UNIT 1 & 2

According to ILO, Social security is the protection that a society provides to

individuals and households to ensure access to health care and to guarantee income
security, particularly in cases of old age, unemployment, sickness, invalidity, work
injury, maternity or loss of a breadwinner.

Social security policies cover various types of social insurances, such as pension,
health insurance, disability benefit, maternity benefit, and gratuity.

Social Security Policies in India

 The Code on Social Security, 2020: This is a comprehensive law that

consolidates and simplifies nine previous laws related to social security. It covers
employees in both the organized and unorganized sectors, and provides for
retirement pension, provident fund, life and disability insurance, healthcare and
unemployment benefits, sick pay and leaves, and paid parental leaves.
 The Employees’ Provident Fund Organisation (EPFO): This is a statutory
body that administers the Employees’ Provident Fund Scheme, the Employees’
Pension Scheme, and the Employees’ Deposit Linked Insurance Scheme. These
schemes provide retirement pension, provident fund, and life and disability
insurance to employees in the organized sector.
 The Employees’ State Insurance (ESI): This is a self-financing social
security scheme that provides medical care and cash benefits to employees in
case of sickness, maternity, disability, and unemployment. It covers employees in
the organized sector who earn less than a certain threshold.
 The National Pension System (NPS): This is a voluntary, defined contribution
pension scheme that allows individuals to save for their retirement. It is open to
all citizens of India, including those working in the unorganized sector. It offers
multiple investment options and tax benefits.
 The National Social Assistance Programme (NSAP): The NSAP is a social
security and welfare programme that provides support to aged persons, widows,
disabled persons and bereaved families on death of the primary breadwinner,
belonging to below poverty line households.

The Issues and Challenges related to Social Security Policies and their
Implementation
 Lack of adequate budgetary allocation: The National Social Security
Fund was set up for unorganized sector workers with an initial allocation of just
₹1,000 crore, which was far below the estimated requirement of over ₹22,841
crore.
o This shows that the government has not prioritized social security as a key
component of its development agenda and has not allocated sufficient
resources to meet the needs of the vulnerable sections of the society.
 Poor Fund Utilization and Management: The funds allocated for social
security schemes have not been utilized effectively or efficiently. For example,
the CAG audit revealed that ₹1,927 crore accumulated in the National
Social Security Fund since its inception had not been utilized at all.
o Similarly, the cess collected for the provision of social security to
construction workers in Delhi was poorly utilized, with approximately 94%
of the money remaining unspent.
o These examples indicate that there are gaps in the fund management and
monitoring systems, which result in wastage and underutilisation of public
money.
 Corruption and Leakage: Another challenge related to social security policies
and their implementation is corruption and leakage of funds. In the case of
Haryana, where the CAG noted that the direct benefit scheme of the State’s
Social Justice and Empowerment Department had seen the transfer of ₹ 98.96
crore to the accounts of deceased beneficiaries.
o This suggests that there are loopholes in the identification and verification
of beneficiaries, as well as in the delivery mechanism of social security
benefits.
o Moreover, there are instances of fraud, bribery, nepotism, and political
interference in the allocation and distribution of social security funds.
 Inadequate Coverage and Benefits: There is also a persistent issue of
inadequate coverage and benefits of social security schemes in India. For
instance, the contribution by the Centre to old-age pension schemes has
stagnated at ₹200 a month since 2006, which is below the minimum wage
per day.
o Moreover, the eligibility criteria for some of the schemes are very restrictive
and exclude many deserving beneficiaries. For example, the National
Social Assistance Programme focuses on old-age poor individuals with no
 able-bodied earners in their household, who are eligible to earn a monthly
pension of ₹75.
 This leaves out many poor elderly people who may have some
earning members in their household but still face economic
hardship and insecurity.
 Budgetary Cuts: The reduction in budgetary allocations for the Mahatma
Gandhi National Rural Employment Guarantee Act (MGNREGA) suggests
a lack of prioritization for social welfare and rural employment generation.
 Technology and Digital Divide: Many social security schemes are transitioning
to digital platforms for registration and disbursement of benefits. However, a
significant portion of the population, particularly in rural areas, may lack access
to technology and the internet, creating a digital divide that hampers their
participation in these programs.
 Informal Labor Sector: Approximately 91% (or around 475 million) of India’s
workforce works in the informal sector, which often lacks job security, benefits,
and access to formal social security programs.
Steps that can be taken up by India

