Page 57 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes Objectives

After studying this unit, you will be able to:
 Explain the concept of workmen’s compensation
 Discuss the rules in workmen’s compensation
 Get an overview of the defenses of the employer
 Describe the amount of compensation (Section 4)
 Discuss the distribution of compensation (Section 4)
 Get an overview of the enforcement of Act

Introduction

In the previous unit, we dealt with the main aspects regarding Workmen’s Compensation Act.
The Workmen’s Compensation Act (Act VIII of 1923) came into force from 1st July, 1924. It
applies to the whole of India, including the State of Jammu and Kashmir. The Act provides for
the payment of compensation by certain classes of employers to their workmen, for injury by
accidents. The Workmen’s Compensation Act does not apply to factories covered by the Employees
State Insurance Act; the Amendment of 1976. The Workmen’s Compensation (Amendment) Act,
1976, was passed with the object of providing suitable scales of compensation for the higher
wage levels beyond 500. The reason is that all wages have been increased. Before the amendment,
the Act covered workmen whose wages did not exceed 500 per month. 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 the rules relating to the Workmen’s Compensation Act.

3.1 Workmen’s Compensation

Following aspects are included in the Workmen’s Compensation:

3.1.1 Employer’s Liability for Compensation [Section 3]

An employer is liable to pay compensation to a workman:

 For personal injury caused to him by accident, and
 For any occupational disease contracted by him.

Personal Injury

Personal injury includes:
(i) Must have been caused during the course of his employment; and
(ii) Must have been caused by accident arising out of his employment.

An accident alone does not give a workman a right to compensation. To entitle him to
compensation at the hands of the employers the accident must arise out of and in the course of
his employment. The language in Section 3 shows that injury is caused by accident and not ‘by
an accident’. So the injury should be caused by accident by some mishap, unexpected or unforeseen.
The personal injury caused to the worker must have resulted in total or partial disablement of
the workman for a period exceeding three days or it must have resulted in the death of the
worker. The injury should not have been caused by accident which is directly attributable to:
(i) The workman having been under the influence of drink or drugs at the time of the accident;

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