1.    Introduction to Employee Compensation

The Employee’s Compensation Act, 1923, is a significant social welfare legislation designed to protect workers engaged in industrial, physical, or hazardous occupations[1]. By establishing a legal framework, the Act ensures that employees, or their dependents in case of death, receive adequate financial compensation for injuries, disabilities, or fatalities resulting from workplace accidents. The law plays a critical role in safeguarding the rights of employees while promoting accountability among employers.

Workplace injuries often lead to loss of income, medical expenses, and emotional distress for the employee or their family[2]. Recognizing this, the Act ensures that workers receive timely compensation, reducing their financial burden. It also deters employers from neglecting workplace safety by holding them liable for compensation in case of accidents. This dual approach not only protects workers but also fosters safer work environments.

Before the Act’s introduction, there was no comprehensive legal system to address the financial repercussions of workplace accidents. Workers often faced challenges in securing compensation, as employers denied responsibility or disputes arose over the extent of liability. The Employee’s Compensation Act, 1923, filled this gap by codifying specific rules and liabilities for both employees and employers, offering clarity and fairness[3].

Objectives

The Act has several key objectives:

1. Providing Financial Security to Workers:
   It ensures that workers injured on duty or suffering from occupational diseases receive financial compensation proportional to the severity of their condition.
2. Safeguarding Dependents:
   In cases where workers lose their lives in workplace accidents, the Act guarantees financial support to their dependents, such as spouses, children, and parents.
3. Ensuring Employer Accountability:
   The Act makes it mandatory for employers to maintain safe working conditions and provide compensation in the event of an accident or occupational illness.

These objectives underline the government’s intent to promote social justice and protect vulnerable workers from exploitation or negligence.

Applicability

The Act applies to industries and occupations involving higher risks of accidents and hazardous working conditions.

1. Industries Covered:
   The Act is applicable to all workers employed in industries listed under Schedule II, which includes:
2. Factories, Mines, Railways, Docks, Construction work, Warehouses, Oilfields, Manufacturing processes involving dangerous chemicals

Example: A dock worker unloading cargo is covered under the Act since their job involves significant risks of physical injuries.

• Exclusions:
  • Government Employees: These workers are covered under separate civil service rules.
  • Casual Workers: Those hired for temporary, non-regular work not directly tied to the employer’s business are not covered.
  • Armed Forces Personnel: Military employees are protected under distinct defence laws and schemes.

By limiting its scope to high-risk industries, the Act ensures focused protection for those most vulnerable to workplace hazards.

2.    Essential Features for Getting Compensation

For an employee to successfully claim compensation under the Employee’s Compensation Act, 1923, several conditions must be fulfilled to establish liability. These conditions are designed to determine whether the injury or illness is directly related to the employment and if the employee is eligible for financial compensation.[4]

Employment Relationship

A fundamental requirement for claiming compensation is the existence of an employer-employee relationship. The injured individual must be legally recognized as an employee under the employer. This is crucial to establish that the employer owes a duty of care and is responsible for the worker’s safety.

• Definition of Employee:
  The Act broadly defines an employee as a person engaged in certain categories of hazardous industries or operations specified in Schedule II of the Act. These include workers employed in factories, mines, construction sites, railways, and other specified occupations.
• Contract Workers:
  Workers employed through contractors or subcontractors for specific tasks may also be covered under the Act, provided the work falls under the employer’s supervision or is part of the employer’s trade or business.
• Casual Workers:
  While casual workers are generally not covered, if they are employed for tasks integral to the business (e.g., temporary workers at construction sites), they may be eligible for compensation.

Example:
A labourer hired temporarily to work on a construction project under a contractor gets injured while handling machinery. If the contractor was hired by the primary employer, the latter may also be held liable for compensation under the Act.

Accident Arising Out of and During Employment

To claim compensation, the injury or accident must:

1. Arise Out of Employment:
   The accident should have a direct causal connection with the nature of the employee’s job or workplace activities. For example, injuries sustained while handling machinery, lifting heavy objects, or operating hazardous equipment are considered work-related.[5]

2. Occur During the Course of Employment:
   The injury must occur during the employee’s working hours or while performing duties assigned by the employer.
3. Employer-Provided Transportation:
   Accidents occurring during commuting are generally not covered unless the employer provides transportation or the employee is traveling for work purposes, such as deliveries or meetings.