Universal Social Security: The time has come for India to consolidate its existing
social security schemes/ad hoc measures and provide universal social security to
its entire labor workforce. With jobs becoming increasingly on-demand and hire/fire
policies proliferating, India’s workers are increasingly insecure on the job front.

o To have the fruits of growth trickle down while offering a sense of social
security, policymakers must discard traditional supply-side economic
theories to embrace policies that enable equitable growth.
 Expanding EPFO Contribution: For formal workers, expanding
contributions to the Employees' Provident Fund Organisation
(EPFO) system can provide increased social security. This involves both
employers and employees contributing to the fund.
o Partial Contributions for Informal Workers: Informal workers with
meaningful income, whether self-employed or in informal enterprises, could
make partial contributions.
 Encouraging informal enterprises to formalize and contribute could be
part of this approach.
 Government Support for Vulnerable Workers: Providing government
subsidies or social assistance to those unable to contribute due to unemployment,
 underemployment, or low earnings ensures that everyone has access to basic
social security support.
 Digitization and e-Shram Platform: Investing in digital platforms and data
systems streamlines the registration, verification, delivery, monitoring, and
evaluation of social security services, improving efficiency and transparency.
o The e-Shram platform's expansion and digitization efforts have enabled the
enrollment of millions of workers and extended insurance coverage.
 However, the burden of registration should not solely rest on informal
workers; involving employers could encourage formalization.
 Mandatory Social Security for Employers: Implementing mandatory social
security entitlements for employees, enforced by their employers, would foster
formalization and accountability in employee-employer relationships.
 Pan-India Labour Force Card: Introducing a nationwide labor force card could
simplify the registration process and expand social security coverage beyond the
construction and gig worker sectors.
 Expanding Successful Schemes: Successful schemes like the Building and
Other Construction Workers Schemes could be expanded to cover a broader
range of workers. This might require revisiting certain restrictions, such as the
cooling-off period, for improved benefit portability.
 Addressing Specific Worker Groups: Special attention should be given to
vulnerable worker groups, such as domestic workers and migrants. Expanding
coverage of social services like child care and organizing efforts for domestic
workers could provide them with more stability.
 Strengthening Existing Schemes: The govt may also strengthen existing
schemes, for example the Employees’ Provident Fund (EPF), the Employees’
State Insurance Scheme (ESI), and the National Social Assistance
Programme (NSAP), with budgetary support and expansion of coverage.
 Administrative Simplification: There is a need to simplify the administrative
framework of social security programs. For example, the existing social
security framework for unorganized workers has become complex, with
overlapping areas of authority between the State and Centre, and confusing
definitions being used such as between a platform worker, an unorganized
worker and someone who is self-employed.
 Raising Awareness: There’s a need for a more significant push to raise
awareness about social security to ensure that more workers are aware of the
available benefits. Organizations such as the Self-Employed Women’s
 Association (SEWA) which run Shakti Kendras (worker facilitation
centers), may be funded to run campaigns (especially for women) to provide
greater information on social security rights, along with services and schemes
that the government offers.
India learn from other countries

 Brazil: Brazil has a comprehensive and generous social security system that
covers more than 90% of the population and provides income replacement for
workers and their families in various situations.
o India can learn from Brazil’s experience in expanding the coverage and
scope of its social security system, as well as implementing reforms to
ensure its fiscal sustainability and efficiency.
 Germany: Germany has a well-developed social security system that is based on
the principle of social insurance, where workers and employers contribute to
various schemes that provide pensions, health care, unemployment benefits,
long-term care, and family allowances.
o India can learn from Germany’s model of social insurance, which is widely
accepted and trusted by the public and provides adequate protection and
incentives for workers.
 Singapore: Singapore has a unique social security system that is based on the
principle of individual savings, where workers are required to save a portion of
their income in a central provident fund that can be used for retirement, housing,
health care, and education.
o India can learn from Singapore’s approach of promoting personal
responsibility and asset accumulation, as well as providing flexibility and
choice for workers to manage their savings.
Conclusion

