In any industrial society the problem of the labour management relations becomes so important that some sort of social insurance becomes necessary to provide adequate protection from loss caused to the worker by accident. With the view to improve the conditions of employees some social insurance legislation have been enacted.

The Employees Compensation Act ( hereinafter ECA) is one of the earliest measures adopted for the benefit of worker. It was passed in 1923 & came into force on 1st July 1924. The ECA,1923 is one of the most important social legislation. It aims at providing financial protection to employees and their dependents in case of accidental injury by means of payment of compensation by employer. It is the social security law application for employer and employee. It is applicable to factories, mines, construction, oil fields, establishments but not applicable to armed forces.

Before this act, workers who met with the accidents while performing their duty not only lost their lives & limbs but denied any medical aid and more often then not just removed from their jibs and lost their livelihood placing them & their families in great difficulty.

By passing of this act, liability of employer was fixed and now he is required by law to pay compensation to victim.

Object of the Act:
The object of the act was to make provision for the payment of compensation by certain class of employer to their employees for injury by accident. This act was framed with a view to provide for compensation to employees incapacitated by injury from accident arising out of and in the course of employment .

Features of the Act:

1. The ECA,1923 is modelled on the British pattern. Under the act payment of compensation has been made obligatory on all employers whose employees are entitled to claim benefit under the Act.
    
2. The Employee or his dependent may claim compensation of the injury has been caused by the accident arisen out of and in the course of employment.
    
3. Amount of compensation payable depends in case of death on the average monthly wages of the deceased employee and in case of injured employee both on the average monthly wages and the nature of disablement.
    
4. A subcontractor may indemnify his contractor if he has to pay compensation to the employee. This act is administered by commissioner for employees compensation appointed by the State Government.
    

Definitions

Dependents

Section 2(1)(d) of the ECA,1923 divides the dependents of the deceased employee in three categories as follows :

A. First Category- The dependents belonging to this category are widow, minor (legitimate or adopted) son, unmarried (legitimate or adopted) daughter, and a widowed mother.

The dependents of the first category are not required to prove their dependency on the deceased employee at the time of his death. For example, the widow or any other dependent in this category may not be dependent on the earning of the deceased employee, yet they fall within the definition of dependents of first category and can claim compensation.

Widow

Widow belongs to the first category of dependents. A widow is not required to prove her dependency on the deceased employee at the time of his death.

Case Laws:

• R.B. Moondra & Co. Vs. Ms. Bhanwari
  In this case, the Court held that "a widow who is entitled to claim compensation at the time of death of her husband is not disentitled by her subsequent marriage."

Concubine

Case Laws:
Laxmirani Behera Vs.Commissioner of Employees' Compensation & Asst. Labour Commissioner, Balsore
In this case, the Orissa HC held that concubine of deceased employee is not a "widow". Therefore concubine cannot be characterized as 'dependent' and is not entitled to compensation under the ECA,1923.

Mother

A foster parent is not included within the word 'parent'. So, a mother does not mean a foster mother.

Case Laws:

• United India Insurance Co. Vs. Smt. Hrinakshi
  The maternal aunt of deceased employee claimed compensation being a foster mother. She contended that being a foster mother, she falls within the definition of 'dependent' of first category. But the Court did not allow the compensation to the maternal aunt on the ground that the word 'mother' in the definition of 'dependent' under Sec. 2(1)(d) does not include foster mother.

B. Second Category
The dependents belonging to this category are if wholly dependent on the earnings of the employee at the time of his death, a son or a daughter who has attained the age of 18 years and who is infirm.

The dependents belonging to second category are required to prove their physical or mental infirmity as well as their total dependency on the earnings of the deceased employee. If the dependents prove the above mentioned facts, only then they fall within the definition of the dependents of second category and can claim compensation.

Case Law:

• New India Assurance Co. Ltd. Vs. Tijender Kaur & Ors.
  In this case it was laid down that the definition of dependent lay down that no application for settlement can be made other than by the dependent or dependents.

C. Third Category
The dependents belonging to this category are:

• A widower,
• A parent other than a widowed mother,
• A minor illegitimate son,
• An unmarried illegitimate daughter,
• A daughter ( legitimate or illegitimate or adopted) if married and minor or if widowed and a minor,
• A minor brother or an unmarried sister or a widowed sister if a minor,
• A widowed daughter-in-law,
• A minor child of a predeceased son,
• A minor child of a predeceased daughter where no parent of the child is alive, or
• A paternal grandparent of no parent of the employee is alive.

The dependents of the third Category must prove their whole or partial dependency on the earnings of the employee at the time of his death.

