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WORKMEN’S

COMPENSATION

by

AUM INSURANCE
BROKERS
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RECENT DEVELOPMENTS

THE WORKMEN’S COMPENSATION


(AMENDMENT) BILL, 2009

(AS PASSED BY THE HOUSES OF


PARLIAMENT)

LOK SABHA ON 25TH NOVEMBER, 2009

RAJYA SABHA ON 1ST DECEMBER, 2009


(For details reference must be made to the bill)
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RECENT DEVELOPMENTS

The word Workmen has been


substituted by Employees therefore now
it is known as Employees Compensation
Act

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RECENT DEVELOPMENTS
Who is ―Employees‖
―employee‖ means a person, who is —
(i) a railway servant as defined in clause (34) of section 2 of the
Railways Act, 1989, not permanently employed in any
administrative district or sub-divisional office of a railway
and not employed in any such capacity as is specified in
Schedule II; or
(ii) (a) a master, seaman or other member of the crew of a ship,
(b) a captain or other member of the crew of an aircraft,
(c) a person recruited as driver, helper, mechanic, cleaner or in
any other capacity in connection with a motor vehicle,
(d) a person recruited for work abroad by a company,
and who is employed outside India in any such capacity as is
specified in Schedule II and the ship, aircraft or motor
vehicle, or company, as the case may be, is registered in
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India; or
RECENT DEVELOPMENTS
Who is ―Employees‖
―employee‖ means a person, who is —

(iii) employed in any such capacity as is specified in Schedule II,


whether the contract of employment was made before or
after the passing of this Act and whether such contract is
expressed or implied, oral or in writing; but does not
include any person working in the capacity of a member of
the Armed Forces of the Union; and any reference to any
employee who has been injured shall, where the
employee is dead, include a reference to his dependants or
any of them;’

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RECENT DEVELOPMENTS
New Additions/changes –
A new Section has been introduced as mentioned
below –
―The employee shall be reimbursed the actual
medical expenditure incurred by him for treatment of
injuries caused during the course of employment.‖
The amount of compensation has been changed from Rs.
80,000/- to Rs. 1,20,000/- or 50% or an amount equal to
50% of the monthly wages of the deceased workman
multiplied by the relevant factor, which ever is more, if
death results from injury.
The amount of compensation has been changed from Rs,
90,000/- to Rs. 1,40,000/- or an amount equal to 60% of the
monthly wages of the injured workman multiplied by the
relevant factor, where total permanent disablement results
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from the injury; whichever is more.
RECENT DEVELOPMENTS
New Additions/changes –
Monthly wages of Rs. 4000/- have been revised to Rs.
8000/-
If the injury of the workman results in his death, the
additional compensation has been increased from Rs.
2500/- to minimum Rs. 5000.
. The appointment of the Commissioner for Workmen’s
Compensation has been made on the basis of experience.
The Commissioner shall dispose of the matter relating to
compensation under this Act within a period of three
months from the date of reference and intimate the
decision in respect thereof within the said period to the
employee.
. In many industries/type of works, the group size in
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numbers have been deleted.
POLICY COVERAGE
Indemnity to Insured/Employer against
his/their liability under :
1. W. C. Act, 1923 and amendments thereof up
to the date of issuance of policy.
2. The Indian Fatal Act, 1955
3. The Common Law

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TARIFF
Tariff classifies various Trades / Risks
depending upon hazards involved.
Premium rates (per mille) are applied to
total estimated annual wages for each
category of employees.
There are exceptions where rate is per
capita.
Occupational diseases may also be covered
under WC Policy at additional premium
At the end of Policy period wages
adjustment is must.
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TARIFF
Unless specifically declared employees of sub-
contractors not covered.
Policy period is normally 12 months unless
shorter term desired for specific contract to
be executed.
As per amended act maximum wages taken is
Rs. 8000/- p.m. for calculation of
compensation.
For wages in excess of Rs. 8000/- p.m.
additional premium to be collected as per
tariff for coverage under Fatal Accident Act
and Common Law. 10
TARIFF

Liability under WC Act will arise


only if the workman has sustained
injury / accident during the course
of and out of employment only.
Occupational diseases are not
covered unless additional premium
is paid.

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COMPENSATION ?
For the purpose of computing
compensation payable under the Act,
maximum wages are taken at Rs. 8000/-
pm.
Different yardsticks for Fatal cases,
Permanent Total / Partial Disability or
Fortnightly compensation for Temporary
Total Disablement.
Commissioner to dispose off the matter of
compensation and intimate the employee with
in a period of three months from the date of
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COMPENSATION ? (cont..)
Fatal Cases
An amount equal to 50 % of average
(preceding 12 months) monthly salary of
deceased, multiplied by ―age factor‖ or an
amount of Rs. 1,20,000/- whichever is more.
Amount to be deposited with WC
Commissioner.

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COMPENSATION ? (cont..)
Permanent Total Disablement
An amount equal to 60% of average
(preceding 12 months) monthly salary of
deceased, multiplied by ―age factor‖ or an
amount of Rs.1,40,000/- whichever is more.
Amount to be deposited with WC
Commissioner.

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COMPENSATION ? (cont..)
Permanent Partial Disablement
As per % age of loss of earning capacity
which may vary from 1 % to 90 % of the
amount generated as per PTD.
May be paid to workman under
Memorandum of Agreement ―L‖.

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COMPENSATION ? (cont..)
TEMPORARY DISABLEMENT
An amount equal to 25 % of average
monthly wages subject to maximum Rs.1000
for every 15 days for maximum 5 years.
If disablement is less than 28 days, 3 days
waiting period to be reduced. (no comp. for
period up to 3 days).
If disablement exceeds 28 days no waiting
period.
Amount can be disbursed to employee
under appropriate discharge.
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EXTENSION FOR
MEDICAL EXPENSES
To cover medical expenses in different
slabs from Rs. 80/- to Rs. 2400/-
premium to be loaded by 12.5% to
45% (some insurance companies are
revising these slabs)
Reimbursement payable even if
compensation not payable due to
waiting period.
Ambulance charges for taking injured
workman to Hospital is admissible. 17
ASBOLUTE LIABILITY OF EMPLOYER

Liability under WC Act is absolute except


under following circumstances :
Any injury not resulting in to death if accident
directly attributable to
1. Workman under influence of drug / liquor.
2. Willful disobedience of express orders or rule
framed for safety
3. Willful removal or disregards by workman of
any safety device which he knew to have been
provided for his safety.

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INDIAN FATAL ACT &
COMMON LAW
Claimant can claim up to an unlimited
amount from a person at whose neglect or
default Fatal Accident had happened.

Under Common Law, person gets right to


claim from another damages up to an
unlimited amount for injury or loss.

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IMPORTANT TO NOTE:
1. Policy do not cover liability of employer for
payment of Interest / penalty which may be
imposed on him/them on account of failure to
comply with provisions of WC Act.
2. For accidents giving rise to Fatal case, PTD or
PPD compensation must be deposited / paid
within one month otherwise it may be subject
to interest / penalty up to 50%.
3. There is a bar against double remedies i.e.
under WC Act and other law but election
permissible.
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REQUIREMENTS FOR CLAIMS

Immediate intimation.
Claim form with statement of occurrence.
Details of wages of injured workman paid in
last 12 months or wages of another workman
in similar employment.
For Fatal case, police papers, post mortem
report, death certificate etc.
For other cases, Certificate of injury, fitness,
Bills of Medical Expenses etc.

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