Examples:

• Covered Accident: A factory worker slips on an oily surface while performing their duties, resulting in a fracture. The employer is liable for compensation.
• Non-Covered Accident: An office worker meets with a road accident on their way to work in their private vehicle. This is not considered work-related, and no compensation is payable.

 Occupational Diseases

Certain illnesses and diseases are recognized under Schedule III of the Act as “occupational diseases.” These are ailments directly linked to the nature of the work and the conditions of the workplace.[6]

• Schedule III Diseases:
  The schedule is divided into two parts:
  • Part A: Diseases for which compensation is payable only if contracted by a specific class of employees. For example, asbestosis (for workers exposed to asbestos).
  • Part B: Diseases that apply to all employment types if exposure to harmful agents is proven.
• Common Occupational Diseases:
  • Silicosis: Common among miners exposed to silica dust.
  • Asbestosis: Seen in factory workers handling asbestos materials.
  • Lead Poisoning: Found in employees working with lead-based products.
  • Noise-Induced Hearing Loss (NIHL): Experienced by workers in high-noise industries like construction or manufacturing.

Example:
A worker in a cement manufacturing plant develops lung disease due to prolonged exposure to dust and chemicals. The worker can claim compensation as the disease is directly linked to their working conditions.

Exclusions

Compensation is not granted in cases where the employee’s actions contribute to their injury. The Act identifies specific scenarios where employers are exempt from liability:

• Willful Disobedience of Safety Protocols:
  If the employee ignores established safety guidelines or acts against explicit instructions, the employer is not liable for any resulting injuries.
  Example: A worker bypasses the safety guard of a machine and sustains injuries. The employer may not be held responsible as the worker disobeyed safety protocols.
• Intoxication During Work:
  If an employee is under the influence of alcohol or drugs while performing their duties and this contributes to the accident, the employer is not liable for compensation.
  Example: A crane operator consumes alcohol during work hours, leading to an accident. The employer can deny liability for compensation.
• Injuries Outside Employment Scope:
  Injuries sustained while the employee is not performing job-related duties or during personal activities unrelated to work are excluded from compensation.

Example
A driver employed by a logistics company meets with an accident while delivering goods and sustains serious injuries.

• If the accident occurred during the delivery and the driver followed all safety protocols, the company is liable to compensate the driver for medical expenses, lost wages, and disabilities, if any.
• If the driver was under the influence of alcohol during the accident, the employer can deny compensation, citing the driver’s negligence.

3.    Types of Injuries

The Employee’s Compensation Act, 1923, meticulously categorizes workplace injuries to ensure that compensation is accurately and fairly determined based on the severity and impact of the injury on the employee’s life and ability to work. Understanding these categories is crucial for both employees seeking compensation and employers fulfilling their legal obligations. The Act delineates four primary types of injuries:

1. Temporary Partial Disability
2. Permanent Partial Disability
3. Permanent Total Disability
4. Death

Each category has specific criteria, implications for compensation, and examples to illustrate real-world applications.

1. Temporary Partial Disability

Temporary Partial Disability (TPD) refers to injuries that temporarily impair an employee’s ability to perform their job but do not result in complete or permanent loss of function. The employee retains some capacity to work during the recovery period, albeit at a reduced efficiency.[7]

Key Characteristics:

• Duration: The disability is not permanent and is expected to improve with time and medical treatment.
• Impact on Work: The employee can resume work after recovery, possibly with temporary modifications or restrictions.
• Compensation: Compensation is provided for the period during which the employee is unable to perform their full duties, covering lost wages and medical expenses.
• Calculation of Compensation: Under Section 4 of the Act, compensation for TPD is typically calculated based on the employee’s average monthly wage and the extent of the disability. The formula generally involves a percentage of the wage corresponding to the severity of the impairment.

Example: A factory worker sustains a wrist injury while operating machinery. Due to the injury, the worker is unable to perform tasks that require fine motor skills for one month. During this period, the worker receives compensation equivalent to a portion of their monthly wages, calculated based on the degree of disability as assessed by a medical professional.