Widower

Case Law:

• Divisional Manager, New India Assurance Co. Ltd. V. Raludas Sakar
  'Widower' falls in the third category of dependents. The law does not require that the widower should be wholly dependent on the earnings of the deceased wife. It has been held by the Court that partial dependence to whatever extent is sufficient to bring the 'widower' within the third category of dependents under Sec. 2(1)(d).
   
• New India Assurance Co. Ltd. Vs. Sanganna Gowda
  The court held that the widower a 'dependent' under Sec. 2(1)(d). The court held that the widower in this case was a 'coolie' by avocation and the coolie's work is not regular and at times seasonal, therefore, he could be said to be dependent partially upon earnings of his wife at the time of her death.
   
• Unmarried sister & Minor Brother
  Unmarried sister and minor brother of the deceased employee fall in the third category of "dependents" under clause (III) of sec. 2(d) if they prove their dependency whether partial or total on deceased employee at the time of his death.

Case Laws:

• Suresh Kumar & Ors. Vs. Smt. Urmila & Ors.
  In this case, the unmarried sister and minor brother of the deceased employee moved an application for share in the compensation to the widow and widowed mother of the deceased employee. Because the widow and widowed mother belong to the first category of dependent in clause(i) of Sec.2(d) and therefore they have not to prove their dependency on the deceased employee.
  
  But the Court rejected the claim of the unmarried sister and minor brother. Because unmarried sister and minor brother could not prove their dependency on the deceased employee. Whereas unmarried sister and brother belong to the third category of dependents in clause (III) of Section 2(d). Therefore, they were required to prove dependency on the earnings of the deceased employee to claim ashier in the compensation payable to the dependence of the deceased employee.
   
• Laxmi Behera Case
  In this case, the Orissa HC held that the concubine of deceased not being a "widow" cannot be characterized as "widow" and is not entitled to compensation under Employees' Compensation Act,1923. But the children born through her, being illegitimate children of deceased would be entitled to compensation. Because they fall in the definition of "dependent" under clause (III)of sec. 2(d).
   

Employee
Employee means a person, who is:

1. According to Sec. 2(34) of the Railways Act,1989, railway servant means "any person employed by a Railway Administration in connection with the service of a railway." According to the definition of employee under Sec. 2(dd) , a railway servant is a employee if:
   
   • He is not 'permanently' employed in any administrative, district or sub- divisional office of a railway; and
   • He is not employed in any such capacity as specified in Schedule II of the Act.
      
2. A master, seaman or other member of the crew of a ship; A captain or other member of the crew of an aircraft; a person recruited as driver, helper, mechanic, cleaner, or in any other capacity in connection with a motor vehicle; 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 India; or
    
3. 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 dependents or any of them.

Case Laws:

• Kerala Balagram Registered Society V. K.M. Kochuman
  In this case it has been held that, the person employed for the purpose of sifting harvested paddy has been held to be an "employee" within the definition of employee under Sec. 2(dd) of the ECA,1923.
   
• Bhopal Sugar Industries V. Sumitra Bai
  The Court held that the word "farming" ordinarily means business of cultivating land which obviously does not mean merely ploughing of land but all other subsequent operations in which a farmer necessarily engages like irrigating the fields, harvesting the crops, etc. As deceased was bitten by the snake in the course of his employment, therefore, the widow of deceased was entitled to compensation.
   
• Director of Printing & Publication Vs. Bramananda Dhall
  The Court rejected the claim of the Junior Production Officer on the ground that he did not fall within the definition of employee under Sec. 2(dd) read with item (ii) of Schedule II. Because item (ii) of Schedule II excludes the person employed in clerical capacity in a factory from the definition of 'employee' under Sec. 2(dd) of the ECA,1923.
   
• Principal Secretary, Transport Deptt., Government of Sikkim Vs..Smt. Narayna
  The deceased employee held the gazetted post in State Engineering Service. As the employment in such capacity was not mentioned in the Schedule II of the ECA,1923,the employee was held not to be within the definition of employee under Section 2(dd) ECA,1923. Therefore, the provisions of compensation under the ECA,1923 did not apply to the deceased employee.
   
• Narayan Vs. Southern Railway
  The Kerala HC in this case held that there exists an employer- employee relationship between the railways and the licensed porter.

Employer
According to the definition under Sec. 2(e), the term 'employer' includes the following persons:

1. Any body of persons whether incorporated or not.
2. Managing agent of the employer.
3. Legal representative of the deceased employer.
4. 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 apprentice, means such other person while the employee is working for him.
    