There is a need for more robust policy implementation, proper allocation of funds,
transparent utilization of resources, and efficient oversight mechanisms. Without
addressing these issues, the intended beneficiaries of social security programs may
continue to face challenges and inadequate support. The Code on Social Security
proposed by the government in 2020 is a positive step towards providing a statutory
framework for social security for various categories of workers, including those in the
gig economy and informal sectors.

1. examine the scheme of adjudication of disputes and claims under the

employee state insurance act 1948.
Employees’ State Insurance
Under the ministry of labour and employment, the government of India an autonomous
corporation was set up by ESI act which is known as employee
state insurance corporation and launched a scheme un employee state insurance act
1948.

Employee State Insurance

The employee state insurance is one type of an integrated social safeguard system having
multidimensional and customized to offer security and protection to the employees of
India and respective states. The said act was introduced as E.S.I ACT 1948.

This act basically focuses on the safety of employees by providing help in case of
sickness, death in the work field, injury, maternity, etc. in this scheme complete medical
care for the insured person along with dependents will be benefitted.

Employee State Insurance Guidelines

 For all employees earning 21000 or less than that per month as wages, the
employer contributes 4.75% and the employee contributes 1.75% making it total
share of 6.75%. That means both are liable under ESIS.

 According to the rules and regulation, all factories are mandatorily liable to
register their employees under ESI. all govt establishments as well and shops or
offices employing 20 persons or more will register themselves.

 But as everything has exemptions, this law has certain exemptions. They are
seasonal factories activities like cotton ginning, jute pressing, decoration of
grounds or factories engaging workers not more than seven months in a year are
exempted from registering under ESI.
Employee State Insurance Features

 It includes all medical care facilities for the person who is insured as well as
dependent members of his/her family from day one.

 It includes medical coverage for a certain specific illness which includes cash
benefits. This covers 70% of the employee’s wages until 91 days. For this benefit
to avail, the workers required to contribute at least 78 days for a period of 6
months.
 There is a special benefit for women employees regarding maternity leave or for
medical problem in pregnancy etc. For maternity leave, there is a period of 26
weeks which can be extended by one month. But there is no change in wage slab.
They will get at the rate of full wage to contribution for 70 days.

 For an unemployed person, this scheme is also applicable. They are also eligible
for being insured for at least three years, provided they will disclose details
regarding their previous place of work and retrenchment letter. In such case, a
monthly payment of 50%of their wage in cash for a maximum of 2 years can be
availed by the employees.

Employee State Insurance Instruction

 A new employer must be informed of the ESI registration number if the insurer
switches from one company to another company. This process will make insurer
eligible for getting the same benefits which were given in the previous company, if
and when needed.

 For the social security, personal identification card or named as Pehchan card
serves as a channel towards this scheme. it has to be prevented from getting
damaged or lost by the cardholder.

 In case the card is lost, then the insurer and the dependent family members who
are covered under the scheme have to immediately report to their branch office or
dispensary.

 In case an employee got transferred to other state or relocate for professional

reasons, he/she has to get the form 105 signed by their current and existing
employer to remain eligible for the benefits under ESI scheme in another location.

ADJUDICATION OF DISPUTES AND CLAIMS CONSTITUTION OF

EMPLOYEES' INSURANCE COURT.

[Sec 74]

 The Court shall consist of such number of Judges as the State Government may
think fit.  Any person who is or has been a judicial officer or is a legal practitioner of
5 years' standing shall be qualified to be a Judge of the Employees' Insurance Court.

 The State Government may appoint the same Court for two or more local areas or 2
or more Courts for the same local area.
 Where more than one Court has been appointed for the same local area, the State
Government may by general or special order regulate the distribution of business
between them.

[Sec 75]. MATTERS TO BE DECIDED BY EMPLOYEES' INSURANCE

COURT.

