Introduction The Workmen’s Compensation Act (Act VIII of 1923) came into force on 1st July 1924. It applies to the whole of India, including the State of Jammu and Kashmir. The Act provides for the payment of compensation by certain classes of employers to their workmen, for injury by accidents. The Workmen’s Compensation Act does not apply to… Read More »

Introduction The Workmen’s Compensation Act (Act VIII of 1923) came into force on 1st July 1924. It applies to the whole of India, including the State of Jammu and Kashmir. The Act provides for the payment of compensation by certain classes of employers to their workmen, for injury by accidents. The Workmen’s Compensation Act does not apply to factories covered by the Employees State Insurance Act. The Workmen’s Compensation (Amendment) Act, 1976, was passed with the object...


The Workmen’s Compensation Act (Act VIII of 1923) came into force on 1st July 1924. It applies to the whole of India, including the State of Jammu and Kashmir. The Act provides for the payment of compensation by certain classes of employers to their workmen, for injury by accidents.

The Workmen’s Compensation Act does not apply to factories covered by the Employees State Insurance Act. The Workmen’s Compensation (Amendment) Act, 1976, was passed with the object of providing suitable scales of compensation for the higher wage levels beyond Rs. 500. The reason is that all wages have been increased. Before the amendment, the Act covered workmen whose wages did not exceed Rs. 500 per month.

Defences of the Employer

Prior to the passing of this Act, the employer was liable to pay compensation only if he was guilty of negligence. Even in case of proved negligence, the employer could get rid of his liability by using any of the following defences:

  1. The Doctrine of Assumed Risks- If the employee knew the nature of tte risks he was undertaking when working in a factory, the employer had no liability for injuries. The court assumed in such case that the workman had voluntarily accepted the risks inci­dental to his work. The doctrine followed from the rule Volenti Non Fit Injuria, which means that one, who has volunteered to take a risk of injury, is not entitled to damages if injury actually occurs.
  2. The Doctrine of Common Employment- Under this rule, when several Persons work together for a common purpose and one of them is injured by some act or omission of another, the employer is not liable to pay compensation for the injury.
  3. The Doctrine of Contributory Negligence-Under this rule’ a person is not entitled to damages for an injury if he was himself guilty of negligence and such negligence contributed to the injury.

The three aforesaid defenses and the rule “no negligence no liabi­lity made It almost impossible for an employee to obtain relief in cases of accident. The Workmen’s Compensation Act ‘of 1923 radi­cally changed the .law. According to this Act, the employer is liable to pay compensation irrespective of negligence.

The Act looks upon compensation as a relief to the workman and not as damages payable by the employer for a wrongful act or tort. Hence contributory negligence by the employee does not disentitle him from relief. For the same reason, it is not possible for the employer to plead to the defence of common employment or assumed risks for the purpose of avoiding liability. Thus the Act makes it possible for the workman to get compensation for injuries, unimpeded by the legal obstacles set up by the law of Torts.

Two ways of claiming compensation

An injured workman may, if he wishes, file a civil suit for damages against the employer. Section 3(5) of the Workmen’s Compensation Act, however, provides that if such a suit is filed, compensation cannot be claimed under the Act and if compensation has been claimed under the Act, or if an agreement has been entered into between the employer and the workman for the payment of .compensation, no suit can be filed in the civil court. Thus the workman has to choose between two reliefs

  • Civil suit for damages and
  • Claim for compensation under the Act. He cannot have both. .

In a civil suit for damages, it is open to the employer to plead all the defences provided by the law of Torts. Therefore, a civil suit is a risky procedure for a workman and is rarely adopted. The legal position of workmen has, however, been improved by two Acts, viz., The Indian Fatal Accidents Act of 1855 and the Employers’ Liability Act of 1938.


Dependant. Section 2(d) gives a list of persons who come within the category of “dependant” of a workman. In ordinary language the dependant of a person is one who lives on his earnings. Under Sec­tion 2 (d) there are three categories of dependants.

