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An Overview of Workmen’s Compensation Act 1923

Posted on 17 April, 2022
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The Workmen’s Compensation Act 1923 is a social security scheme for workers. The act came into force after the dangers labourers were exposed to come to the fore. Earlier, there was the Compensation Act of 1884, where it was the employer’s responsibility to pay compensation to workers only for accidents or injuries on roads. However, post realization that it was not enough came the Workmen’s Compensation Act 1923.

Workmen's Compensation Act

Scope of the Act

The Workmen’s Compensation Act, 1923 says that the employer must look after the welfare of employees and provide adequate compensation in case an employee meets with an accident and sustains injuries at work premises during working hours. The foremost aim is to ensure that a worker enjoys a sustainable life after an employment-related injury.

The Act is applicable across India, except for Jammu and Kashmir. Also, it is not applicable in areas covered by the Employees State Insurance Act, 1948. It covers:

  • Construction workers

  • Factory workers

  • Workers involved in the maintenance of roads and bridges

  • Workers carrying out loading and unloading work on ships

  • Workers of newspaper establishments

  • Drivers and cleaners

  • Workers in mechanical jobs

A contractual worker is also liable to receive compensation under Workmen’s Compensation Act, 1923.

Employer’s Liability under the Act

Section 3 of the Act specifies the circumstances under which an employer is liable to pay compensation. They are:

  • In case an employee has suffered a personal injury due to an accident

  • The accident has taken place during employment

  • The injury has resulted in the employee’s death or partial/total disablement for more than 3 days

The section also points out circumstances where the employer is not liable to pay any compensation. They are:

  • If the injury is a result of the employee being under the influence of drugs

  • If the employee disobeyed the security orders wilfully

  • If the injury didn’t cause partial or total disablement for more than 3 days

List of Injuries Covered Under Schedule 1 of the Act

An employer is liable to pay compensation for injuries resulting in:

  • Partial disablement

  • Total disablement

Partial disablement is further divided into two types - temporary and permanent. Temporary disablement reduces the employee’s earning capacity in that organization, while a permanent disablement brings down the earning capability for every subsequent employment.

On the other hand, total disablement incapacitates an employee in all aspects going forward.

Summing it Up

Given that workers are subjected to a range of risks, the Workmen’s Compensation Act, 1923 plays a pivotal role in protecting their interests. It provides them adequate compensation in case of a mishap and makes sure they are not financially deprived.

  • Workmen’s Compensation
  • Product Code: 4010
  • Product UIN: IRDAN115CP0017V01201920

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