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Mercantile Laws – II




                    Notes          government formulated some proposals for the grant of compensation and circulated them for
                                   opinion. The proposals received general support. As a result, the Workmen’s Compensation Act
                                   was passed in March 1923 and was put into force on July 1, 1924. Subsequently, there were a
                                   number of amendments to the Act. The Act contains 36 sections and four Schedules. The purpose
                                   of this unit is to enable the students to comprehend basic expressions. At the end of this unit you
                                   should be able to understand various concepts regarding the Workmen’s Compensation Act.

                                   2.1 Genesis of the Act


                                   The Workmen’s Compensation Act, 1923 provides for payment of compensation to workmen
                                   and their dependents in case of injury and accident (including  certain occupational disease)
                                   arising out of and in the course of employment and resulting in disablement or death. The Act
                                   applies to railway servants and persons employed in any such capacity as is specified in Schedule
                                   II of the  Act. The  Schedule  II  includes  persons employed in factories, mines, plantations,
                                   mechanically propelled vehicles, construction works and certain other hazardous occupations.
                                   The amount of compensation to be paid depends on the nature of the injury and the average
                                   monthly wages and age  of workmen.  The minimum and maximum  rates of  compensation
                                   payable for death (in such cases it is paid to the dependents of workmen) and for disability have
                                   been fixed and is subject to revision from time to time. A Social Security Division has been set
                                   up under the Ministry of Labour and Employment, which deals with framing of social security
                                   policy for the workers  and implementation of the various social  security schemes. It is  also
                                   responsible for enforcing this Act.




                                     Notes  The Act is  administered by the  State Governments through Commissioners for
                                     Workmen’s Compensation.

                                   2.1.1 Object of the Act

                                   The object of the Act is to impose an obligation upon employers to pay compensation to workers
                                   for accidents arising out of and in the course of employment. The scheme of the Act is not to
                                   compensate the workman in lieu of wages, but to pay compensation for the injury sustained to
                                   him. The Workmen’s Compensation Act, aims to:
                                      Provide workmen and/or their dependents some relief or to consider compensation payable
                                       by an employer to his workmen in case of accidents arising out of and in the course of
                                       employment and causing either death or disablement of workmen as a measure of relief
                                       and social security.

                                      Provide for payment by certain classes of employers to their workmen compensation for
                                       injury by accident.
                                      To enable a workmen to get compensation irrespective of his negligence.

                                      It lays down the various amounts payable in case of an accident, depending upon the type
                                       and extent of injury. The employer now knows the amount of compensation he has to pay
                                       and is saved of many uncertainties to which he was subject before the Act came into force.
                                   2.1.2 Scope and Coverage


                                   The Act extends to the whole of India and applies to any person who is employed, otherwise
                                   than in a clerical capacity, in the railways, factories, mines, plantations, mechanically propelled





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