If any question or dispute arises as to-

 Payment of pay the employee's contribution

 Payment of benefits and duration.

 the rate of contribution payable by a principal employer in respect of any employee

 dispute between a principal employer and the Corporation, or between a principal

employer and an immediate employer or between a person and the Corporation or
between an employee and a principal or immediate employer,

[Section 75 (2A)] The following claims shall be decided by the Employees' Insurance
Court, namely:-

 claim for the recovery of contributions from the principal employer;

 claim by a principal employer to recover contributions from any immediate

employer;

[Section 77 (1A)] Every such application shall be made within a period of three years
from the date on which the cause of action arose.

[Section 82 (3)] Appeal can be made to high court after the ESI courts. The period of
limitation for an appeal to the high court of that state should be within 60 days when
there is question law.

CHAPTER VII: PENALTIES

SECTION REASON PENALTY

84  Whoever, for the purpose of causing any punishable with imprisonment for
increase in payment a term which may extend to 6
months, or with fine not
 Whoever, for the purpose of causing any exceeding 2000/- rupees, or with
 payment or benefit to be made where no both.
payment
PROVIDED that where an
 Whoever, for the purpose of avoiding any insured person is convicted under
payment to be made by himself under this Act this Section, he shall not be
entitled for any cash benefit under
 Whoever, enabling any other person to this Act for such period as may be
avoid any such payment, knowingly makes prescribed by the Central
Government.
 Whoever, made any false statement or false
representation

85 fails to pay any contribution which under this imprisonment for a term which
Act he is liable to pay may extend to 3 years but which
shall not be less than one year,

in case of failure to pay the employee's fine of 10,000/- rupees and

contribution which has been deducted by him imprisonment which shall not be
from the employee's wages less than six months

 fails or refuses to submit any return required Imprisonment for a term which
by the regulations, or makes a false return, may extend to one year or with
fine which may extend to 4000/-
 deducts or attempts to deduct from the rupees, or with both.
wages of an employee the whole or any part
of the employer's contribution,

 obstructs any Inspector or other official of

the Corporation in the discharge of his duties,

85A Repeated failure by the employer to pay any Imprisonment for a term which
contribution which under this Act he is liable may extend to 5 years but which
to pay, shall not be less than 2 years and
shall also be liable to fine of
25,000/- thousand rupees.

POWER OF STATE GOVERNMENT TO MAKE RULES. [Section 96]

The State Government may, after consultation with the Corporation, subject to the
condition of previous publication, make rules not inconsistent with this Act in regard
to all or any of the following matters, namely-
 the constitution of Employees' Insurance Courts, the qualifications of persons who
may be appointed Judges thereof, and the conditions of service of such Judges;

 the procedure to be followed in proceedings before such Courts and the execution of
orders made by such Courts; the fee payable in respect of applications made to the
Employees' Insurance Court, the costs incidental to the proceedings in such Court, the
form in which applications should be made to it and the particulars to be specified in
such applications;

 the establishment of hospitals, dispensaries and other institutions, the allotment of

insured persons or their families to any such hospital, dispensary or other institution;

 the scale of medical benefit which shall be provided at any hospital, clinic,
dispensary or institution, the keeping of medical records and the furnishing of
statistical returns; the nature and extent of the staff, equipment and medicines that
shall be provided at such hospitals, dispensaries and institutions;

 the conditions of service of the staff employed at such hospitals, dispensaries and
institutions; and

 any other matter which is required or allowed by this Act to be prescribed by the
State Government.

2. Evaluate the scheme provided under Employee Provident Funds and

miscellaneous provision act, 1952

The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 applies to every
factory engaged in any industry specified in Schedule - I of the Act and in which 20 or more
persons are employed and to other establishments like road motor transport establishments,
hotels, restaurant cinema theatres, hospitals etc. as notified by Central Government in the
Official Gazette. The Act provides for the institution of compulsory Provident Fund, Pension
Fund and Deposit Linked insurance Fund for the benefit of the employees in factories and
other establishments The Act provides for three schemes viz.,