  1. The following relations are dependants, whether actually so or not-widow, minor legitimate son, unmarried legitimate daughter, a widowed mother.-Sub-sec. (i).
  2. The following relations come within the category if any were wholly dependant on the earnings of the deceased workman at the time of his death-a son or daughter who has attained the age of 18 years and who is infirm–sub-sec. (ii).
  3. The following relations are dependants if they were wholly or partially so at the time of the workman’s death-widower; parent, other than widowed mother; minor illegitimate son; unmarried ille­gitimate daughter or a daughter legitimate or illegitimate if married and a .minor or if widowed and a minor, a minor brother or an un­married sister or widowed sister if minor; a widowed daughter-in­-law, a minor child from a predeceased son; a minor child from a predeceased daughter where no parent or child is alive: or a paternal grandparent if no parent of the workman is alive.–Sub-sec. (iii). Parent, other than widowed mother. Calcutta High Court held that the term ‘step mother’ does not include this phrase. Manada Devi v. Bengal Bone Mill. But Nagpur High Court held that the term includes an adoptive widowed mother. Additional Dy. Commissioner, Simbhum v. Smt. Lakhmibai Naidu.


Minor means a person who has not attained the age of 18 years.-Sec. 2(ff).


Sec. 2( e) provides that the term Employer “includes” the following:

  • anybody of persons, whether incorpo­rated or not
  • any managing agent of an employer
  • the legal representatives of a deceased employer, and
  • any person to whom the services of a workman are temporarily lent or let out, while the workman is working for him. The definition is not exhaustive.

Partial Disablement

Disablement, in ordinary language, means loss of capacity to work or move. Such incapacity may be partial or total and accordingly, there are two types of disablement, partial and total. In the Act, both types .of disablement are further subdivided into two classes, temporary and permanent.

By Section 2 (g) Temporary Partial Disablement means such disablement as reduces the earning capacity of a workman in any employment in which he was engaged at the time of the accident, and Permanent Partial Disablement means such disablement .as reduces his earning capacity in every employment he was capable of undertaking at that time. -The Act is not limited only to the physical capacity of disable­ment but extends to ~ the reduction of earning capacity as well. Sukkai v. Hukum Chand lute Mills Ltd.’

In the case of Partial Disablement, it is necessary that

(a) there should be. an accident,

(b) as a result of the accident the workman should suffer injury,

(c) which should result in permanent disablement and

(d) as a result whereof his earning capacity must have decreased permanently. In the proportion in which his earning capacity has been decreased permanently he is entitled to compensation.

The medical evidence showing loss of physical capacity is a relevant factor but it is certainly not the decisive factor as to the loss of earning capacity. It is the loss of earning capacity that has to be determined. Commrs. for Port of Cal. v. A. K. Ghosh.

The type of disablement suffered is to be determined from the facts of the case. But it is provided that every injury specified in Schedule I to the Act shall be deemed to result in permanent partial disablement. The schedule also mentions the percentage loss of earning capacity which is to be presumed in each such case.

Examples: (From Schedule 1) Percentage loss

Description of Injury of earning


Loss of both hands . . . . 100

Severe facial disfigurement . . . . 100

Absolute deafness .. . . 100

Loss of thumb . ‘. . . 30

Loss. of one eye . . . . 40

Middle finger of left hand (whole) . . 14

(There are 54 items listed in the Schedule with percentage loss of earning capacity for each item mentioned.)

Total Disablement

  • According to Section 2(i) total disable­ment means such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of the accident resulting in such disablement, provided that permanent total disablement shall be deemed to result from the permanent total loss of the sight of both eyes or from any combination of injuries specified in Schedule I, where the aggregate. Percentage of the loss of earning capacity as specified in that schedule against those injuries amounts to one hundred percent.


  • Wages include any privilege or benefit which is capable of being estimated in money, other than a travelling allowance or the value of any travelling concession. or a contribution paid by the employer of a workman towards any pension or provident fund or a sum ‘paid to a workman to cover any special expenses entailed on him by the’ nature of his employment.-Sec. 2 (m). .

The definition of wages is important because an employee whose monthly wages exceed Rs. 1000 is not a workman for the purpose of the Act. The definition of wages is not exhaustive. Wages include all pay­ment which can be calculated in terms of money, e.g., ordinary wages, extra payment for overtime, bonus and other inducements in the shape of payment. for idle time, free meals, allowances for grain and clothing, free or cheap housing, etc., offered to the workman to enter into a contract with the employer. Godavari Sugar Mills v. Sakuntala.