'Managing agent' is an employer

• Baijnath Singh v. Oudh Tirhut Railway
  In this case, the Allahabad HC observed that "an employer may be one Individual or more than one. If there are two or more employers, then it will be open to them to appoint one of them as a managing agent. A managing agent so appointed will not be subordinate to the other employer but will act as the representative of the other."
  
  Further the Court held that "it may be that an employer is a minor or insane or under some disability. In that case a guardian or any other person acting as the representative of the employer for the purpose of carrying on such employer's trade or business will be a managing agent, not subordinate to that employer."
   

Manager is not employer
Manager does not represent the employer. Because manager acts in subordination to his employer. " Subordinate " means subordinate in law and not in fact.

Case Law:

• Raghunath Sahai V. Sarup Singh
  The Court held that Raghunath Sahai being the manager of Kampa Devi does not fall within the definition of 'employer'. Thus, compensation cannot be claimed against Raghunath Sahai. However, the respondent, Sarup Singh, could pursue the remedy against Kampa Devi as she is the employer.
   

Disablement
Death or different kinds of disablements are result of an injury. The ECA,1923 provides compensation for the kinds of disablements are as follows:

1. Permanent total disablement
2. Permanent partial disablement
3. Temporary disablement whether total or partial.

Permanent total disablement
Injuries deemed to result in " Permanent total disablement":

1. Every injury specified in Part I of Schedule I
   
   According to Sec. 2(l), "permanent total disablement" is deemed to result every injury specified in Part I of Schedule I of the ECA,1923.
   
   Following are the injuriee deemed to result in "permanent total disablement" as contained in Part I of Schedule I.
   
   • Loss of both hands or amputation at higher sites.
   • Loss of a hand and a foot.
   • Double amputation through leg or thigh, or amputation through leg or thigh on one side and loss of other foot.
   • Loss of sight to such an extent as to render the claimant unable to perform any work for which eyesight is essential.
   • Very severe facial disfigurement.
   • Absolute deafness.

Incapacity for all work which the employee was capable of performing at the time of the accident : Permanent total disablement

Case Laws:

• Narian Singh v/s Srinivas Sabata
  The Hon'ble SC held that as the injury incapacitated the employee for all work which he was capable of performing at the time of accident, therefore the employee suffered permanent total disablement. The SC held that Sabata was carpenter by profession and by loss of his left arm from elbow he has evidently been rendered unfit for the work of carpenter as the work of carpentry cannot be done by in hand only.
   
• Kaveri v/s Markanda Naidu,1998 Lab IC 61 (Kant)
  If the employee is incapacitated to do all the work which he was capable of performing at the time of accident it is a case of total disablement. It may be that in view of the injuries the employee is capable enough to render some other sort of work, but still when there is incapacity to the work which he was capable of performing by the date of accident, it is a case of total disablement.
   
• Puran Dutt v/s H.R.T.C
  The claimant driver suffered 30% physical disability, it was found that in this case that though there is 30% of physical disability, yet the injury sustained by the employee that crushed his leg incapacitated the employee to do the work of driving which he was capable of performing at the time of the accident. The HC in this case held that assessment of the compensation under Sec. 4(1)( c ) of the ECA,1923 taking into consideration that the claimant driver has suffered permanent total disability and loss of earning capacity at 100% was proper.
   

ii. Combination of injuries specified in Part II of Schedule I
According to Sec. 2 (l), " permanent total disablement " is deemed to result from the loss of earning capacity, as specified in Part II of the Schedule I if the aggregate percentage of the loss of earning capacity per cent or more.

For example, according to Part II of the Schedule I, the loss of earning capacity in case of amputation through shoulder joint is 90%. Whereas loss of earning capacity for the loss of partial vision of one eye has been specified to be 10% in Part II of Schedule I.

If an employee suffers injury resulting in loss of partial vision of one eye and amputation through shoulder joint, then the aggregate percentage of the loss of earning capacity amounts to 100%. Thus, in case the combination of injuries caused loss of 100% of earning capacity. Therefore, in such case the disablement is deemed to be "permanent" and " total" in its nature.

Case Law:

• K. Gopal V. Management, Pandain Roadways Corp. Ltd.
  Total disablement is assessed only with reference to the work, the employee was performing at the time of the accident. If the employee becomes disabled to perform the work, he was capable to perform at the time of accident, then it is total disablement.

Permanent partial disablement
According to Sec.2(g) of th ECA,1923, " permanent partial disablement" means such disablement as reduces the earning capacity in every employment which he was capable of undertaking at that time."

According to Sec. 2(g), every injury specified in Part II of Schedule I is deemed to result in permanent partial disablement. Part II of Schedule I specifies the percentage of loss of earning capacity for 48 kinds of injuries.

