WORKMEN COMPENSATION ACT

The Workmen Compensation Act was introduced in India to help the employees or the workers in industries to get the repayment in terms of money if they underwent an accident while working in the industry with dangerous machineries. It also includes compensation for death.

This act was passed in 1923. The number of fatal cases in India were increasing in the late 19th and early 20th century. Before the Act was passed, the workers who faced the injuries while working in the industry often had to go to the court and file a case to get the compensation. But since the number of cases were on the rise as the years went by and there was no system, the act had to be passed so that the workers don’t have to go through the complex processes of going into the court asking for relief.

Earlier it was observed that the industry took care of the machineries and spent capital for their maintenance etc. but since the machinery depended on the labours and they had to be employed to get the factory work done. The question arose – Why not spend the money on their care and wellbeing as well?

Aspects of the workmen compensation act 

There are basically two aspects which this act includes –

  1. Theory of least cost. 
  2. The production cost shall have the cost of blood and workmen included. 

This act covers all the industries, factories, plantations, mines, transport establishments, railways, ships, circuses, construction work and any other potentially dangerous occupations. Schedule II of the Act includes the list of all the industries in detail that are covered in this act. It is applicable to all states of India except for Jammu and Kashmir. There is no wage limit for the coverage under the act and the compensation depends on the complexity of the injury. 

Below are some of the features of Workmen Compensation Act 

  1. Extent and application – This act is applicable throughout India except Jammu and Kashmir. It is also applicable to the workmen recruited by companies registered in India and sent abroad for work.
  2. Contingencies in which compensation is payable – The compensation to the worker is payable in case of a temporary or permanent disablement or death as a result of employment injury.
  3. Occupational diseases – This includes the diseases which have been contracted due to specifically working in that industry. For example, a person working in a chemical industry undergoes a skin related disease then he is eligible for compensation. Schedule II of the Act includes all the occupational diseases for which a worker is eligible to get compensation. 
  4. Administration – This rule making power was with the Central Government, however, some of the state governments have set their own rules.
  5. Settlement of claims under the act – There are three categories under which claims can be made
  •  uncontested cases 
  •  disputed cases 
  •  fatal cases

 

6. Extension of the provisions of the workmen compensation act to the hazardous employment in agriculture – This includes working in the jungle, reclaiming land, forest operations, working and maintenance of borewell, spraying of insecticides and pesticides in the farms, working and repair of agricultural machinery like bulldozers, tractors etc.

7. Last amendment of the act in 1995 –  The provisions of the workmen compensation act, 1923 were reviewed in 1974 and 1989 by the law commission of India and new changes were implemented in 1995. Some of the changes were – 

  • Increment in the minimum rate of compensation for death or total disablement from Rs. 20,000 and Rs. 24,000 to Rs. 60,000 and Rs. 50,000 respectively.
  • The amount of compensation was linked to the age of the worker, that is if the worker is young the compensation is higher compared to the old worker.
  • New employment was added to Schedule II and three new occupational diseases were added to Schedule III.

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