1. Partial Disability

Permanent Partial Disability (PPD) occurs when an employee sustains an injury that results in a permanent loss of function or capacity in a specific part of the body. While the employee can still work, the injury limits their ability to perform certain tasks or requires them to adapt to new methods of working.[8]

Key Characteristics:

• Permanency: The disability is not recoverable, and the loss of function is lasting.
• Impact on Work: The employee may need to adjust their work responsibilities or use assistive devices to continue working.
• Compensation: Compensation reflects the permanent loss of function and its impact on the employee’s earning capacity.
• Calculation of Compensation: Compensation for PPD is determined based on the nature and extent of the disability. Section 4 outlines that the compensation amount is a percentage of the employee’s monthly wage, adjusted by a factor that considers the severity of the disability.

Example: A machinist loses a finger in an accident. While the machinist can continue working, the loss of the finger reduces their efficiency and productivity. The Act mandates compensation that accounts for the diminished capacity to perform the job, calculated as a percentage of the machinist’s monthly wages.

1.  Permanent Total Disability

Permanent Total Disability (PTD) is the most severe category, where an employee is rendered completely incapable of performing any work due to the injury. This disability is both permanent and total, meaning the employee cannot return to any form of employment.[9]

Key Characteristics:

• Complete Incapacity: The employee is unable to engage in any gainful employment permanently.
• Impact on Life: The injury profoundly affects the employee’s ability to lead a normal life, necessitating substantial financial support.
• Compensation: Compensation is significantly higher, reflecting the total loss of earning capacity and the need for lifelong support.
• Calculation of Compensation: Under Section 4, PTD compensation is calculated as a higher percentage of the employee’s monthly wages, multiplied by a factor that accounts for the employee’s age and potential years of earning lost due to the disability.[10]

Example: A worker loses eyesight in an industrial accident, making it impossible to perform any job. The employer is liable to compensate the worker with a substantial sum that considers the total loss of earning capacity and the need for ongoing support.

1. Death

In the unfortunate event that an employee dies due to a workplace accident, the Act mandates that the dependents of the deceased receive financial compensation. This ensures that the family members are not left without support following the loss of the breadwinner.

Key Characteristics:

• Beneficiaries: The compensation is paid to the legal dependents of the deceased, which may include the spouse, children, parents, or other relatives as defined under Section 2(c).
• Purpose: The compensation aims to cover funeral expenses, loss of income, and other financial burdens faced by the dependents.
• Compensation Amount: The amount is determined based on the employee’s monthly wages and other factors outlined in the Act.
• Calculation of Compensation: As per Section 4, the compensation for death is calculated as 50% of the employee’s monthly wages multiplied by an age factor specified in Schedule IV of the Act. This ensures that the dependents receive a fair amount relative to the employee’s earnings and potential future income.[11]

Example: In a mining accident, a worker loses their life. The employer is obligated to compensate the worker’s family with an amount calculated based on the worker’s monthly wages and the relevant age factor, providing financial support during their time of grief and need.

Legal Provisions and Sections

Understanding the legal framework surrounding each type of injury is essential for accurately applying the Act. Here are the relevant sections and provisions that govern the categorization and compensation for each injury type:

• Section 2: Definitions – Provides clear definitions of terms such as “employee,” “employer,” and various types of disabilities.
• Section 3: Employer’s Liability – Outlines the conditions under which an employer is liable to pay compensation.
• Section 4: Compensation – Details the methodology for calculating compensation for different types of injuries, including temporary partial disability, permanent partial disability, permanent total disability, and death.
• Schedule III: Occupational Diseases – Lists diseases recognized under the Act that qualify for compensation if contracted due to employment.
• Schedule IV: Factors for Compensation Calculation – Provides age factors used in calculating compensation amounts based on the employee’s age at the time of injury or death.

Impact on Employers and Employees

Understanding the types of injuries and the corresponding compensation mechanisms under the Act has significant implications for both employers and employees:

For Employers:

• Legal Compliance: Employers must adhere to safety regulations and implement measures to prevent workplace accidents, thereby minimizing liability.
• Financial Planning: Employers need to account for potential compensation payouts in their financial planning and insurance coverage.
• Workplace Safety: Emphasizing safety training and protocols not only protects employees but also reduces the risk of costly compensation claims.

