Q. Explain the terms "Dependents" and "Wages" w.r.t.

WCA, 1923. What do you understand by Workers

Compensation? In what situations does an employer have to
compensate a worker? Explain the phrase "arising out of
and in the course of employment" with reference to WCA,
1923. How far is an employer liable to pay compensation to a
laborer injured in an accident arising out of and in the
course of employment? Since amount of compensation
depends on the nature of suffering, discuss the various
sufferings on the which amount to be paid differs. What are
the remedies available to a workman injured in course of an
employment? How is social security is made available to the
workman under WCA, 1923?

What are the objectives behind Employees' State Insurance
Act 1948 and how does it differ from Workmen's
Compensation Act 1923?

Dependents
Dependents means any of the following relatives of a deceased workman. Section 2 (1) (d) of
WCA 1923 classifies dependents into three classes. In the case of New India Insurance Co Ltd
vs Man Singh and others, 1984, MP HC held that persons in these classes do not have mutually
exclusive claim to compensation. They can simultaneously claim compensation.
1. Widowed mother, widow, minor legitimate or adopted son, unmarried legitimate or
adopted daughter. In this case it is irrelevant whether they are fully or partially dependent
on the earnings of the workman.
2. Legitimate son or daughter if -
1. they are fully dependent on the earnings of the workman.
2. if they are infirm.
3. if they are above 18.
3. The persons in this class must be dependent wholely or partially on the earnings of the
workman to claim compensation.
1. widower
2. a parent other than widowed mother
3. an minor illegitimate son, an illegitimate or legitimate or adopted daughter
if minor and married or if minor and widowed
4. widowed daughter in law
5. a minor brother, an unmarried sister, or widowed sister if minor.
6. a minor child of predeceased son.
7. a minor child of a predeceased daughter if no parent of the child is alive.
8. a paternal grandparent if no parent of the worker is alive.
In the case of Ramji vs Lalit Kumar Bardiya, 1995, MP HC held that the parents have to the
right to claim compensation because the workman was living jointly with them. In joint families
there is a sharing of income and responsibilities. Even if workman did not contribute to the
family fund that was only because he was not being paid by the employer. The family would
have received the benefit of his wages otherwise.

WagesSection 2(1) m defines wages as any benefit or privilege received by a worker from an
employer that can be estimated in money except
1. traveling allowance or value of any concession given on traveling.
2. employer's contribution to PF or pension fund
3. any expenses reimbursed to the workman incurred due to work.
The following benefits are included in calculating wages:
1. Bonus - was held to be wages in the case of Maharastra Sugar Mills Ltd. vs Ashru
Jaiwant AIR 1966 Bom.
2. Maternity benefits payable to a woman after pregnancy.
3. Dearness Allowance
4. Benefits in the form of food, clothing, and accommodation
5. Accommodation
6. Overtime pay
In the case of M/s J C Mills vs Deshraj, AIR 1952, MP HC held that paid leave is not a wage
unless it is stated expressly in the contract of employment that paid leave can be encashed if not
taken.
Workman
Section 2(1) n defines workman as
A railway servant as defined in Railways Act 1989 except those who are permanently
employed in an administrative office.
a master, seaman, or any crewman of a ship.
captain or a crew member of an aircraft.
driver, mechanic, cleaner, helper or employed to any task related to motor vehicles.
a person recruited for work abroad by a company.
a person working for any task as described in schedule 2.
Exception: A member of the armed forces is not a workman.

Examples:
A porter even though not included in schedule II. Narayanan vs Southern Railway -
Kerala 1980
Working for 24 days in a month on daily wages. Hastimal vs Arjunan - Madras 1993.

Workmen's Compensation and Social Security
Success of an industry depends on the productivity of the workers. Thus, minimizing the labor
cost is a prime objective of factory owners. In their zest to reduce the labor cost, safety of the
workers gets neglected thereby increasing the chances of death or injury to the workers. An
increase in the use of complex machinery, the risk for injury to worker had increased. Further,
many times, because of the injury a worker may not be able to work, or in case a worker dies, his
dependents have no way of making ends meet. This in turn gives rise to poverty, hopelessness,
and above all insecurity among other workmen which is detrimental to the industry itself. This is
unacceptable in any civilized country. Thus, to ensure that workers and their dependents get
enough financial security, Workmen's Compensation Act was enacted in 1923. It obligates the
employer to compensate a worker for his loss due to personal injury while on the job.
Appropriate compensation to worker and his dependents prevents unrest among other
workers. This promotes a general well being among the working class. In the absence of such
compensation, the dependents may be forced into begging or illegal activities. Thus, WCA is a
great mechanism to enhance social security.

This act has gone long way to protect workmen for accidental loss of life or limb and to provide
social security to poverty stricken workmen. Although its main objective is to compensate the
workers for injury it has also prompted the employers to implement processes that reduce risk to
the workers.

