This article is about how much compensation is given under what conditions,
who is liable to pay compensation and more. Every employer must safeguard his
employee especially when employees face death or disability in the course of
conducting their duty. the workmen's compensation act 1923 was formed to provide
compensation to workers who faced accidental death or injuries in the course of
employment liable to pay compensation.
The workmen's compensation act came into force on 1st July 1924. the workmen's
compensation act is known as the employee compensation act. it was the first
legislation on labour law. This act has a total of 36 sections and 4 schedules.
section 3 is the most important section of the act and it has five sub-sections.
The workmen's compensation act, of 1923 was majorly formed to provide
compensation to workmen at the time of an accident. this act mentions that it is
the duty and responsibility of the employer to include the welfare of the
workers when an injury is the result of the employment in the same way the
employer has reserved the right of making profits.
The workmen's compensation act, of 1923 provided compensation by certain classes
of employers to their workmen for injury by accident in their establishment. the
term arising during the course and out of employment is prescribed under section
3 of the workmen's compensation act 1923.
If an employee was injured, or the injury resulted in death because of any
employment in which he was engaged, he, or those representing him or dependent
on him, could recover compensation for such injury or death, only when the same
could be attributed to the negligence of the employer.
Hence, it was thought necessary that there should be legislation which would
secure workmen and their dependents against becoming objects of charity by
making provision for reasonable compensation for all such calamities as are
incidental to the employment (1).
An employer includes any body of persons whether incorporated or not and any
managing agent of an employer and the legal representative of a deceased
employer, when the services of an employee are temporarily lent or let on hire
to another person by the person with whom the employee has entered into a
contract of service or apprenticeship, means such other person while the
employee is working for him. An employer is liable to pay compensation to an
employee for personal injury caused to him by accident as well as for any
occupational disease contracted by him.
The act aims to provide workmen and their dependents some relief or compensation
in case of accidents arising out of and in the course of employment and causing
either death or disablement (partial or total) of workmen.
SEC 3: Employer's Liability for Compensation:
- f personal injury is caused to a workman by accident arising out of and
in the course of his employment, his employer shall be liable to pay
compensation by the provisions of this chapter: provided that the employer
shall not be so liable:
- In respect of any injury which does not result in the total or partial
disablement of the workman for a period exceeding three days;
- In respect of any injury, not resulting in death, caused by an accident
which is directly attributable to:
- The workman having been at the time thereof under the influence of drink
or drugs, or
- the willful removal or disregard by the workman of any safety guard or
other device which he knew to have been provided to secure the safety of
- If a workman employed in any employment specified in Part A of schedule
III contracts any disease specified therein as an occupational disease
peculiar to that employment, or if a workman, whilst in the service of an
employer in whose service he has been employed for a continuous period of
not less than six months (which period shall not include a period of service
under any other employer in the same kind of employment) in any employment
specified in Part B of schedule III.
Contracts any disease specified therein as an occupational disease peculiar
to that employment, or if a workman whilst in the service of one or more
employers in any employment specified in Part C of schedule III for such
continuous period as the central government may specify in respect of each
such employment, contracts any disease specified therein as an occupational
disease peculiar to that employment, the contracting of the disease shall be
deemed to be an injury by accident within the meaning of this section and,
unless the contrary is proved, the accident shall be deemed to have arisen
out of, and in the course of, the employment: provided that it is proved:
- That a workman whilst in the service of one or more employers in any
employment specified in Part C of Schedule III has contracted a disease
specified therein as an occupational disease peculiar to that employment
during a continuous period which is less than the period specified under
this sub-section for that employment, and
- That the disease has arisen out of and in the course of the employment;
the contracting of such disease shall be deemed to be an injury by accident
within the meaning of this section: provided further that if it is proved
that a workman who has served under employer in any employment specified in
part B schedule III or who had served under one or more employers in any
employment specified in part C of that schedule, for a continuous period
specified under this sub-section for that employment and he has after the
cessation of such service contracted any disease specified in the said part
B or that said part C, as the case may be, as an occupational disease
peculiar to the employment and that such disease arose out of the
employment, the contracting of the disease shall be deemed to be an injury
by accident within the meaning of this section
(2A) If a workman employed in any employment specified in part C of schedule III
contracts any occupational disease peculiar to that employment, the contracting
whereof is deemed to be an injury by accident within the meaning of this
section, and such employment was under more than one employer, all such
employers shall be liable for the payment of the compensation in such proportion
as the commissioner may, in the circumstances, deem just.