But travelling expenses or employer’s provident fund contributions are excluded. Local allowance to a workman for cost of living in a particular place forms part of wages. Share of profit or bonus under a profit-sharing scheme is wages. Chit/ra Tanti v. Tata Iron & Steel Co. I This sub-section read with section 5 indicates that payments made by a third party, e.g., tips by customers to boys in restaurants are not wages. Tips may be included within the terms wages if they were received by the workman with the knowledge of the employer. Penn v. Spiers & Ponds

Monthly Wages

Section 5 of the Act defines “monthly wages” and states the methods of calculating it. “Monthly” wages means the amount of wages deemed to be payable for a. month’s service (whether the wages are payable by the month or by whatever other period or at piece rate). Monthly wages are calculated as follows:

(a) Where the workman was in service for a continuous period of 12 months immediately preceding the accident, monthly wages shall be one-twelfth of the total wages due for the last twelve months of the period.

(b) Where the whole of the period of continuous service was less than one month, monthly wages shall be the average monthly amount which during the twelve months immediately preceding the accident was being earned by a workman employed on the same work by the same employer, or if there was no workman so employed, by a work­man employed on similar work in the same locality.

(c) In other cases, including cases in which it is not possible for want of necessary information to calculate the monthly wages under clause (b) the monthly wages shall be thirty times the total wages earned in respect of the last continuous period or service immediately preceding the accident from the employer who is liable to pay com­pensation divided by the number of days comprising such period. A period of service is deemed to be continuous which has not­ been interrupted by a period of absence exceeding 14 days.


The definition of the term workman is important because only a person coming within the definition is entitled to the reliefs provided by the Workmen’s Compensation Act. “Workman” is defined in Section 2(n) read with Schedule II to the Act.

In Schedule IT, a list (consisting of 32 items) is given of persons who come within the category of workmen. Examples: Persons employed otherwise than in a clerical capacity or in a railway to operate or maintain a lift or a vehicle propelled by steam, electricity or any mechanical power; person employed otherwise than in a clerical capacity in premises where a manufacturing process is carried on; seamen in ships of a certain tonnage; persons employed in constructing or repairing a building or electric fittings; persons employed in a circus or as a diver; etc.

Subject to the exceptions noted below, the term workman means ~

(a) a railway servant as defined in Section 3 of the Indian Rail­ways Act of 1890 who is not permanently employed in any administrative, district or sub-divisional office of a railway and not employed in any capacity as is specified in schedule II or

(b) employed on monthly wages not exceeding Rs. 1000 in any such capacity as is mentioned in Schedule II. I

From 1st April 1976, the limit of monthly wages for purposes of this Act, was raised from Rs. 500 to Rs. 1000. I

The words used in clause (b) mean that the wages must not exceed on average (now Rs. 1000) a month. The contract of employment may be expressed or implied, oral or in writing.

The Act provides that the following categories of persons are not to be deemed as workmen for the purposes of the Act :

(a) Persons working in the capacity of a member of the Armed Forces of the Union.

b) A person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer’s trade or business.

The exercise and performance of the powers and duties of a local authority or of any department acting on behalf of the Government shalt, for the purposes of the Act, unless a contrary intention appears be deemed to be the trade or business of such authority or department.

The State Government has been given the power to add to the list in Schedule II any hazardous occupation or specified injuries in such an occupation. The addition may be made by notification in the Official Gazette, with not less than 3 months’ notice.

There are legal decision regarding the question who is a work­man. The general rule is that there must be the relationship of master and servant between the employer and the workman. Workman is a person whom the employer can command and control in the manner of performing the work Yewen v. Noakes. & According to Wills, the following points are to be taken into consideration in determining the question of whether a person is a workman: (a) the term of engagement (b) the payment of wages (c) the power of control over the work (J) the power of dismiss

What is the employment of a casual nature?

Employees of a casual nature, if not employed in the employer trade or business do not come within the definition of the term workman as used in the Act. Generally speaking, casual work is one which is not regular .or continuous. A person doing odd jobs was employed by the occupier of private premises to clean windows. Held, his work was of a casual nature. Hill v. Begg.” A person officiating in a leave vacan­cy is not a casual worker. In the matter of Alam Singh.~

Whether the employment is for the purpose of the employer’s trade or business depends on whether the contract of service entered into by the employer was hi his capacity as a businessman or in a private capacity. When a coal mine employs workers to dig for coal it is for his trade or business. But a mine owner engaging workers for building his residence is not engaging them for his trade or business. A person who does service which is illegal and void cannot be a workman and cannot claim compensation. Kemp v. Lewis.”

Rules regarding workmen’s compensation

When is employer liable to pay compensation? Section 3(I) lays down that if personal injury is caused to a workman by accident arising out of and in course of employment, his employer shalt be liable to pay compensation.