1. Employees' Provident Fund Scheme, 1952

2. Employees' Pension Scheme, 1995
3. Employees' Deposit Linked Insurance Scheme, 1976

EMPLOYEES' PROVIDENT FUND SCHEME, 1952

 An employee who is in receipt of pay upto Rs.6500/- p.m. is eligible for membership
of the Fund from the very date of joining an establishment.
  The present rate of contribution is 12 percent/10 percent of the monthly wages of the
subscribers.
 The funds of the EPFO are invested as per the pattern of investment notified by the
Govt. of India from time to time. Upto 31.3.1995, the Reserve Bank of India was
managing the investment portfolio for the EPFO. From 1.4.1995, the State Bank of
India has been appointed the portfolio manager.
 The investment decisions are taken with maximum emphasis on safety & security of
the fund, optimum return, sound commercial judgement and ensuring that funds don't
remain idle.
 The rate of interest on EPF accumulations is decided every year keeping in view the
projected income and the interest liability of the EPFO for that financial year.

EMPLOYEES' PENSION SCHEME, 1995

 Although Provident Fund was an effective social protection measure for old age and
survivorship benefit, in the event of premature death of an employee, the
accumulations in the P.F was not found to be sufficient to render adequate and long
term protection to his family.
 This led to the introduction of employees' Family Scheme, 1971 with effect from
1.3.1971. Under this scheme, family members, of the employees who died in harness,
were given monthly family pension.
 A portion of the contribution to provident fund of the employee and the employer,
namely, 1-1/6 % of wages was diverted to this fund and central government also
contributed 1-1/6% of the wages.
 The benefit under this scheme was immensely improved with introduction of
Employees' Pension Scheme, 1995 with effect from 16.11.1995, which was conceived
as 'Benefit-defined-social insurance-scheme' formulated on the basis of actuarial
principles.
 This scheme aims at providing economic sustenance during old age and survivorship
coverage to the member and his family. This scheme is funded by diverting 8.33% of
the wages of the employees out of the employers' contributions to the Provident Fund.
 The Central Government continues to contribute at the rate of 1-1/6% of the wages of
the employees. The benefits under the old scheme remained protected and continued
in the EPS, 1995.

EMPLOYEES' DEPOSIT LINKED INSURANCE SCHEME, 1976

  The third scheme, namely Employees' Deposit Linked Insurance Scheme, 1976 came
into force with effect from 1.8.1976.
 The scheme is supported by a nominal contribution by the employers i.e. 0.5% of the
pay of the employee.
 No contribution is payable by the employee.
 On the death of a member while in service, the person entitled to receive the provident
fund accumulation is paid and additional amount equal to the average balance in the
provident fund account of the deceased during the preceding 12 months.
 At the inception of the scheme, maximum amount of benefit payable was Rs.10,000/-.
This benefit has been progressively enhanced to Rs.25,000/- with effect from
1.3.1990, to Rs.35,000/- with effect from 1.4.1993 and to Rs.60,000/- from 24.6.2000,
subject to certain conditions.
 Complaints received from workers over settlement of EPF dues are forwarded to the
EPF Office for speedy redressal.
 The Labour Commissionerate also co-ordinates with the EPF Office to ensure that the
Public Sector Undertakings who should be model employers are voluntary
discharging their dues to the workers and EPF Organisation.
 A Regional Committee of Employees' Provident Fund has been constituted for the
Union Territory of Pondicherry with Secretary (Labour) as Chairman so as to tender
advice on all matters connected with the administration of the EPF Scheme.

4.Examine the conditions governing payment of compensation under the

employee compensation Act, 1923 with the help of decided case laws.