- The state government in the case of employments specified in part A and
part B of schedule III, and the central government in the case of
employments specified in part C of that schedule, after giving, by
notification in the official gazette, not less than three months' notice of
its intention so to do, may, by a like notification, add any description of
employment to the employments specified in schedule III, and shall specify
in the case of employments so added the diseases which shall be deemed for
this section to be occupational diseases peculiar to those employments
respectively, and thereupon the provisions of sub-section (2) shall apply as
if such diseases had been declared by this act to be occupational diseases
peculiar to those employments.
- Save as provided by sub-sections (2),(2A) and (3), no compensation shall
be payable to a workman in respect of any diseases directly attributable to
a specific injury by accident arising out of and in the course of his
- Nothing herein contained shall be deemed to confer any right to
compensation on a workman in respect of any injury if he has instituted in a
civil court a suit for damages in respect of the injury against the employer
or any other person, and no suit for damages shall be maintainable by a
workman in any court of law in respect of any injury:
- If he has instituted a claim to compensation in respect of the injury
before a commissioner; or
- If an agreement has been come to between the workman and his employer
providing for the payment of compensation in respect of the injury by the
provisions of the act. (2)
Personal Injury by Accident:
An employer is liable to pay compensation to an employee for personal injury
caused to him by accident arising out of and in the course of his employment.
The following conditions must be fulfilled to make an employer liable to pay
compensation to an employee:
The employer is not liable to pay compensation in the following cases:
- Personal injury must have been caused to an employee.
- Such injury must have been caused by an accident.
- The accident must have arisen out of and in the course of employment.
- The injury must have resulted either in the death of the employee or in
his total or partial disablement for a period exceeding three days.
- If the injury did not result in total or partial disablement of the
employee for a period exceeding three days.
- If any injury does not result in death or permanent total disablement,
then the employer can plead:
- That the employee was at the time of the accident under the influence of
drinks or drugs.
- That the employee wilfully disobeyed an order expressly given or a rule
expressly framed to secure the safety of the employee and
- That the employee knowing that certain safety guards or safety devices
were specifically provided to secure his safety, willfully disregarded or
removed such safety guards or safety devices.
The word 'injury' means damage caused to an employee by some accident (accident
means an unforeseen event). The act provides compensation only for personal
injury which includes both psychological and physiological injury.
Lakshmibai vs. Chairman, Port Trustees, Bombay, Bom LR 924:
An employee died due to heart disease while on duty. There was evidence to prove
that the employee was suffering from heart disease and he died as a result of
strain on his heart from the particular work he was doing. The court held that
the death was due to personal injury and hence the legal heirs of the employee
were entitled to claim compensation.
The term 'personal injury' includes any injury which is not designed by the
employee himself, but if the injury is designed by the employee himself, but if
the injury is designed and intended by the person inflicting the same, then it
is unintentional injury as far as the injured is concerned.
Varkey Achan vs Thomman Thomas, 1979
The court held that the term ' accident' under the employee's compensation act
includes any intentional injury committed against the employee by other persons,
the intention not being designed by the employee himself.
The word 'accident' means some unlooked- mishap or an untoward event which is
not expected or designed by the injured employee himself even though there may
be negligence. Therefore, if an occurrence is unexpected and without any design
on the part of the employee, it is an accident. The term accident includes
collisions, falling over obstacles, falling from the roof, exposure to drought,
chill or attack of others etc.
Nishet vs Rayna and Burn:
A cashier travelling on a train with a large sum of money for payment to his
employer's employees was robbed and murdered. It was held that murder was an
accident from the viewpoint of the cashier, as he would never have anticipated
such dacoity and murder.
In the course of (Time & Place)
The phrase "in the course of employment" is wider and is said to require only a
temporal (time) relationship with employment. the phrase is intended to cover
injuries not directly caused by the nature of duties for which a worker is
employed. when it happened at the time the worker was either by an accident in
the workplace or doing some incidental tasks. (3) It suggests the duration of
employment. The employee, at the time of the accident, must be in the process of
doing something in the discharge of his duty. (4) The test to find out whether
an employee is in the course of employment is that he was at the time of the
accident engaged in the employer's business or in furthering his business and
was not doing something for his own benefit/ welfare. (5)
Trustees port of Bombay vs Yamunabai
A bomb placed in the premises of a workshop by some unknown person exploded and
caused injury to a workman. It was held that the workman was not responsible for
placing the bomb, and injury due to its explosion was caused at the time and
place at which he was employed, therefore the injury was the result of an
accident arising out of his employment.