From the above, it follows that the employer is liable when (a) injury is caused to a workman by accident and (b) the accident arises out of and in course of employment. An occupational disease is deemed to be an injury by accident and the employer is liable to pay compensation. The section itself provides that in certain cases of injury, no compensation is payable.

What is an accident?

Lord Macnaughten in Fenton v, Thor­ley & Company defined an accident as “an unlocked for mishap or an untoward event which is not expected or designed”. Thus a self­ inflicted injury is not an accident ordinarily. In Grime v. Fletcher, a person became insane as a result of the accident and then committed suicide. It was held that death was the result of the accident and com­pensation was awarded. But where insanity was not the direct result of the accident compensation cannot be awarded. e.g., where suicide was due to brooding over the accident.

Withers v. L. B. &. S. C. Railways.’

A series of tiny accidents, each producing some unidenti­fiable result and operating cumulatively to produce the final condition of injury, would constitute together an accident to furnish a proper foundation for a claim under the Act.

Personal Injury

”- A personal injury is not necessarily confined to physical or bodily injury. Injury includes psychological at physiological injuries such as nervous shock, insanity etc. The injury must be personal. An injury to the belonging of a workman does not come within the Act.

A workman had to go into a heating room and from there to a cooling plant. The changes in temperature caused pneumonia an, the workman died. Held, the death was due to personal injury. The Indian News Chronick Ltd. v. Mrs. Luis Lazarus.Death was the result of heat stroke. Held that dependant was entitled to compen­sations. Santon Fernandez v. B.P. (India) Ltd.”

Arising out of and in the course of employment:-

This phrase been copied from the English Act on the subject. The phrase has been interpreted in a large number of cases, English and Indian. But difficulties still remain.

In the course of employment:

This part of the phrase covers the period of time during which the employment continues. Compensation is payable if the accident occurs within the period of employment. Generally speaking, employment commences when the employee reaches his place of work and ceases when he leaves the place. ‘But there are several exceptions to the above rule.

(1) when the workman uses transport provided by the employer for the purpose of going to and from the place of work the time during which he uses the transport, is included in the course of his employment.

(2) The time during which the workman is upon the premises of the employer should be included in the period of employment. An employee of the E. I. Railways was knocked down and killed by a train while returning from duty by crossing the platform. area, Held, the accident arose out of and in course of employment.

(3) If the workman reaches the place of employment before the time when the employment begins: if it was necessary and not too early, or if at the time of the accident he was doing something to equip himself for the work, he is in course of employment

(4) If the workman with the knowledge and permission of the employer lives at some distance from the place where he is called upon to work and if in the course of proceeding at a reasonable time and in a reasonable manner from his place to the place of work. he meets with fatal accident then his accident must be held to arise out of and in course of employment.

(5) The period of rest during the period of employment is in the course of employment. But if the workman goes outside the employer’s premises during the rest period and meets with an accident, it is not in course of employment.

Arising out of the employment:

In Dennis v. White, it was observed that, “When a man runs a risk incidental to his employment and is thereby injured, then the injury arises out of the employment.”

Notional Extension:-

As a rule, the employment of a workman does not commence until he has reached the place of employment and does not continue when he has left the place of employment, the journey to and from the place of employment being excluded. It is now wen settled, however, that this is subject to the theory or notio­nal extension of employer’s premises so as to include an area which the Workman passes and repasses in going to and in leaving the actual place of work”.

Occupational Diseases

Persons employed in certain occupations are liable to be attacked by certain diseases. For example, a person engaged in employment involving exposure to dust containing silica is liable to contract silicosis, and telegraph operators are liable to have what is called Telegraphist’s Cramp. Such diseases are known as Occupational Diseases. Schedule III to the Workmen’s Compensa­tion Act contains a list of occupational diseases divided into three parts, part A, Part B and Part C.

Part A includes Anthrax, Com­pressed Air Sickness, Poisoning by lead tetra-ethyl and nitrous fumes.

Part B includes poisoning by lead compounds, phosphorus, mercury etc., cancer of the skin, telegraphist’s cramp etc.

Part C includes Silicosis, Asbestosis etc.

Section 3(2) of the Act provides that an occupational disease. “shall be deemed to be an injury by accident within the meaning of this section and. unless the contrary is proved, the accident shall be deemed to have arisen out of, and in the course of, the employment.”

For diseases included in Part A of Schedule III, the employer’s liability’ to pay compensation when a workman employed by him con­tracts the disease. For the diseases included in Part B, the employer is liable if a workman contracts it while in his service and if the workman has been in his service for a continuous period of six months. which period shall not include a period of service under any other employer in the same kind of employment.