Main Features of the act:
Modeled on the British pattern and payment is obligatory on all employers whose
employees are entitled to benefit under this act.
The workmen or his dependents can claim compensation if the injury has been caused by
an accident arising out of and in course of employment and if such an accident cannot be
attributed to drug or drinks or willful neglect of safety rules.
Various class of workmen have been specified. Earlier clerical workers and workers
making more than 1600 rs per month were excluded but now the wage limit has been
removed.
The amount of compensation depends, in case of death, the average monthly wages, and
in case of injury, the average monthly wages and the type of injury.
The term wages includes -overtime page, benefits like food, housing, and clothing.
Principles Governing the act:
The purpose is not to give a solatium but to compensate the worker or his dependents for
the actual loss suffered due to an accident.
There must be a casual connection between the injury and the accident, and the accident
and the work done in the course of employment.
The claimant must prove the connection between the injury and the course of work
during employment.
It is not necessary that the worker is actually working or has just finished work.
If the evidence shows a greater probability which satisfies a reasonable man that the work
contributed to the injury, it is enough to prove the claim.
Nature of liability

This is a different kind of liability. It is not same as a liability in torts. It arises due to the
relationship between the worker and employer. An employer is only liable to pay the difference
between the earning capacities of the worker before and after the accident irrespective of the loss
or expenses incurred in treatment of the worker. It is also not dependent upon the neglect or
wrong doing of the employer.

When is an employer liable to pay compensation?

Section 3 says that an employer is liable to pay compensation if a personal injury is caused to the
workman due to an accident arising out of and in the course of employment. Thus, the following
conditions must be satisfied to claim compensation:
1. Personal injury must have been caused to a workman.
2. The personal injury must have been due to an accident.
3. The accident must have arisen out of and in the course of employment.
4. The injury must have resulted in death or the worker must have received total or partial
disability at least for 3 days due to the injury.
The following are the excuses or conditions in which an employer is not liable to pay any
compensation:
1. If the injury did not cause total or partial disablement for more than 3 days.
2. If the injury did not result in death or permanent total disablement and
1. The worker was under the influence of drinks or drugs.
2. The worker willfully disobeyed the orders expressly given or a rule expressly
framed for the safety of the workman.
3. The worker willfully did not wear or removed protective gear as required to work
while having known that such devices exist and were available.
Employer's liability in case of occupational diseases
Section 3 also discusses many diseases that can be caused due to employment in certain
industries. These diseases are divided in 3 parts and are listed in Schedule 3. There are different
rules for the compensation arising due to diseases of different parts.

In the case of Indian News Chronicle vs Mrs Lazarus - Punjab AIR 1961 - it was held that
Injury need not only be physical. Pneumonia caused due to change in temperature is also injury
because of job.
In the case of Sunil Industries vs Ram Chander Pradhan - SC 2001 - It was held that it is not
necessary for a workman to be working in a factory as defined in Factories Act 1948 to claim
compensation.

Arising out of and in the course of Employment

arising out of == suggests the cause of the accident
in the course of == refers to the time, place, and circumstances of the accident

The claimant must prove that the accident has occurred due to the circumstances arising out of
employment. If the risk taken by the workman was only because of the employment, it is a valid
casual connection. If the risk taken was on the worker's own account and not due to employment,
then the employer is not liable. Worker was doing something for the furtherance of the
employer's business and not for his own benefit, it is a valid connection. Worker should not be
doing something which is way out of scope of his employment - doctrine of added peril.

It is not necessary that the accident has taken place within the work place, or even within
working hours but that the employment has some casual relationship with the cause of the
accident. A worker might get hurt while going to quench his thirst or bodily needs, and that
would be a valid ground for compensation. Thus, the activity of the worker may not necessarily
be exactly the same but must be reasonably linked to the work that he is supposed to do.

Trustees Port of Bombay vs Yamunabai - AIR 1952 Bom - A worker was injured by a bomb
placed by somebody in the workplace. HC held that it was arising out of employment. HC
stipulated that if a particular accident would not have happened to a workmen had he not been in
the employment at that time and place, it would be an accident arising out of the employment.

State of Raj vs Ram Prasad - 2001 SC - Worker died due natural lightning. SC held that since
the workman was exposed to lightning only because of the job, employer is liable to pay
compensation.

R B Moondra and Co vs Mst Bhanwari - AIR 1970 Raj - Worker entered a petrol tank to
check leak. He lighted a match and died of burns. HC held that it was in due course of
employment and that he did not take any additional risk because he did not believe there was any
risk since the tank was partially filled with water.

Notional Extension of Employer's premises
Ordinarily, going to and coming home from work place is not considered within the course of
employment. However, there may be reasonable cases where an extension of employer's premise
and time may be applied if while going to or coming from work the worker has to use part of the
employer's facilities.
This was discussed by the House of Lords in the case of St Hellen's Colliery Ltd. vs Hewlston
in 1924. In this case, the worker was not obligated to use employer's train to work. He could use
any other means to commute. So it was held that an accident arising while on the special train
was not in the course of employment.

In the case of Varadarajulu vs Masaya Boyan AIR 1953, Mad. HC held that the worker had
no other means to go to the work place other than to use the employer's lorry. So, accident
happening while in the lorry is in due course of employment.