For Employees:

• Awareness of Rights: Employees should be informed about their rights under the Act to ensure they receive appropriate compensation in case of injuries.
• Safety Adherence: Following safety guidelines and protocols helps prevent accidents and strengthens the validity of compensation claims.
• Reporting Mechanisms: Promptly reporting accidents and injuries is crucial for timely compensation and avoiding disputes.

4.    Liability for Compensation

Under the Employee’s Compensation Act, 1923, employers are held accountable for ensuring the safety and well-being of their workers. When accidents or injuries occur during employment, the employer’s liability for compensation is clearly defined by the provisions of the Act. The law establishes when employers are legally bound to compensate and identifies exceptions where liability may not arise.[12]

Circumstances Under Which Employers Are Liable

1. Injury or Accident Arising Out of and During Employment
   Employers are liable if an employee sustains injuries or meets with an accident that occurs during the course of employment and is directly linked to the nature of the job. The phrase “arising out of employment” implies that the injury must be connected to the employee’s work, while “during employment” ensures that the accident occurs within the time and space of the employment.[13]
   1. Example: A warehouse worker is injured when a stack of heavy boxes falls while unloading cargo. The injury arises out of and during employment, making the employer liable to compensate.
2. Occupational Diseases
   If an employee develops an illness due to prolonged exposure to harmful substances or conditions in the workplace, the employer is liable to compensate. Schedule III of the Act lists specific diseases recognized as occupational hazards associated with particular industries.
   1. Example: A coal miner diagnosed with pneumoconiosis, a lung disease caused by coal dust inhalation, is entitled to compensation.
3. Injury During Employer-Provided Transportation
   If the employer provides transportation, and an accident occurs during travel to or from the workplace, liability often extends to such scenarios.
   1. Example: A driver employed by a logistics company suffers an injury in a vehicle accident while on duty. The employer is liable.

Exceptions: When Employers Are Not Liable

The Act also specifies situations where employers are exempt from liability. These exclusions ensure that employers are not unfairly penalized for actions outside their control:

1. Intoxication While Working
   If the employee sustains injuries due to being under the influence of alcohol or drugs, the employer is not responsible for compensation. This exclusion emphasizes that employees have a duty to remain fit and attentive during work hours.
   • Example: A factory worker operating heavy machinery under the influence of alcohol causes an accident and injures themselves. The employer is exempt from liability as intoxication was the primary cause.
2. Wilful Disobedience of Safety Instructions or Protocols
   If an employee deliberately disregards safety rules or warnings provided by the employer, and this leads to an injury, the employer is not liable. The Act protects employers in cases where employees neglect established safety measures.
   • Example: A construction worker removes their safety harness while working at height despite strict instructions. If they fall and sustain injuries, the employer is not responsible for compensation.
3. Injury Outside the Scope of Employment
   If the injury occurs while the employee is engaging in activities unrelated to their job or outside work hours, the employer may not be liable.
   • Example: A security guard gets injured while participating in a personal altercation during work hours that is unrelated to their official duties. The employer is not liable.

Determination of Employer Liability

Employer liability is assessed based on the facts of each case. Factors such as the circumstances of the accident, adherence to safety measures, and the nature of the employee’s duties play a crucial role in determining responsibility. If disputes arise, the matter can be referred to a Commissioner under Section 19 of the Act for resolution.

Illustrative Examples

• Employer is Liable:
  A carpenter operating an electric saw accidentally gets injured due to a malfunction in the machine. The injury arises out of and during employment, and there is no evidence of negligence or intoxication on the carpenter’s part. In this case, the employer is liable to provide compensation.
• Employer is Not Liable:
  The same carpenter ignores clear instructions to use protective gloves and safety goggles while operating the electric saw. If the injury occurs due to this willful disobedience, the employer is not liable for compensation.
• Occupational Disease Example:
  A factory worker handling asbestos materials develops asbestosis after years of exposure. Since asbestosis is listed under Schedule III as an occupational disease, the employer is liable to compensate the worker.