For diseases included in Part C of Schedule III, the workman is entitled to Com­pensation if he has been in the service of one or more employers for such continuous period as the Central Government may specify. In such cases the compensation is to be paid by all the employers in such proportions as the Commissioner of Workmen’s Compensation may deem just.-Sec. 3(2A).

This list of occupational diseases and the employments produc­ing them as contained in Schedule In may be extended (by notifica­tion) by the State Government in the case of Parts A and B and by the Central Government in the case of Part C.

Section 3 (4) lays down that save as provided above, no compen­sation shall be payable to a workman in respect of any disease unless the disease is directly attributable to a specific injury by accident aris­ing out of and in the course of his employment.

When is an employer not liable to pay compensation?

Section 3 of the Act provides that the employer is not liable to pay compensa­tion in the following cases :

(a) in respect of any injury which does not result in the total or partial disablement of the workman for a period exceeding three days

(b) in respect of any injury not resulting in death, caused by an accident which is directly attributable to-­

(i) the workman having been at the time thereof under the influence of drink or drugs, or,

(ii) the wilful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workmen, or,

(iii) the wilful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of workmen.

As regards exception clause (b) (in a workman would not lose his right to compensation only by reason of tile fact that he had acted thoughtlessly or foolishly.

From Section 3 it follows that the employer is not liable to pay compensation under the Workmen’s Compensation Act. When the accident did not arise out of or in the course of the employment, When the workmen filed a suit for damages in the Civil Court: and When disablement lasted 3 days or less(that is ,injuries were not significant)

The Amount of Compensation

The Act provides for compensation for –(1) Death(2) Permanent total disablement (3) permanent partial disablement and (4) Temporary disablement.

For determining the amount of compensation payable under the Act, Section 4 has to be rad with Schedule IV to the Act. In Schedule IV, there is a table having four columns.

For Permanent Partial Disablement: Schedule I to the Act contains a list of injuries deemed to result in permanent partia1 disablement together with the percentage loss of earning capacity which is presumed to occur in each case.

When permanent partial disablement occurs from an injury specified in Schedule I, the amount of compensation is to be calculated by finding out from Schedule IV the compensation payable for permanent total disablement to the workman concerned and multiplying it with the percentage loss of earning capacity as stated in Schedule I. Thus, suppose that there is an injury that, according to Schedule I, causes a 30% loss of earning capacity. Suppose that the monthly wage of the workman is Rs. 50. From Schedule IV it is seen that for permanent total disablement we would have obtained Rs. 10,080. Hence for the permanent partial disablement, he would get 30% of Rs. 10,080, i.e., Rs. 3,024.

In the case of an injury not specified in Schedule I, the percentage loss of earning capacity permanently caused must be found out. This figure multiplied by the amount of compensation for permanent total disablement gives the amount of compensation payable for the partial disablement.

Where more injuries than one are caused by the same accident, the amount of compensation payable under this head shall be aggre­gated but not so in any case as to exceed the amount which would have been payable if permanent total disablement had resulted from the injuries.

For Temporary disablement: Where as a result of the injury there is a temporary disablement, total or partial, the employer is required to make a half-monthly payment to the workman. The rate of half-monthly payment is given in column 4 of Schedule IV. (There are different rates for different wage groups.)

Rules regarding Half-monthly Payment: The first half-monthly payment is to be made on the sixteenth day (i) from the date of the disablement, where such disablement lasts for a period of 28 days or’ more, or (ii) after the expiry of a waiting period of three days from the date of the disablement, where such disablement lasts for a period of fewer than 28 days. Thereafter the payments must be made half ­monthly during the disablement or during a period of five years. whichever period is shorter.

From any lump sum payment made for compensation and from any half-monthly payment, any sum which the workman has received from the employer, prior to the receipt of the lump sum or half­ monthly payment, may be deducted. But any sum received for medical treatment, cannot be so deducted.-Sec. 4 (1) (a).

No half-monthly payment shall in any cases exceed the amount, if any, by which half the amount of the monthly wages of the work­man before the accident exceeds half the amount of such wages which he is earning after the accident.-Sec. 4 (1) (b).

On the ceasing of the disablement before the date on which any half-monthly payment falls due, there shall be payable in respect of that half-month a sum proportionate to the duration of the disable­ment in that half-month.-Sec. 4 (2).