Features of the Employees Compensation Act, 1923

1. Comprehensive Coverage: The Act encompasses a wide range of scenarios,
including occupational diseases and accidents, ensuring a broad scope of protection
for employees.
2. Fair Compensation: It establishes a framework for fair compensation, extending
benefits to widows, legitimate children, widowed mothers, widowers, and dependent
family members in case of an employee’s demise.
3. Principle of Vicarious Liability: The Act follows the principle of vicarious
liability, holding employers responsible for compensation regardless of their
negligence and ensuring relief for injured employees.
4. Doctrine of Added Peril: The doctrine absolves employers of liability when
employees voluntarily engage in activities beyond their duty, posing additional risks.
5. Adjudication Process: Commissioners handle the adjudication of compensation,
calculating amounts from the date of the accident and ensuring a fair and timely
process.
6. Special Provisions: Special provisions cater to specific sectors like maritime and
aviation, addressing the unique needs of these industries.
Powers of Commissioners under Employees’ Compensation Act, 1923
1. Awarding Compensation: Commissioners have the power to award
compensation beyond claimed amounts if the facts warrant such an award.
2. Appearance of Parties: Legal practitioners, insurance company officials, and
authorized representatives may appear before the commissioner on behalf of the
parties involved.
3. Recording of Evidence: The commissioner makes a written memorandum of the
evidence provided during the examination, which becomes part of the official
record.
4. Appeals to the High Court: Parties dissatisfied with commissioner decisions
may appeal to the High Court under specified circumstances. The scope for
appealing against commissioner decisions is limited to substantial questions of law.
5. Condonation of Delay: Condonation of delay allows for the filing of delayed
appeals by employees dissatisfied with court decisions.
6. Withholding of Payments and Recovery: Commissioners may withhold the
payment of any deposited amounts when employers appeal under specific conditions
and as directed by the High Court.
7. Recovery: Commissioners have the authority to recover any amount payable as
arrears of land revenue, and they are deemed public officers in cases involving
compensation agreements.

In addition to the above powers and procedures, commissioners have certain other
Rule making powers as well, such as:
 Power of the State Government to make rules: The state government has rule-
making power for various aspects of the act, including intervals for application
submission, medical examinations, and procedures for case disposal.
 Publication of Rules: Rules made by the state government are subject to
publication conditions and have an effect once published in the Official Gazette.
 Rules made by the Central Government: Rules made by the Central
Government are laid before each house of parliament, and modifications can be
made within thirty days.
 Transfer of Money to Foreign Countries: The Central Government may make
rules for the transfer of compensation money to foreign countries, subject to
certain conditions and consent requirements.

Advantages under Employees’ Compensation Act, 1923

1. Comprehensive Coverage: The act covers a wide range of scenarios, from
occupational diseases to accidents, ensuring comprehensive protection for
employees.
2. Fair Compensation: Employees, including widows, children, and dependent
family members, are entitled to fair compensation, even in cases of employer
negligence.
3. Adjudication Process: The act establishes a fair and timely adjudication process
through commissioners, ensuring efficient resolution of compensation claims.
4. Liability Clarity: Employers benefit from clear guidelines on liability,
contributing to a safer work environment and reduced legal ambiguity.
5. Special Provisions: Special provisions cater to diverse sectors like maritime and
aviation, addressing specific needs and ensuring equitable compensation.

Disadvantages under Employees’ Compensation Act, 1923

1. Legal Vulnerability: Without an established compensation policy, employers
expose themselves to legal vulnerabilities in case of workplace injuries, potentially
facing litigation and financial consequences.
2. Employee Dissatisfaction: Lack of a compensation policy may lead to
dissatisfaction among employees, impacting morale and productivity.
3. Unclear Liability: In the absence of a defined policy, determining liability for
workplace injuries becomes ambiguous, potentially leading to disputes and
prolonged legal battles.
4. Financial Risks: Employers may face financial risks without the protection of an
insurance-backed compensation policy, particularly in high-risk industries.
5. Inconsistent Practices: The absence of a standardized policy may result in
inconsistent practices, making it challenging for employers to handle compensation
claims uniformly.