Legal Provisions Governing Liability

The key provisions outlining employer liability are as follows:

• Section 3(1): Establishes employer liability for compensation when an injury or accident arises out of and during employment.
• Section 3(2): Exempts employers from liability in cases where injuries are caused by the employee’s intoxication or willful disobedience of safety protocols.
• Schedule III: Lists recognized occupational diseases for which employers are liable.
• Section 19: Provides for dispute resolution by the Commissioner in cases of disagreements over compensation claims.

5.    Rights and Duties of Employers and Employees

The Employee’s Compensation Act, 1923, outlines the responsibilities and entitlements of both employers and employees to ensure workplace safety and equitable treatment. These rights and duties aim to foster a mutually responsible work environment where the risks of accidents and injuries are minimized.

Rights and Duties of Employers

Employers are primarily responsible for creating a safe and healthy work environment while ensuring compliance with the law. Their rights and duties include:

• Duty to Provide a Safe Workplace
  Employers are obligated to maintain workplace safety standards, provide adequate training, and ensure that workers have access to protective gear and equipment. This duty is especially critical in industries involving hazardous tasks or materials.

Legal Reference:

1. Under Section 3(1) of the Act, employers must ensure that workplace conditions do not lead to injuries arising out of and during employment.
   1. Example: In a construction site, the employer must provide helmets and harnesses. Failure to do so makes the employer liable for accidents caused by such negligence.
2. Duty to Report Accidents
   Employers are required to report accidents that result in death or serious injury to the Commissioner within a prescribed period. Failure to report such incidents can lead to penalties.

Legal Reference:

1. Section 10B of the Act mandates that any accident-causing death or serious injury must be notified to the Commissioner within seven days.
   1. Example: If a factory worker suffers a severe burn while operating a boiler, the employer must immediately report the incident to the relevant authorities.
2. Right to Medical Examination
   Employers have the right to request a medical examination of an injured worker to assess the extent of their injury or illness and verify the legitimacy of the compensation claim.
   Legal Reference:
   1. Section 11 allows employers to arrange for periodic medical check-ups to confirm whether the injury warrants compensation.
   1. Example: If an employee claims total disability after a minor injury, the employer can arrange for a medical evaluation to confirm the claim.

Rights and Duties of Employees

Employees also have responsibilities under the Act to ensure workplace safety and are entitled to specific rights to protect them from harm.

1. Right to Compensation
   Employees injured during the course of employment have the right to claim compensation for injuries, disabilities, or illnesses directly arising from their job.

Compensation applies to:

• Temporary and permanent disabilities (partial or total).
  • Death benefits for the worker’s dependents in case of fatal accidents.
  • Occupational diseases recognized under Schedule III of the Act.

Example: A dock worker develops silicosis due to prolonged exposure to dust while handling cargo. The worker is entitled to compensation under the Act.

2. Right to Seek Medical Aid and Leave
   Employees have the right to seek medical attention without delay following an accident. They are also entitled to take medical leave for recovery, with their wages calculated as per the Act.
3. Duty to Follow Safety Guidelines
   Workers must adhere to the safety protocols established by the employer. This includes wearing protective gear, attending safety training sessions, and following operational instructions for machinery.

Legal Reference:

• Under Section 3(2), if a worker neglects safety protocols, the employer may not be held liable for injuries sustained.

Example: A welder refuses to wear protective goggles despite warnings and suffers an eye injury. In such a case, the employer is not obligated to pay compensation due to the worker’s negligence.

4. Duty to Report Unsafe Conditions
   Employees are expected to notify their employers about hazardous conditions or faulty equipment that could lead to accidents. This proactive role helps in maintaining a safer workplace.

Mutual Responsibilities

• Collaborative Safety Efforts: Employers and employees must work together to ensure a hazard-free environment. While employers provide safety measures, employees must use them appropriately.
• Transparency in Reporting: Both parties should ensure accurate reporting of accidents and injuries to avoid disputes.
• Timely Compensation and Compliance: Employers should promptly provide compensation, and employees must follow due procedures to claim it.

Legal Provisions Supporting Rights and Duties

1. Employer Duties:
   • Section 3(1): Ensures liability for injuries arising out of employment.
   • Section 10B: Mandates reporting of accidents.
2. Employee Rights:
   • Section 4: Outlines compensation calculation and entitlement.
   • Section 8: Ensures fair distribution of compensation to dependents in case of death.
3. Employee Duties:
   • Section 3(2): Exempts employer liability for willful negligence or intoxication.
   • Section 11: Empowers employers to request medical examinations.

