with absolute liability or strict liability. This means that employees do not have to show that their employer was at fault or negligent to get compensation under the Act. Workers are entitled to compensation if the illness or injury is related to their employment.[8]
3. Supporting Safety Measures:
As employers are held responsible for compensating employees who sustain injuries during the course of their employment it creates an additional sense of responsibility of the corporate. This financial liability creates a direct incentive for employers to prioritize and invest in safety measures within the workplace. By this liability of bearing the financial costs associated with workplace injuries, employers are motivated to implement stringent safety protocols, provide necessary safety equipment, and establish comprehensive training programs aimed at reducing the risk of accidents. This is because the safety usually involves less cost than that of the injury; therefore, they try to ensure the maximum safety possible. Hence also upholding the principles of corporate accountability and ethical governance which [9]otherwise are sometimes neglected. The act thereby acts as a catalyst for fostering a safer working environment. Employers recognize that preventing injuries not only benefits the employees by reducing suffering and loss but also mitigates financial losses and potential legal liabilities. This dual impact of protecting both the physical well-being of employees and the economic interests of employers underscores the proactive approach encouraged by the legislation
4. Prompt and Equitable pay:
The act also establishes a channel and tribunal whereby it ensures that pay is given out swiftly and fairly. The act by establishing such a framework ensures that the workers and their families get the adequate assistance that they require in the event of an accident. The Employees Compensation Act 1923 provides for a methodical procedure of determining and allocating compensation.[10]
5. Lessening the demand on Welfare Systems:
Firstly, by placing the responsibility for compensating injured workers squarely on employers, the Act shifts a significant portion of the financial burden away from public health and social welfare services. In traditional settings without such legislation, injured workers might otherwise rely on public healthcare systems or welfare benefits to cover medical expenses, rehabilitation costs, and lost wages. This can strain public resources and taxpayer funds, especially if the number of workplace injuries is high. For example, imagine a manufacturing company that operates without stringent safety regulations or compensation laws. In this scenario, if a worker suffers a serious injury due to unsafe working conditions, they might face significant medical bills and loss of income. Without compensation from the employer, the injured worker might turn to public healthcare services or welfare programs for financial assistance. This places a burden on public resources that could otherwise be avoided if the employer had been held accountable for providing a safe working environment and compensating the injured worker.[11]
6. Promoting Social Justice:
The Act establishes a fundamental right for workers to receive compensation for injuries sustained while performing their job duties. This principle acknowledges the inherent risks associated with many occupations and ensures that workers are not left financially vulnerable due to circumstances beyond their control. By guaranteeing compensation, the Act helps maintain a level playing field where workers can feel secure in their employment without the fear of economic ruin from workplace accidents.
For example, consider a construction worker who sustains a serious injury due to a scaffolding collapse. Under the Employees Compensation Act, this worker would be entitled to receive compensation for medical expenses, rehabilitation costs, and potentially lost wages while recovering. This financial support not only alleviates immediate financial stress for the worker and their family but also fosters a sense of justice and fairness in the workplace relationship.[12]
Definition and Scope
- Workmen under the act: All employees working full-time, part-time, temporarily or casually are liable to receive financial protection under this law. It comes into effect in case they secure injuries, incapacity, and disfigurement or die while performing their duties.
- Compensation under the act: The Act mandates payment of compensation by employers to employees for injury, disablement, or death arising out of and in the course of employment. So, we need to know what is compensation under the act? According to Section 4 of the Workmen's Compensation Act 1923, the amount of compensation workers is liable to receive is according to the injury and several another consideration. For example, in case of temporary disabilities, the Workmen's Compensation Act 1923 provides financial compensation of up to 25% of the concerned employee’s monthly wages. Another example could be in an unfortunate event when an employee suffers from permanent disablement, that individual has the right to receive 60% of his/her monthly wage or Rs.1,20,000, whichever is higher. [13]
- Coverage: The coverage provided by the Employees Compensation Act of 1923 is comprehensive, encompassing a wide range of injuries and occupational diseases that workers may suffer as a result of their employment. This aspect of the Act ensures that workers are adequately protected and compensated for various types of work-related harm.[14]
- Work-Related Injuries: The Act covers injuries that occur during the course of employment. These injuries can range from physical injuries such as fractures, burns, or amputations caused by accidents at the workplace, to injuries sustained during work-related travel or while performing job-related tasks.
Example: A construction worker falls from scaffolding and breaks several bones. The injuries sustained in this accident would be covered under the Employees Compensation Act, entitling the worker to compensation for medical expenses, temporary or permanent disability benefits, and rehabilitation costs.
- Occupational Diseases: Beyond immediate physical injuries, the Act also recognizes and covers occupational diseases. These are illnesses that develop over time due to exposure to specific hazards or conditions present in the workplace. Examples include respiratory diseases from exposure to hazardous chemicals, repetitive strain injuries from continuous manual labor, or psychological disorders resulting from workplace stress.
Example: A factory worker develops occupational asthma after prolonged exposure to airborne chemicals used in the manufacturing process. The Employees Compensation Act would provide coverage for medical treatment related to the asthma, as well as compensation for any loss of earning capacity if the worker's ability to work is affected.
- Compensation Based on Injury Severity: The Act specifies the amount of compensation based on the nature and severity of the injury or disease. Compensation may include:
- Medical Expenses: Coverage for medical treatment, hospitalization, and rehabilitation services necessary for the injured worker's recovery.
- Disability Benefits: Compensation for temporary or permanent disability resulting from the injury or disease. The amount of disability benefits is typically calculated based on the extent of the disability and its impact on the worker's earning capacity.
- Death Benefits: In case of fatal injuries, the Act provides for compensation to the dependents of the deceased worker, including a lump sum payment and monthly allowances.
Example: If a worker loses a limb in an industrial accident, the Employees Compensation Act would provide compensation for the specific loss suffered (such as a percentage of the worker's salary for a specified period), along with additional allowances if the injury results in permanent disability.
- Employer's Liability: Employers are held liable for providing compensation regardless of fault, as long as the injury occurred in the course of employment. The Act establishes procedures for claiming compensation. It provides for compensation by employer of any establishment covered under this Act, in case of:[15]
- Who has suffered an accident arising out of and in the course of his employment, resulting into:
- death,
- permanent total disablement,
- permanent partial disablement, or
- temporary disablement whether total or partial, or
- Who has contracted an occupational disease.
- ↑ #_ftn2" name="_ftnref2" title=" [2]
- ↑ #_ftn7" name="_ftnref7" title=" [7]
- ↑ #_ftn8" name="_ftnref8" title=" [8]
- ↑ #_ftn10" name="_ftnref10" title=" [10]
- ↑ #_ftn11" name="_ftnref11" title=" [11]
- ↑ #_ftn12" name="_ftnref12" title=" [12]
- ↑ #_ftn13" name="_ftnref13" title=" [13]
- ↑ #_ftn14" name="_ftnref14" title=" [14]
- ↑ #_ftn15" name="_ftnref15" title=" [15]
- ↑ #_ftn16" name="_ftnref16" title=" [16]
- ↑ #_ftn17" name="_ftnref17" title=" [17]
- ↑ #_ftn18" name="_ftnref18" title=" [18]
- ↑ #_ftn19" name="_ftnref19" title=" [19]
- ↑ #_ftn20" name="_ftnref20" title=" [20]
- ↑ #_ftn21" name="_ftnref21" title=" [21]