The Liability of the Employer for Compensation under the Workmen’s

Compensation Act (WCA)
The WCA, enacted in 1923, imposes a strict liability on employers to compensate
their workmen for injuries arising out of and in the course of their employment. This
means that the employer is liable regardless of fault, unless one of the specific
exceptions applies. However, there are certain conditions under which an employer
may not be liable to pay compensation:
Conditions When Employer is Not Liable
Minor injuries: If the injury results in temporary disablement for less than three days,
the employer is not liable.
Employee misconduct: If the injury is caused by the workman’s drunkenness, willful
disobedience of safety rules, or deliberate removal of safety devices, the employer is
not liable.
Pre-existing disease: If the injury aggravates a pre-existing disease, the employer is
only liable for the extent to which the injury worsened the condition.
Third-party fault: If the injury is caused by the negligence of a third party, the
employer is not liable unless they are also negligent.
Calculation of Compensation
The amount of compensation payable under the WCA depends on the nature and
severity of the injury. It can be calculated as follows:
Death: 50% of the monthly wages of the deceased multiplied by a relevant factor
(currently, a minimum of Rs. 1,20,000).
Permanent total disablement: 60% of the monthly wages of the workman.
Permanent partial disablement: A percentage of the monthly wages based on the
nature of the disability (specified in Schedule I of the Act).
Temporary disablement: Up to 25% of the monthly wages for the period of
disablement.

Conditions governing payment of compensation under the employee

compensation Act, 1923
The employer's accountability to compensate an employee arises under section 3 of
the Employees Compensation Act, 1923.
Under this section, five prerequisites are enumerated upon satisfying which the
employer shall be accountable to pay compensation to an employee, which are as
following:
1) If a personal injury' has been sustained by an employee:
If an employee while functioning in an establishment has sustained any personal
injury (whether physical or phycological) by an accident, then employer shall be liable
to compensate such an employee. Personal injury has not been defined under the Act.
However, a personal injury is an injury caused to a person's physique, intellect or
reputation due to a person's negligence, remissness or illegitimate conduct.
A personal injury does not include an injury to someone's personal property. Common
examples of such an injury may include motor vehicle accidents, plane and railway
accidents, accidents at employment, product defects, medical accidents, libel and
slander etc. According to this Act, personal injury also includes occupational diseases.
The case of Indian News Chronicle vs. Mrs. Lazarus, is a celebrated case in which
the Court defined the scope of personal injury caused to any workman while working
in an establishment. In this case, the workmen went to a cooling room from a heating
room and contracted pneumonia and he died within a span of five days. The Court in
this case held that the workmen died due to a personal injury. A personal injury
includes a physical injury.

2) If such a personal injury has been inflicted as a result of an accident:

In order to demand compensation from an employer, an employee must substantiate
that those personal injuries have been resulted out of an accident while executing his
indispensable duties.
The term accident also has not been made clear under the Act. An accident, in normal
parlance, can mean as an unexpected event that results in harm to some person. An
accident cannot be predicted as to enable any person to save themselves from any kind
of harm or injury. Likewise, an employee cannot predict any accident which resulted
in an injury to him. Therefore, it is a responsibility of an employer as a principle to
render any compensation to an employee in case of such an accident.
3) If such an accident has arisen out of' and in the course of an employment:
The most essential requirement of getting compensation from an employer is to
substantiate that the accident has been caused out of the employment' or during the
course of the employment', respectively. It does not suffice that an accident had been
caused to an employee.

It is equally necessary to prove that such an accident resulted out of the employment
or in the course of such employment. An employer is not entitled to compensate an
employee on the basis of any accident alone. It might be the circumstance where the
injury has not been resulted during the course of the employment. The onus of proving
that the harm is caused out of or during the course of the employment is only upon the
employee in this situation and not the employer. The employee has to substantiate his
case in front of a court.
It is necessary in the current situation to understand the meaning of the expressions,
arising out of the employment' and in the course of employment:
a. Arising out of employment
The expression arising out of employment refer to those incidents where there
exists a relationship between the conditions under which the work is required to be
performed and the resulting injury. In simple words, there must be a connection
between the harm and work the deceased was doing. The accident must have resulted
out of that work only. It is also necessary to satisfy a court that if such a person has
not been doing that work, the injury will not cause to him. If both the conditions are
satisfied, the court will grant the employee the right to claim compensation from the
employer.

