Employees Compensation Act 1923

  • Blog|Indian Acts|
  • 3 Min Read
  • By Taxmann
  • |
  • Last Updated on 6 February, 2024
Employee’s Compensation Act, 1923 is very old enactment for providing social security to workmen. The Act was known as Workmen’s Compensation Act, but was named as Employee’s Compensation Act w.e.f. 18-1-2010 as now employees in clerical capacity are also eligible for compensation.
Under this Act, an employee who dies or suffers disablement (partial or total) due to accident is entitled to get compensation from employer.
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1. Applicability of Employees Compensation Act to Apprentices

Employee’s Compensation Act, 1923 has been made applicable to apprentices under the Apprentices Act, with minor modifications as given in Schedule to the Apprentices Act. Since an employee is entitled to get compensation from ESIC, an employee covered under ESI Act is not entitled to get compensation under Employee’s Compensation Act, as per section 53 of ESIC. An employer is liable to pay compensation if personal injury is caused to an employee by accident arising out of and in the course of his employment. [Section 3(1) of Employee’s Compensation Act].

1.1 Employee Means:

    1. Railway servant but not permanently employed in railway office
    2. Crews of ship or aircraft, driver, helper, mechanic or helper of a motor vehicle or a person recruited for work abroad by a company; who is employed outside India in capacity as specified in Schedule II to the Act
    3. Employed in any capacity as specified in Schedule II but does not include person employed in arm forces [section 2(dd) of Employee’s Compensation Act as amended w.e.f. 18-1-2010].

1.2 ‘Workman’ means:

    1. Railway servant
    2. Crew of ship
    3. Crew of aircraft
    4. Driver, cleaner, helper or mechanic of motor vehicle
    5. Person recruited abroad
    6. Employed in capacity specified in Schedule II. (Now the definition has been deleted 18-1-2010).

Mode of computation of compensation is given in section 4 of the Act. Compensation is payable to employee for total or partial disablement. Compensation is payable to dependents of employee in case of death. If a workman accepts compensation under the Act, he cannot file civil suit against employer for damages. If a workman has instituted claim for compensation before Commissioner for Workmen’s Compensation, he cannot file a civil suit. [section 3(5)].

The compensation paid under the Act is protected, i.e. it cannot be attached or assigned. [section 9 of Employee’s Compensation Act]. Principal Employer is liable to pay the amount of compensation for the injury suffered by workman employed through contractor, if the accident arises as a result of accident arising out of and during the course of employment. [section 12]. A Commissioner for Employee’s Compensation is appointed by Government. Qualifications of Commissioner have been prescribed in section 20(1) of Employee’s Compensation Act.

The compensation must be paid only through the Commissioner of Employee’s Compensation in case of death or total disablement. Any lump sum payment to employee under the Act must be made only through Commissioner. Appeal against order of Commissioner can be filed under section 30(1) of Employees Compensation Act to High Court. Appeal can be filed only if amount involved is not less than Rs. 10,000 or such higher amount as may be notified by Central Government [amendment w.e.f. 15-5-2017].

Appeal can be filed only if amount is deposited. An employer can insure his liability for payment of claim under Employee’s Compensation Act.   The employee is eligible to get ‘disablement benefit’ only when the injury arises out of and during the course of employment. Similarly, a workman is entitled to get compensation only if accident is ‘arising out of and during the course of employment’.  

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