Any half-monthly payment payable to’ a workman may be reviewed by the Commissioner on the -application of either the employer or the workman on the ground that there has been a change in the condition of the workman. The payment may upon review, be continued, increased, decreased or ended or (in case the injury has resulted in a permanent disablement) converted into a lump sum -Sec. 6. .

A right to receive half-monthly payment may, by agreement or by order of the Commissioner, be redeemed by the payment of a lump sum. This is called commutation of half-monthly payments.-Sec. 7.


Section 8 lays down the follow­ing rules regarding the distribution of compensation :

  1. Compensation for death and lump sum payment due to a woman or to a person under a legal disability must be deposited with the Commissioner.
  2. But in the case of a deceased workman, an employer may make to .any dependent advances on account of compensation not exceeding an aggregate of one hundred rupees. So much of such aggregate as does not exceed the compensation payable to that depen­dent shall be deducted by the Commissioner from such compensation and repaid to the employer.
  3. Any other sum amounting to not less than Rs. 10 which is payable as compensation may be deposited with the Commissioner on behalf of the person entitled thereto. .
  4. The receipt of the Commissioner shall be sufficient discharging respect of any compensation deposited with him.
  5. After the deposit of the compensation, the Commissioner shall deduct therefrom the actual cost of the- workman’s funeral expenses to an amount not exceeding Rs. 50 and pay the’ same to the person by whom the expenses were incurred.
  6. The Commissioner may serve notices calling upon the depen­dents to appear before him for the purpose of determining the distri­ bution of the compensation.
  7. If the Commissioner is satisfied that no dependent exists, he shall repay the balance of the money to the employer.
  8. The Commissioner shall on application by the employer, furnish a statement showing in detail all disbursements made.
  9. The compensation money is to be distributed among the dependents in such proportions as the Commissioner thinks fit. The whole of it may be given to one person.
  10. Except in the case of a woman or a person under a legal disability, the compensation money is to be paid Jo the person entitled thereto
  11. Money payable to a woman or a person under a legal dis­ ability may be invested or otherwise dealt with as the Commissioner thinks fit. Half-monthly payments payable to a person under a legal disability may be paid to a dependent of the workman or to any other person whom the Commissioner thinks best fitted to provide for the welfare of the workman.
  12. The orders of the Commissioner regarding the distribution of compensation may be varied later if necessary.
  13. Notice must be given to the parties affected.
  14. Where under the previous para, the Commissioner varies an order on the ground .that the payment of compensation to any person has been obtained by fraud, impersonation or other improper means,. any amount so paid may be recovered by the procedure laid down for the recovery of arrears of land revenue.

Other provisions regarding compensation

Payment of Compensation

[Sec. 4A.] Compensation shall be paid as soon as it falls due. Where the employer does not accept the liability to the extent claimed, he must make provisional payment based on the extent of liability that he accepts. This is without prejudice to the right of the workman to make any further claim. If an employer fails to pay the compensation within one month of the date on which it fell due, the Commissioner may direct the payment of simple interest thereon at 6%. If the Commissioner thinks that there. is no justification for the delay, he may direct. the payment of a further sum, not exceeding 50% of the sum due, by way of penalty. .

Protection of Compensation.

Save as provided by this Act, no lump sum or half-monthly payment payable- under the Act shall in any way be capable of being assigned or charged or be liable to attachment or pass to any person other than’ the workman by operation of law, nor shall any claim be set off against the same.–Sec. ..9. This section has been framed, to protect as far as possible the workman from moneylenders.

Notice and Claim

.Section 10 of the Act provides that no claim or compensation shall be entertained by the Commissioner unless notice of the accident has been given in the manner provided as soon as practicable. (This is subject to certain exceptions noted below.) The required notice must be served upon the employer or upon any of several employers or upon any person responsible to the employer for the management of any branch of the trade or business in which the injured workman was employed.

The notice shall give the name and address of the person injured, the cause of the injury and the date of the accident. The notice may be given by the injured workman or by anybody on his behalf. It may be served by delivering it or sending it by registered post.

The State Government may require that any prescribed class of employers shall keep at the place of employment a notice book (acces­sible to all workers or persons acting bonafide on their behalf) where the occurrence of accidents may be recorded. An entry in the notice­ book is sufficient notice.

The want of notice or any defect or irregularity in it shall not be a bar to a claim in the following cases :

(1) Where a workman dies or an accident occurring in the pre­mises of the employer or while working under the control of the em­ployer or of any person employed by him~ and the workman died on the premises or without leaving the vicinity of the premises.

