Comprehensive essay on the workmen's compensation act, 1923 in India

The basis of Workmen’s Compensation Act, 1923 passed in March 1923 and was put into force on 1st July 1924 is that the State (Government) cannot be a silent spectator to the suffering of the working class engaged in factories or establishments who are exposed to the various risks to their limbs and lives.

There are chances of accidents and injury while working on sophisticated mechanical devices.

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Amendments to the Act:

The Act was amended firstly in 1933 by the Workmen’s Compensation (Amendment) Act, 1933, secondly in 1938 by the Workmen’s Compensation Amendment Act, 1938, thirdly in 1938 by the Workmen’s Compensation (Amendment) Act, 1938, fourthly in 1946, fifthly in 1959, sixthly in 1962 by the Workmen’s Compensation (Amendment) Act, 1962 and then in 1984 by the Workmen’s Compensation (Amendment), Act, 1984. Now amendments have been made by The Law Commission of India in 1989 and lastly by the Workmen’s Compensation (Amendment) Act, 1995.

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Objects and Aims of the Act:

(1) To compensate a workman incapacitated by an injury from acci­dent.


(2) To make efforts on prevention of accidents, giving workmen greater freedom from anxiety and rendering industry more attractive.

(3) Protection of workmen, as far as possible, from hardship arising from accidents.

(4) The main object of the Act is to impose legal obligation on the employers to pay compensation to workmen involved in accidents while working in the premises.

Scope of the Act:


The Act is applicable only to those workmen working in industries as specified in the Act. The Act affords protection to a workman from losses or injury caused by accident arising out of and in the course of employment subject to certain exceptions as laid down in the Act.

Employer’s Liability for Compensation:

To make the employer pay compensation, the death or injury suffered by the workman must be consequence of an ‘accident arising out of and in the course of his employment’ is dependent upon the following four condi­tions:

(1) The casual connection between the injury and the accident (i.e., personal injury is caused to workman while on work);

(2) The injury and accident caused during the course of employment;

(3) The probability tenable to reason that the work contributed to the causing of personal injury; and

(4) The applicant proves that it was the work and the resulting strain which contributed to or aggravated the injury.

1. Applicability of the Act:

The Act is applicable throughout India except the State of Jammu & Kashmir. The Act does not apply to those areas which are covered by the Employees’ State Insurance Act, 1948.

2. The salient features of the Act are as follows:

I. Extent and Application:

The Act extends to whole of India. It is also applicable to the workman
recruited by companies/establishments registered in India and sent for work abroad. It applies to:

(a) All railway servants 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 to the Act;

(b) Persons employed in any such capacity as is specified in Schedule II to the Act. Schedule II includes persons employed in factories, mines, plantations, mechanically propelled vehicles, construction works and certain other hazardous occupations.

In all, there are 48 employments listed in the Schedule ; and

(c) Persons employed in employments added to Schedule II by the State Government in exercise of the powers conferred on them under section 2(3) of the Act. In this connection, a statement indicating the additions made so far by different State Govern­ments is enclosed (Annex-I).

There is no wage limit for coverage under the Act. All the employees employed in Scheduled employment including the railway servants men­tioned at (a) above, are therefore, covered under the Act.

II. Contingencies in which Compensation is Payable:

Compensation is payable in case of temporary/permanent disablement or death as a result of an employment injury. The contracting of any disease listed in Schedule III to the Act is deemed to be an injury by accident.

III. Occupational Diseases:

If a workman employed in the employment specified in Schedule III of the Act contracts any occupational disease peculiar to that employment he becomes eligible for payment of compensation under the Act.

The occupa­tional diseases should be contracted while in the service of an employer in the specified employment. The Schedule III divides the occupational dis­eases in three parts, namely Part-A, Part-B and Part-C.

For diseases specified in Part-A, there is no qualifying period of employment. In case of diseases specified in Part-B, a person should have been employed in the specified employment for a continuous period of not less than six months before the disease is contracted.