Willful disobedience of orders or safety devices etc
In order to disown any claim for compensation, it is not enough to show that the workman
neglected the safely measures or disobeyed the orders. The employer must show that such
neglect was willful and the orders that he disobeyed were express. Mere disobedience is not
enough because it could be because or forgetfulness or due to the result of impulse of the
moment.

In the case, of Arya Muni vs Union of India 1965, a workman lost is right eye due to an
accident. The employer claimed that there were instructions to use goggles but the worker did
not use them. However, it was held that since the worker did not know English, it cannot be said
that he understood the message. Also, while the worker was aware of goggles that did not mean
that he understood that they were mandatory. The supervisor also did not tell him so. Thus, the
employer was liable to pay compensation.

Negligence of the workman
In the case of Padam Debi vs Raghunath AIR 1950 Orrisa HC held that once it is established
that an accident happened without any design and in course of employment, the question of
negligence, great or small, is irrelevant.

In the case of Roshan Deen vs Preeti Lal 2002 SC held that liability to pay compensation
cannot be reduced or avoided by any agreement with the worker to that affect.

Alternative Remedies
In case of an injury, a workman has the following alternative remedies
1. he can claim compensation under WCA 1923.
2. he can claim damages in torts.
3. he can claim under the Employer's liability act.
However, a workman is not allowed to put his employer into double jeopardy of proceedings or
compensation as per section 3(5). Thus, he cannot make any claim for compensation under this
act if he has instituted any civil proceeding for the same injury. Similarly, a workman is not
allowed to institute any civil proceeding for damages against the employer or any other person
for the same injury if,
1. he has made a claim for compensation before a commissioner or
2. the amount of compensation has been settled between him and the employer in
accordance with the provisions of this act.
A workman cannot get compensation twice through any means for the same injury.
Section 3(5) uses the word "instituted", which is more specific than that the just filing a claim.
"Instituted" means setting on foot an inquiry. Thus, if a workman has filed a claim and then
withdrawn it before any inquiry was started, it will not be considered as instituted.

Amount of compensation
The amount of compensation for an injury depends on the extent of the loss of earning capacity,
which usually depends on the type of injury and resulting disablement. Section 4 defines detailed
rules for determining the amount of compensation.

a) If the injury results in death, the amount of compensation is equal to the amount of 50% of the
monthly wages of the deceased workman multiplied by a relevant factor or 80,000/- which ever
is more.
b) If the injury results in total permanent disability, the amount of compensation is equal to the
amount of 60% of the monthly wages of the workman multiplied by a relevant factor or 90,000/-
which ever is more.
In these cases, if the monthly wage is more than 4000 Rs then the monthly wage considered in
the calculation will be 4000/-. The relevant factor must be seen in schedule IV and it depends on
the number of years in service.
c) If the injury results in partial permanent disability, the amount of compensation is equal to the
amount determined under permanent total disability multiplied by the percentage of loss of
earning capacity as given in schedule I, if the injury is mentioned in schedule I, or is equal to the
percentage of amount determined under permanent total disability as the percentage of loss of
earning capacity as determined by a qualified medical practitioner.
d) If the injury results in temporary, partial or total, disablement, the workman must be paid half
monthly payments of 25% of his monthly wages for the time he is disabled.

Any payment received by the workman for the treatment of his injury from his employer will not
be considered against the amount of compensation.


Employees' State Insurance Act 1948

While Worker's compensation act was instrumental in providing a secure working environment
to workers to quite an extent, it still lacked the aspect of insurance. Worker's compensation Act
is geared towards providing an assistance in case of an accident causing an injury, that too only
when the accident happens in due course of employment. However, there are several other
factors such as disease and age, which may cause a worker to become unable to do any job. In
such cases, WCA 1923 does not provide any help. Further, no welfare activity is done under
WCA.

Dr Adarkar studied the social conditions of labor in India and made a detailed report on the
problems and solutions. Based on his reports and suggestions made by several prominent experts
of ILO, ESI Act was enacted. The main object of ESIA 1948 is to provide a comprehensive
insurance to the workers. ESIA is the first legislation that looks after the general welfare of the
labor in India. It provides health, disability, and unemployment insurance to workers. The term
welfare is quite wide and includes any activity done for the physical, economical, and intellectual
betterment of the workers and their dependents.

In the first instance this act applies to factories all over India. A state govt. can all extend
provisions of this act to any industry or any class of industries, or establishment in any part of the
state.

Section 3
Under this section, the Central Govt. has formed a corporation by the name of Employees' State
Insurance Corporation, which is a legal entity.

Section 4 defines the constitution of the ESI Corporation. It details the provisions regarding
president, board of directors, managers, etc.

Section 38
This sections specifies that all employees working in factories are covered. In the case of
Hyderabad Asbestos vs. ESI Court AIR 1978, SC held that the term employee is wide enough
to included anybody who works for the factory directly or indirectly.

Section 39
It obligates the factory occupier to contribute to the ESI fund. This contribution includes
Employer's share as well as Employee's share.

Section 46
This section details the benefits that Employees' state insurance provides. This includes sickness,
maternity, disability, medical, dependent, and funeral benefits.