The rule is that if a particular
accident would not have happened to a workman had he not been employed to work
in the particular place and condition, it would be an accident arising out of
the employment. Likewise, where the workmen, working in some factories are
injured due to crashing down within the factory premises of some aircraft, it
will be an injury resulting from an accident arising out of the employment as
the workmen are not responsible for the air crash and they are exposed to that
danger because of their presence on the place of the accident because of their
State of Rajasthan vs Ram Prasad and Another
The workman died due to natural lightning while working at the site, the supreme
court held that so that a workman may succeed in his claim for compensation it
is no doubt true that the accident must have a causal connection with the
employment and arising out of it.
But if the workman is injured as a result of
natural force lightening, though it in itself has no connection with the
employment of deceased Smt. Geeta, the employer can still be held liable if the
claimant shows that the employment exposed the deceased to such injury. In the
present case the deceased was working on the site and would not have been
exposed to such hazard of lightning had she not been working; therefore, the
appellant was held liable to pay compensation.
Chairman Madras Port Trust, vs Smt. Kamala
It was held that fetching food is part of the employee's duty. Therefore, an
accident to an employee while fetching food in the course of employment.
Imperial Tobacco Co. India Ltd vs Salona Bibi
A workman who suffered from high fever was recommended two days' leave by the
doctor. When returned on the third day the doctor found him suffering from
malaria and pneumonia. He was again granted three days' leave. After the expiry
of three days when he came in a rickshaw to report to the doctor, his condition
was so serious that he had to be taken upstairs to the dispensary on a
The doctor found him in almost dying condition and therefore hastened
to administer an injection but he died after a few minutes. It was held that as
the stress and strain of the journey were responsible for causing or
precipitating the workman's death, a tan accident arose out of and in the course
Arising out of:
The phrase "arising out of" is a causal connection between employment & injury
by the accident. it is restrictive& something about employment must have caused
the injury for example tasks, equipment, and surrounding they were given
compensation. The employee should be doing something in the discharge of his
duties to the employer either directly or indirectly.
The term 'employment' has
a wider meaning than the term 'work'. It means that an employee is in the course
of his employment when he is engaged in doing something in the discharge of his
duties to his employer and also when he is engaged in an action arising out of
To prove that injury arose 'out of employment' two conditions must be fulfilled:
- Injury must have resulted from some risk incidental to the duties of
the service and inherent in the natural
condition of employment.
- At the time of injury, the worker must have been engaged in the business
of the employer and must not be doing
something for his advantage or benefit.
Theory of Notional Extension:
This theory of Notional Extension was laid down by the supreme court in
Sowrastra Salt Manufacturing Company vs Bai Velu Raju
According to this theory, under certain circumstances, an employer is liable for
injuries to his employee, even when the employee is away from the premises at
- Now, under the theory of Notional extension, the area which the employee
passes and repasses in going to and leaving the actual place of work is
- An employee may be regarded as in the course of his employment, even
though he had not reached or had left the actual premises where he was
- A personal injury caused to the employee by accident in a public place
becomes an accident in the course of his employment, only if his employee is
then rendering service to his employer or is then discharging some
obligation imposed upon him by the contract of employment.
- Thus the theory of notional extension of the employer's premises does
not extend to the whole of the journey between an employee's residence and
the place of work, but only to places where the employee does the work of
National Iron & Steel Co vs Manorama Dass:
A boy was returning to the factory canteen after serving tea to certain persons
in the factory. He was struck by a bullet and died. It was held that the
accident was arising out of and in the course of his employment.
Works Manager Carriage and Wagon Shop vs Mababir:
A railway employee was ordered to travel to a station to repair a water main.
After finishing the work, he died due to an accident. It was held that the death
arose out of and in the course of employment.
Usually, workers employed in certain occupations are exposed to certain diseases
which are normal in those occupations. Contracting an occupational disease is
deemed to be an injury by accident and is deemed to have arisen out of and in
the course of employment. So, the employer is liable to pay compensation for
such diseases which can be directly attributed to specific injuries by accident.
If the employer is also responsible for the death of an employee, then the death
is deemed to have arisen out of employment.
Mackinam Mackenzie vs Rita Fernandes:
An employee while working in a shop died. He was a heart patient and died of
cardiac failure. His wife claimed and got compensation. It was held it was an
accident arising out of and in the course of employment.
The workmen's compensation act, of 1923 was made to offer compensation to
workers who have encountered injuries due to an accident during their
employment. This act ensures that the rights of the labourers are maintained
even after they encounter some disability or death in the course of employment.
Therefore, employers are obligated to offer compensation to their workers who
encountered injuries that have led to demise or disablement during employment.
- K.D.Srivastava: The Employee's Compensation Act, 1923
- Madhavan Pillai: Labour and Industrial Law
- V.G.Gowsami; Labour Law
B.A., L.L.B. Honors., L.L.M.