Impact of Rights and Duties

• For Employers:
  • Encourages the creation of safe workplaces to avoid liability.
  • Reduces legal disputes by adhering to the Act’s provisions.
• For Employees:
  • Protects workers from exploitation and ensures they receive compensation for genuine claims.
  • Promotes accountability for safety compliance, reducing workplace accidents.

6. Mode of Calculation of Wages Under the Employee’s Compensation Act, 1923

The Employee’s Compensation Act, 1923, provides a structured mechanism for calculating wages to determine the compensation amount payable to employees in case of workplace injuries, disabilities, or death. The method of wage calculation considers various factors, including the nature of the injury, the employee’s age, and their monthly earnings.[14]
Compensation Calculation Formula

The formula for calculating compensation depends on the type of injury or disability. The Act provides detailed formulas under Section 4:

1. In Case of Death

• Compensation = 50% of monthly wages × Relevant factor (based on age)
• Minimum compensation: ₹1,20,000.
• Maximum compensation: Based on wage ceiling (₹15,000).

Example:
A 30-year-old worker earning ₹12,000 per month dies in a workplace accident.

• Relevant factor (from Schedule IV): 207.98.
• Compensation = 50% of ₹12,000 × 207.98 = ₹12,000 × 207.98 = ₹2,49,576.

2. In Case of Permanent Total Disability

• Compensation = 60% of monthly wages × Relevant factor (based on age)
• Minimum compensation: ₹1,40,000.
• Maximum compensation: Based on wage ceiling.

Example:
A 35-year-old factory worker earning ₹14,000 per month becomes permanently disabled.

• Relevant factor (from Schedule IV): 197.37.
• Compensation = 60% of ₹14,000 × 197.37 = ₹8,400 × 197.37 = ₹16,59,908.

3. In Case of Permanent Partial Disability

• Compensation = 60% of monthly wages × Relevant factor × Disability percentage.

Example:
If the same worker loses a finger, with a 15% disability rating:

• Compensation = ₹8,400 × 197.37 × 15% = ₹2,48,986.

4. In Case of Temporary Disability (Partial or Total)

• Compensation = Monthly wage × 50%.
• Paid weekly for the duration of the disability, subject to a maximum limit of 5 years.

Examples of Wage Calculation

1. For a Daily Wage Worker: If a worker earns ₹500 per day for 25 days a month, their monthly wage is ₹12,500. The compensation will be calculated using this figure or the ceiling of ₹15,000, whichever is lower.
2. For a Worker with Variable Wages: If wages fluctuate monthly (e.g., piece-rate workers), the average monthly wage over the preceding 12 months is considered for calculation.
3. For an Apprentice: If an apprentice earning a stipend of ₹8,000 per month is injured, the same formula applies but based on their stipend amount.

Special Considerations

1. Relevant Factor : Schedule IV of the Act lists relevant factors based on the worker’s age. These factors decrease with increasing age, reflecting reduced earning potential as workers age.
2. No Fault Liability: Compensation under the Act is determined regardless of fault, provided the injury arises out of and during employment.
3. Adjustment for Partial Earnings: If an injured worker can perform light duties at reduced pay, compensation is adjusted to make up for the loss in wages.

