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Employer's liability to render compensation to an employee

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]

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[2], 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:
  1. 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[3], 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:
    · The lightening struck at the deceased when he was in employment of the employer; and
    · If the deceased had not been on the work place where the lightening struck at him, the deceased would not have died.
     
  2. 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[4], 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[5]. 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[6]:
  1. 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;
  2. The injury does not result in death of the employee;
  3. The employee, at the time of accident, was drunk;
  4. The employee intentionally disobeyed any rules or regulations framed for the safety of employees; and
  5. The employee intentionally disregarded or removed the safety grounds framed for their safety.

LIABILITY OF AN EMPLOYER IN CASE OF AN OCCUPATIONAL DISEASE[7]
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.

End-Notes:
  1. Section 3(1), The Employees' Compensation Act, 1923.
  2. AIR 1961 Punj. 102
  3. (2001) I LLJ 177 (SC).
  4. AIR 1953 Cal. 143.
  5. Section 2(g), The Employees' Compensation Act, 1923.
  6. Proviso to section 3(1), The Employees' Compensation Act, 1923.
  7. Section 2, The Employees' Compensation Act, 1923

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