Case Law

• Kaveri v/s. G. Markanda Naidu
  Law Specifically provides that injuries specified in Part II of Schedule I, shall always be deemed to result in permanent partial disablement and there is no question of any further examination or investigation.

Where permanent partial disablement results from injury not specified in Part II of Schedule I

In such a case the permanent partial disablement is assessed by the qualified medical practitioner. The percentage of loss of earning capacity in such case is determined by the qualified medical practitioner. However, according To Sec. 4(1)(c ), while assessing the loss of earning capacity, the medical practitioner must have due regard to the percentage of loss of earning capacity specified for different injuries in the Schedule.

Case Laws:

• Prakash Kumar Sathpathy v/s. Rama Chandra Maharana
  For example, the amputation through the shoulder joint is a scheduled injury for which the Schedule fixed the loss of earning capacity at 90%. But there may not be an amputation but the movement of the hand is restricted due to some grievous injury or say due to malunion of the fracture.
  
  For this injury the Schedule does not fix percentage of loss of earning capacity. For such non scheduled injury, the loss of earning capacity is determined by the qualified medical practitioner on the basis of percentage of disablement.
   
• New India Assurance Co Ltd. v/s. Sudarsan Samal
  In this case, the Orissa HC held that " a doctor is competent to speak about the physical disablement suffered by the injured which is reasonably within the scope of his expertise. Regarding loss of earning capacity, which cannot be equated with physical disablement in all cases, he cannot be said to be an expert in the matter."
  
  The Orissa HC further held that the commissioner in whom the power of adjudication is vested under the Act may or may not accept the doctor's statement relating to loss of earning capacity of the injured on judging the entire matter.
   
• United India Insurance Vs. K. Mohanan
  But in this case, the Kerala HC held that, the commissioner in absence of assessment made by qualified medical practitioner, cannot himself assess loss of earning capacity of injured employee.
  
  Reduction of "earning Capacity" for non- scheduled injury is a question of fact
  
  Reduction of "earning capacity" is an essential ingredient of "partial disablement" as defined under Sec. 2(g) of the ECA,1923. Part II of Schedule I enlists the injuries and specifies the extent of reduction of earning capacity for such injuries. But an injury may not be enlisted in the Schedule, therefore for which reduction of earning capacity is not fixed. In the case of that non- scheduled injury, the reduction in earning capacity will have to be proved as a fact.
  
  The loss of earning capacity is not co-extensive with the loss of physical capacity. It is only in case of a scheduled injury that such a loss is presumed. Where an employee claims compensation in respect of an injury which is not scheduled injury, the loss of earning capacity cannot be proved by mere medical evidence. It must be proved by evidence which will establish that the employee was as a result of the injury unable to earn as much as he did any other question of fact.
  
  In case of non- scheduled injury the physical disability is assessed by "qualified medical practitioner."

Temporary partial disablement
According to Sec.2(g), "partial disablement" means, where the disablement is of a temporary nature, such disablement as reduces the earning capacity of an employee in any employment in which he was engaged at the time of accident resulting in the disablement.

Loss of earning capacity may not be co- extensive with physical incapacity
Medical evidence is opinion evidence, and, it is only with regard to the physical aspect of the injuries, that the opinion of a medical witness is relevant and admissible, as the opinion of expert. But loss of earning capacity is not a matter for medical opinion and is not a matter to which a medical evidence can possibly speak.

However, medical opinion is taken into consideration when the Tribunal is to assess the loss of earning capacity. As loss of earning capacity is not necessarily extensive with the loss of physical capacity, and it is always open for the Tribunal to assess the loss of earning capacity, having due regard to the medical evidence on record.

Case Laws:

• National Insurance Co Ltd v/s. M. Shyam Prasad
  In this case, though the physical incapacity certified by the doctor was 25 percent, the Tribunal calculated the compensation on the basis of 30 percent loss of earning capacity that exceeded 25 percent loss of physical capacity. Here, it was held that in case of non- scheduled injuries, the Tribunal can determine percentage of loss of earning capacity beyond percentage of disability certificate by a medical practitioner under Section 4(1)(c ) (ii) of the ECA,1923.
   
• Palraj v/s. Divisional Controller, NEKRTC
  The Hon'ble SC in this case held that, " while computing compensation for disabilities being suffered by a workman, it is the functional disability resulting in the loss of earning capacity which is the criteria which is followed in assessing compensation."

Conclusion
This act is made for the welfare of the employees. If the employee suffers personal injury by an accident and accident arises out of and in the course of employment then he can claim compensation from his employer. Amount of compensation is decided in the basis of injury. So to claim compensation one must know who can claim in his behalf and how much.

Written By:

1. Nikita
2. Akshara Kaushik