7.    Case Laws

1. Devidayal Ralyaram v/s Secretary of State[15]
   In the case of Devidayal Ralyaram v/s Secretary of State. It was ruled that the doctrine of added peril was used as defense and the employer was not liable for the compensation.
2. Richmond Adult Community College v McDougall (2008)[16]
   In the case of Richmond Adult Community College v McDougall (2008), M has suffered injuries mentally, psychological disorders as he was offered a job as a database assistant in a college. But when it learned about the medical history and the psychological disability M was suffering from, the college withdrew the offer. M brought a disability discrimination claim from the college. The tribunal accepted that m was suffering from mental impairment but she was not disabled within the meaning of Section 1 of the Disability Discrimination Act, 1995.
3. Lister v Romford Ice and Cold Storage Company Limited[17]
   In Lister v Romford Ice and Cold Storage Company Limited, House of Lords upheld the decision of the Court of Appeal that an employee owed a duty in contract to his employer to take reasonable care in the use of a vehicle at work. In the event that the employer was liable to pay damages arising from the employee’s negligence, the employer could bring a claim to recover that loss from his employee.
4. Moondra & Co. V/s Mst. Bhawani[18]
   In this case, there was a truck driver who was told by his employer to drive a petrol tanker. The driver found a leak in the tank and sought permission from the employer to look for the source of the leakage. While searching he lit a matchstick and the tank caught fire. The driver received burn injuries and died. It was held by the court that the family members of the deceased would be entitled to compensation since the accident took place at the workplace and in the course of employment.
5. S. Palanivel v. Deputy Commissioner of Labour[19]
   In a recent case named S. Palanivel v. Deputy Commissioner of Labour, 31 July 2020, the Madras high court held that employees with wages exceeding the ceiling limit as per employees’ state insurance act, 1948 are not eligible to the Employees state insurance act, 194, such employees are entitled to claim compensation under Employees compensation act, 1923.
6. State of Rajasthan v. Ram Prasad and Another[20] 
   The employee died due to natural lightning while working at the site, the Supreme Court held that there must be a causal connection with the employment, in this case the injury may be due to natural lightning but the employee was working out of course of employment. So, the employer was held liable to pay the compensation.
7. Divisional Manager, United India Insurance Co. Ltd. v. Shanmuga Mudliar T. and others[21]
   A person employed as a bus driver died due to heart failure where he stopped out to have refreshment. His wife claimed for compensation and was awarded by the commissioner and not by the insurance company. The court held that both insurance company along the employer are liable to pay compensation.
8. New India Assurance Co. Ltd. vs Sreedharan[22] 
   The court issued new guidelines to the commissioner in case of the assessment by the medical practitioner. The court held that the employee injured is reported to be in a condition where he cannot work assessed by a qualified medical practitioner cannot be rejected by the commissioner. It means that the loss of earning capacity certified by a qualified medical practitioner cannot be rejected by the commissioner.

8.    Conclusion

The Employee’s Compensation Act, 1923, serves as a vital mechanism to ensure financial security for workers injured during the course of employment or for their dependents in case of death. By laying down clear guidelines for compensation, rights, and duties, the Act promotes workplace accountability and social justice. It not only safeguards employees from economic hardships arising from accidents or occupational diseases but also compels employers to prioritize safety measures and comply with statutory responsibilities.

Key aspects like the classification of injuries, calculation of wages, and mechanisms for compensation distribution highlight the Act’s comprehensive approach to addressing workplace hazards. Furthermore, the balance of rights and duties between employers and employees fosters mutual cooperation, contributing to a safer work environment.

Through its no-fault liability principle and structured compensation framework, the Act provides a fair and impartial resolution to workplace injury disputes, ensuring that vulnerable workers and their families are protected against unforeseen financial crises. Ultimately, the Act underscores the importance of a well-regulated and secure workplace, making it a cornerstone of labour welfare in India.

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[5] Arising Out of and in the Course of Employment, LawBhoomi, https://lawbhoomi.com/arising-out-of-and-in-the-course-of-employment/.(last visited Jan. 4, 2025),

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[7] TPD vs. TTD, Smith Hulsey Law, https://smithhulseylaw.com/gainesville-workers-compensation-lawyer/tpd-vs-ttd/(last visited Jan. 4, 2025)

[8] What is Permanent Partial Disability?, https://www.policybazaar.com/corporate-insurance/articles/what-is-permanent-partial-disability/ (last visited Jan. 4, 2025).

[9] Total Permanent Disability (TPD), Investopedia, https://www.investopedia.com/terms/t/total-permanent-disabilitypd.asp#:~:text=Total%20permanent%20disability%20may%20involve,injury%2C%20coverage%20may%20be%20stopped. (last visited Jan. 4, 2025).

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[15] (AIR) 1937 Sind 288

[16] [2008] ICR 431

[17] [1957] AC 555

[18] AIR 1970 Raj 111

[19] C.M.A.Nos.204 of 2020 & 2523 of 2017

[20] (2001) 1 LLJ 177 (SC)

[21] 2003 LLR 251 (Mad HC)

[22] II(1995)ACC300