(2) If the employer or anyone of several employers or any person responsible to the employer for the management of any branch of the trade or business in which the injured workman was employed, had knowledge of the accident from any other source at or about the time. when it occurred.

(3) If the Commissioner is satisfied that the failure to give notice was due to sufficient cause.

A workman is bound to give notice of any accident which is not merely trivial, and it is not for him to decide whether it is likely to give rise to a claim for compensation.

Section 10 also provides that a claim for compensation must be preferred before the Commissioner within two years of the occurrence of the accident or the date of death as the case may be. In case the accident is the contracting of a disease the date of its occurrence is the first of the days during which the workman was continuously absent from work in consequence of the disablement caused by the disease. The Commissioner may entertain a claim filed after the prescribed time if he is of opinion that the failure to file it within time, was due to.

Fatal Accident

Section 10 A provides that where a Commis­sioner receives information that a workman has died as a result of an accident arising out of and in course of his employment, he may send by registered post a notice to the workman’s employer requiring him to submit, within thirty days of the service of the notice, a state­ment in the prescribed form, giving the circumstances attending the death of the workman, and indicating whether in the opinion of the employer, he is or is not liable to deposit compensation on account of the death.

If the employer is of opinion that he is liable, he shall make the deposit within thirty days of the service of the notice. If he is of opinion that he is not liable, he must state his grounds. In the latter case, the Commissioner, after such enquiry as he may think fit inform any of the dependents of the .deceased workman that it is open to them to prefer a claim and may give them such further information as he may think fit.

Section 10 B provides that where by any law for the time being in force, notice is required to be given to any authority by or on behalf of an employer, at any accident resulting in death or serious bodily injury, the person required to give the notice shall also send a report to the Commissioner. The report may be sent alternatively to any other authority prescribed by the State Government.

The State government may extend the scope of the provision requiring reports of fatal accidents to any class of premises. But Sec. 10 B does not apply to factories to which the Employees’ State Insurance Act applies.

Medical Examination. [Sec. 11.]

  1. After a workman gives notice of an accident, the employer may, within three days of the service of the notice, offer to have him examined free of charge by a qualified medical practitioner.
  2. Any workman in receipt of half-monthly payments may also be required to submit for examination from time to time.
  3. The Examination must be in accordance with the rules framed for the purpose.
  4. If the workman refuses, without sufficient cause, to submit to the examination or if he leaves the vicinity of the place in which he was employed, his right to receive compensation shall be suspended during the continuance of the refusal or until his return to the vicinity and examination.­
  5. In case 1he workman, who refused medical examination, subsequently dies, the Commissioner has discretionary powers of direct payment of compensation to the dependents of the deceased workman.
  6. The condition of an injured workman may be aggravated by refusal to submit to a medical examination or refusal to follow the instructions of the medical examiner or failure to be attended by or follow the instructions of a qualified medical practitioner
  7. In such a case he would get compensation, not for the aggravated injury, but for what the injury would have been having he been properly treated.

Employment by contractors. [Sec. 12.]

When an employer engages contractors who engage workmen, any workman injured may recover compensation from the employer if the following conditions are satisfied :

(a) the contractor is engaged to do a work, which is part of the trade or business of the principal,

(b) the engagement is in the course of or for the purposes of his trade or business, and

(c) the accident occurred in or about the vicinity of the employer’s premises.

The workman may also proceed against the contractor. So he has alternative remedies. When the employer pays compensation, he is entitled to be indemnified by the contractor.

Remdies of employer against a stranger. [Sec. 13.]

Where a workman has recovered compensation in respect of any injury caused under circumstances creating a legal liability of some person over than the person by whom the compensation was paid and any person who has been called on to pay an indemnity under Section 12 shall be indemnified by the Person so liable to pay damages as aforesaid.

Insolvency of Employer. [Sec. 14.]

The liability to pay workmen’s compensation can be insured against. If an employer who has entered into a contract of insurance for this purpose, becomes insolvent or enters into a scheme of composition or arrangement or (being a company) is wound up, the rights or the employer as against the insurer shall be transferred to and vest in. the workman. The liability to pay compensation to a workman is to. be treated as a pre­ferred debt under insolvency and winding” up.

For this purpose, the liability to pay half-monthly payments is to be taken as equivalent to the lump sum payment into which it can be commuted. This sec­tion does not apply where a company is wound up voluntarily merely for the purpose of reconstruction or amalgamation with another company.