For the diseases specified in Part-C, the qualifying period is specified by the Central Government. The qualifying period speci­fied for the diseases figuring in Part-C of the Schedule is as given below:

(a) Pneumoconioses 7 years

(b) Pagassosis 3 years

(c) Byssionesis 7 years

No qualifying period is required to be specified


(1) Where the monthly wages of a workman exceed two thou­sand rupees, his monthly wages for the purposes of (a) and (b) above shall be deemed to be two thousand rupees only.

(2) The minimum rates of compensation for permanent disablement and death specified in the Act is rupees Sixty thousand and fifty thousand respectively. The maximum amount of compensation works out to about Rs. 2,74,248.00 for permanent disablement and Rs. 2,28,540.00 for death.

V. Administration:

The Act does not provide for appointment of Inspectors. However, under Section 32 of the Act, the State Governments/Union Territory Admin­istrations have to frame rules to carry out the purposes of the Act.

The rule making power under the Act was originally vested in the Central Govern­ment and in exercise of these powers, the Workmen’s Compensation Rules, 1924 were framed. Some of the State Governments have subsequently farmed their own rules under the Act.

In this connection, a statement showing the names of the States/UTs, which have so far framed necessary rules under the Act, is attached (Annex-II). The remaining States/UTs are being reminded to expedite the framing of rules under the Act.

VI. Settlement of Claims under the Act:

The claims for compensation broadly fall in three categories, namely (i) uncontested cases of disablement; (ii) disputed cases of disablement and (iii) fatal cases. The procedures for settlement of the three types of cases are as given below:

(i) Uncontested Cases:

(a) After a workman has given notice of the accident, the employer is expected to arrange for medical examination of the workman. It must be free of charge. The medical Examination will indicate the nature of the disablement.

(b) If the disablement is of temporary nature the employer will pay compensation as half monthly payments, direct to the workmen.

(c) If the disablement is of permanent nature compensation will be paid in lump sum by the employer to the workman if he is a male over 18 years of age. In the case of woman and minors, the employer will deposit the amount of compensation with the Com­missioner, for disbursement.

(d) Where a workman has agreed to accept and has taken a smaller sum than the amount fixed by the Act his right to bring proceed­ings for the balance are protected.

(e) Any agreement with the workman for a lump sum payment must be registered with the Commissioner by the employer.

Disputed Cases:

(a) If the employer refuses to pay compensation or does not pay the full amount due, the workman has to make an application to the Commissioner for Workman’s Compensation appointed by the State Government or Union Territory.

The application has to be made in Form ‘F* prescribed under the Workman’s Compensation Rules. An illiterate person can have the application prepared under the direction of the Commissioner.

(b) A claim for compensation must be preferred before the Commis­sioner within 2 years of the occurrence of the accident or in the case of death within 2 years of the date of death.

In the case of contracting of a disease the accident is deemed to have occurred on the first of the day during which the workman was continuously absent in consequence of the disablement caused by the disease.

(iii) Fatal Cases:

(a) The amount of compensation due has to be deposited by the employer with the Commissioner for Workmen’s Compensation. The Act specifically provided that no payment made directly by the employer shall be deemed to be a payment of compensation.

(b) The Commissioner shall distribute the lump sum amount of com­pensation to the dependants in such proportion as he may decide.

(c) If the employer does not deposit the compensation the dependant or dependants have to make an application to the Commissioner in Form ‘G’ prescribed under the Workmen’s Compensation Rules for the issue of an order to deposit compensation.

