Liability of Employers under the Employees’ Compensation Act, 2010

 Here is a point-wise discussion on the liability of employers under the Employees' Compensation Act, 2010, formerly known as the Workmen’s Compensation Act, 1923 (amended in 2009 and 2010 to replace “workmen” with “employees” and update compensation structures):

Liability of Employers under the Employees’ Compensation Act, 2010

The Employees’ Compensation Act, 2010 provides for payment of compensation to employees (or their dependents) in case of injury, disability or death caused during the course of employment. This law ensures that employees receive financial assistance due to accidents or occupational diseases occurring while performing their job duties.

1. Scope of the Act

Applicable to employees engaged in hazardous occupations, construction, mining, transport, factory, etc.

Not applicable to members of the armed forces.

Both permanent and temporary employees covered, including contract and casual workers if the accident occurred during employment.

2. Employer’s Liability – Section 3

An employer is liable to pay compensation if:

Personal injury is caused by accident arising out of and in the course of employment.

Injury results in disablement or death.

Injury or death due to occupational disease listed in Schedule III of the Act.

3. Exceptions to Liability

Employer is not liable if:

Injury does not result in disability beyond 3 days.

Injury does not arise out of employment.

Accident is caused due to:

Employee being under the influence of drugs/alcohol.

Willful disobedience to safety rules or safety devices.

Self-inflicted injury or deliberate breach of safety.

4. Types of Disablement Recognized

Temporary Total Disablement (TTD): Employee is fully unable to work temporarily.

Permanent Total Disablement (PTD): Complete and permanent loss of earning capacity.

Permanent Partial Disablement (PPD): Partial, but permanent reduction in earning capacity.

Death: Resulting directly from the accident.

5. Compensation Payable

As per amended Act:

In case of death: 50% of monthly wages × relevant factor (age-based) OR ₹1,20,000 (whichever is higher).

In case of PTD: 60% of monthly wages × relevant factor OR ₹1,40,000 (whichever is higher).

In PPD/TTD: Proportional to the loss of earning capacity.

Note: Compensation is not taxed and must be paid in lump sum.

6. Occupational Diseases – Section 3(2)

Employer is liable if employee contracts a disease peculiar to employment, e.g.:

Pneumoconiosis in mining.

Asbestosis in insulation work.

Lead poisoning in battery manufacturing.

Diseases are specified in Schedule III, and liability exists even without an accident.

7. Notice of Accident – Section 10

Employee must give notice of accident as soon as possible.

Notice can be oral or written and must contain:

Date and time of accident.

Cause and nature of injury.

Name and address of injured employee.

8. Compensation Proceedings – Section 19

In case of dispute, the matter is taken to the Commissioner for Employees’ Compensation.

The Commissioner has power to:

Conduct inquiry.

Record evidence.

Order payment of compensation.

9. Time Limit for Compensation Payment – Section 4A

Compensation must be paid within 30 days of it becoming due.

Penalty: If delayed, employer pays 12% interest per annum + up to 50% penalty as determined by the Commissioner.

10. Employer’s Obligations

Maintain accident registers.

Report fatal accidents to the Commissioner within 7 days.

Ensure prompt payment of compensation.

11. Legal Protection to Employees

Compensation is independent of employer's negligence.

Employee need not prove employer’s fault.

Compensation is a statutory right and cannot be waived.

12. Penalties for Non-Compliance – Section 18A

Fine up to ₹50,000 for failure to:

Maintain records.

Submit returns.

Pay compensation.

Conclusion

The Employees’ Compensation Act, 2010 ensures that employers bear the financial responsibility of workplace injuries or death, providing social and economic security to employees and their families. The liability is strict and statutory, compelling employers to enforce safety measures and handle compensations responsibly.