Transfer of Assets by Employer. [Sec. 14A..]

Where an employer transfers his assets before any amount due in respect of any compensation, the liability wherefore accrued before the date of the transfer, has been paid, such amount shall, notwithstanding anything contained in any other law for the time being in force, be the first charge on that part of .he assets so transferred as consists of immovable property.

Master and Seamen.

So far as masters and seamen are con­cerned, the provisions of the Act apply with certain modifications laid down in Section 15.


The State Government may, by notification in the offi­cial Gazette, direct employers to submit returns regarding compensa­tion paid by them and particulars relating to the compensation.­ Sec. 16.

Contracting Out

Section 17 provides that any contract by which a worker relinquishes bis right to receive compensation for in­jury is null and void in so far as it purports to remove or reduce the liability of any person to pay compensation under this Act.


Section 18A provides for penalties for failure to per­form the duties prescribed under the Act, e.g., failure to send returns or maintain notice books etc.

Bar to Civil Suits.

A Civil Court has no jurisdiction to settle, decide or deal with any question which, because of the provisions of the Act, is required to be decided or dealt with by the Commissioner or to enforce any liability under this Act.-Sec. 19(2).

Recovery of the amount awarded

Any amount payable under the Act, whether under an agreement or otherwise, shall be recovered as an arrear of land revenue.–Sec. 31


The Act provides for the appointment of Officers to be known as Commissioners of Workmen’s Compensation. The Commissioners are to determine the liability of any person to pay compensation (includ­ing the question of whether a person is or is not a workman) and the amount or duration of compensation (including any question as to the nature or extent of disablement). No civil court bas jurisdiction to deal with matters which are required to be dealt with by a Com­missioner. Certain powers have been given to the Commissioners, e.g., the power to call for further deposits. The Commissioner has the powers of a Civil Court.

Form of application:

No application for settlement of any matter by a Commissioner shall be made, if the parties have been able to settle it by agreement. An application to the Commissioner shall be made in the pres­cribed form according to the rules, and accompanied by a prescribed fee. The following particulars must be given namely-

(a) concise statement of the circumstances and the relief claimed;

(b) in case of a claim for compensation against an employer, the date of service of notice of accident, with its due time of notice and the reason why notice was not given;

(c) the names and addresses of the parties; and

(d) except in case of an application by a dependent for compensation a concise statement of the matter on which, agreement has and of those on which agreement has not been come to.

If the applicant is illiterate or for any reason is unable to furnish the required information, the application, if the applicant so desires, shall be prepared under the direction of the Commissioner.-Sec. 22.

Appearance of parties:

Appearance may be done on behalf of the applicant by a legal practitioner or an official of an Insurance Com­pany, or an authorised person of a registered Trude Union, duly authorised.-Sec. 24.

Appeals and References:

For proceedings under the Act, the High Court of the State is the Appellate Court. The Commissioner can refer a question of law to the High Court for decision and he must decide the matter according to such decision.–Sec 27.


An appeal lies to the High Court from the following orders of a Commissioner­

(a) an order awarding as compensation a lump sum whether by way of redemption of a half-monthly payment or otherwise or an order awarding interest or penalty under section 4A;

(b) an order refusing to allow redemption of a half-monthly payment ;

(c) an order providing for the distribution of compensation among the dependents of a deceased workman, or disallowing any dain1 of person alleging himself to be such dependent;

(d) an order allowing or disallowing any claim for the amount of an indemnity under the provisions of section 12(2) ;

(e) an order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions.

Other Provisions Regarding Appeal:

  1. No appeal shall lie against any order unless a substantial question of law is involved in the appeal and, in the case of an order other than an order such as is referred to in clause (b), unless the amount in dispute in the appeal is not less than Rs. 300.
  2. No appeal lies in any case in which the parties have agreed to abide by the decision of the Commissioner, or in which the order of the Commissioner gives effect to an agreement come to by the parties.
  3. No appeal by employer lies unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the applicant has deposited with him the amount payable under the order appealed against.
  4. The period of limitation for an appeal under this section shall be 60 days and the provisions of Section 5 of the Indian Limitation Act, 1908, shall be applicable to appeals under this section.

Updated On 9 May 2022 3:43 AM GMT
Mayank Shekhar

Mayank Shekhar

Mayank is an alumnus of the prestigious Faculty of Law, Delhi University. Under his leadership, Legal Bites has been researching and developing resources through blogging, educational resources, competitions, and seminars.

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