VII. Extension of the provisions of the Workmen’s Compensation Act to Hazardous Employments in Agriculture:

The Workmen’s Compensation Act, 1923 already applies to workers employed in farming by tractors or other contrivances driven by steam or other mechanical power or electricity etc. The State Governments of Andhra Pradesh etc. were advised in March, 1976 to consider addition of the follow­ing employments to Schedule-II to the Act in accordance with the provision of sub-Section (3) of Section 2 of the Act:

(i) Employed in clearing of jungles or reclaiming land or ponds in which on any one day of the proceeding twelve months more than twenty-five persons have been employed ;

(ii) Employed in cultivation of land or rearing and maintenance of live stock or forest operations or fishing in which on any one day of the proceeding twelve months more than twenty-five persons have been employed ;

(iii) Employed, otherwise than in cleric. I capacity, in installation, main­tenance, repair of pumping equipment used for lifting of water from wells, tube-wells, ponds, lakes, stream etc.;

(iv) Employed, otherwise than in clerical capacity, in the construction, boring or deepening of an open well/dug well through mechanical contrivances;

(V) Employed, otherwise than in clerical capacity in the construction, working, repair or maintenance of a bore well, bore-cum-dug well, fitter point etc.;

(vi) Employed in spraying and dusting of insecticides or persticides in agricultural operation/or plantations;

(vii) Employed in working or repair of maintenance of bulldozers, trac­tors, power tillers etc.

As per available information, the State Governments of Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Haryana, Karnataka, Kerala, Maharashtra, Meghalaya, Orissa, Punjab, Tamil Nadu and Tripura and U.T.

Administra­tions of Chandigarh, Dadra and Nagar Haveli and Pondicherry have already made the proposed additions with effect from 15.9.95.

The Central Govern­ment has included all the above mentioned employments in Schedule II of the Act by amending the Schedule. The matter is not, therefore, being pursued further with the remaining States/UTs.

VIII. Last Amendment of the Act in 1995

(a) The provisions of the Workmen’s Compensation Act, 1923, were reviewed by the Law Commission of India (1974) and (1989). The Commission had made a number of recommendations for amend­ment of the Act.

Based on their recommendations and suggestions received from the Ministries/State Governments. The Act has been amended for carrying out certain amendments.

The amendments made by the Workmen’s Compensation (Amendment) Act, 1995 provides inter-alia for enhancement in the rate of compensation from 40% to 50% and from 50% to 60% of the monthly wage in the case of death and permanent total disablement respectively;

(b) The minimum rate of compensation for permanent total disable­ment and death have been fixed at Rs. 60,000/- and Rs. 50,000/- respectively, as against the previous rates of Rs. 24,000/- and Rs. 20,000/- respectively;

(c) The monthly wage ceiling specified in Explanation II under Sec­tion 4(1) for working out the maximum amount of compensation has been enhanced from Rs. 1000/- to Rs. 2000/-. The rate of compensation is linked to the age of the workman at the time of his disablement or death.

The workers getting disabled/dying at an early age are, therefore entitled to compensation at a compara­tively higher rate.

(d) A provision for payment of Rs. 1000/- towards funeral expenses has been made in addition to compensation;

(e) The Act has been made applicable to workmen recruited by Com­panies registered and based in India and sent for work abroad;

(f) Sixteen new employments have been added to Schedule-II. In addition to State Governments, the Central Government has also been empowered to add hazardous employment in Schedule-II.

(g) Three new occupational diseases added to Schedule-Ill. Power to add occupational diseases in Schedule-Ill conferred also on the Central Govt.

(h) The claimant of compensation may have the claim/petition filed/ transferred also before the Commissioner for the area in which the workman ordinarily resides.

Except this all other provisions of the Workmen’s Compensation (Amendment) Act, 1995 have been brought into force with effect from 15.9.1995.

Statement showing the names of States which have framed the Rules under the Workmen’s’ Compensation Act, 1923.

1. Pondicherry

2. Uttar Pradesh

3. Tamil Nadu

4. Kerala

5. Andhra Pradesh

6. Sikkim

7. Tripura

8. Rajasthan

9. Himachal Pradesh

10. Goa

11. Dadra & Nagar Haveli

12. Daman and Diu

13. Lakshadweep Andaman & Nicobar Karnataka

16. Maharashtra


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