In the case of State of Rajasthan vs. Ram Prasad and another, the death of the
employee was caused due to natural lightening struck at him. The court held that the
employee shall be liable to receive compensation as he satisfied the dual conditions:
1. The lightening struck at the deceased when he was in employment of the
employer; and
2.If the deceased had not been on the work place where the lightening struck at him,
the deceased would not have died.
b. In the course of employment
To make an employer liable to pay compensation, the workmen has to substantiate
that the work performed was identical with the time and place of the employment. In
other words, the employee has to prove that the work was done during the working
hours of the employee and at the place of the employer. The employee also has to
prove that he was executing his duties for the benefits of the employer.
In the case of National Iron and Steel Company Limited vs Manorama, a boy was
working on a tea shop which was situation outside the factory premises. His duty was
to provide tea to all the workers placed in the factory. The boy while coming out of
the premises passed a violent mob of workers. The police, in order to protect
themselves from the attack of workers, fired on the mob which also hit the boy and he
died instantly. The court held that the deceased shall be liable to compensation as he
was working during his working hours at the place of premises and also, he was
executing his duties for his employer.

4) If such an injury resulted in permanent or partial disablement of an employee

for a period exceeding three days:
If an injury caused to an employee from the accident results in his permanent or
partial disablement for a period in excess of three days, then the employer shall be
liable to render compensation to such employee.
The permanent or partial disablement has been defined under the Act. Partial
disablement can be both temporary and permanent. When the disablement is of
temporary in nature, such disablement reduces the earning capacity of the employee in
any employment in which he was engaged at the time the accident took place and
when the disablement is permanent, it reduces the earning capacity in every
employment he could engage when the accident took place.
5) If such an accident resulted in death of an employee:
The last requirement which will enable the heirs of employee to receive compensation
is to prove that such accident resulted in death of the employee. If it is proved in front
of the court that the death was caused by an accident occurred out of or in the course
of the employment, then the heirs of the employee shall be entitled to receive
compensation.

EXCEPTIONS TO THE ABOVE PRE-REQUISITES:

The Act, along with the prerequisites, also listed few exceptions in order to safeguard
the employer from paying compensation which are as following:
 The injury which resulted from an accident does not result in total or partial
disablement of an employee for period in excess of three days;
 The injury does not result in death of the employee;
 The employee, at the time of accident, was drunk;
 The employee intentionally disobeyed any rules or regulations framed for the
safety of employees; and
 The employee intentionally disregarded or removed the safety grounds framed
for their safety.

LIABILITY OF AN EMPLOYER IN CASE OF AN OCCUPATIONAL

DISEASE

The schedule 3 attached to the Act describes some occupational diseases in three parts
(A, B and C) peculiar to their employment.
If a case of an employee falls under Schedule 3, then the employer shall be liable to
pay compensation to the employee.
These occupational diseases mentioned in the schedule connotes that they shall
deemed to be injury by accident when any question appear before the court regarding
the liability of the employer as against the employee.
Part A of Schedule 3: Where the employee is in the employment specified under Part
A contracts any occupational disease, he shall be liable to receive compensation from
the employer.

Part B of Schedule 3: Where the employee is in the employment specified in Part B

for a duration of not less than six months, contracts any occupational disease, which
arose out of the employment, he shall be liable to receive compensation. (Single
employer)

Part C of Schedule 3: Where the employee is in the employment specified under Part
C under more than one employer, for a period as may be specified by Central
government, contracts any occupational disease, arising out of or during the course of
employment, he shall be liable to receive compensation from the employer.

Liability of employer after cessation of employment by an employee

Part A of Schedule 3: If an employee, after he left the employment, contracts any
disease specified in Part A, he shall not be liable to receive compensation from the
employer.

Part B of Schedule 3: The following conditions has to be satisfied by the employee in

order to receive compensation after he left the employment:
(a) The employee has been in employment under an employer for not less than six
months;
(b) The employee after he left the employment contracts any disease specified in Part
B; and
(c) The disease arose out of the employment.
Part C of Schedule 3: The following conditions has to be satisfied in order to receive
compensation after he left the employment:
(a) The employee has been in employment under one or more employers for a period
as may be specified by Central government;
(b) The employee after he left the employment contracts any disease specified in Part
C:
(c) The disease arose out of the employment.