The Employees' Compensation Act, 1923 provides for payment of compensation to certain classes of employees (other than one covered under Employees' State Insurance Act, 1948) for injury by accident, resulting in death or disablement and also in respect of occupational diseases, if such employee :

1. Suffers personal injury due to an accident arising out of and in the course of employment; or
2. Contracts any disease peculiar to the employment.

One of the ingredients for ascertaining amount of compensation payable to such an employee is "monthly wages". Section 5 of Employees' Compensation Act, 1923 defines term "monthly wages" to mean an amount of wages deemed to be payable for a month's service.

Section 4 of the Act provides for the manner of computation of compensation. One of the important factors for computing compensation is the `monthly wages' earned by the Employee. It would be apt to take note of Section 4 (1) of the Employees' Compensation Act, 1923 which reads as under;

Section 4 (1): Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:

1. Where death results from the an amount equal to (fifty per cent) of injury the monthly wages of the deceased (employee) multiplied by the relevant factor or an amount of four thousand rupees, whichever is more;
2. Where permanent total an amount equal to sixty per cent of disablement results from the injury the monthly wages of the injured workman multiplied by the relevant factor, or an amount of ninety thousand rupees, whichever is more:

[Provided that the Central Government may, by notification in the Official Gazette, from time to time, enhance the amount of compensation mentioned in clauses (a) and (b).]

Explanation I.: For the purposes of clause (a) and clause (b) "relevant factor" in relation to a workman means the factor specified in the Second Column of the Schedule IV against the entry in the First Column of that Schedule specifying the number of years which are the same as the completed years of the age of the workman on his last birthday immediately preceding the date on which the compensation fell due.

Explanation II.: Where the monthly wages of a workman exceed four thousand rupees, his monthly wages for the purposes of clause (a) and clause (b) shall be deemed to be four thousand rupees only."

From the reading of the above, it is clear that the compensation for the death of the workman is an amount equal to 50% of the monthly wages of the deceased or an amount of eighty thousand rupees, whichever is more. However, Explanation-II clearly specifies and restricts the monthly wages of a workman to be four thousand rupees only even if it exceeds rupees four thousand.

Thus, it is apparent that the amount of compensation payable to an employee is directly influenced by the quantum of monthly wages paid to an employee.

Subsequently, by Notification, dated 21.05.2010, by Act 45 of 2009, the above Section has been amended (w. e. f.18.01.2010) as follows:

1. Where death results from an amount equal to (fifty per cent) of the injury the monthly wages of the deceased (employee) multiplied by the relevant factor or an amount of One Lakh And Twenty Thousand Rupees, whichever is more;
2. Where permanent total an amount equal to sixty per cent of disablement results from the injury the monthly wages of the injured workman multiplied by the relevant factor, or an amount of One Lakh And Forty Thousand Rupees, whichever is more;

Explanation I.: For the purposes of clause (a) and clause (b) "relevant factor" in relation to a employee means the factor specified in the Second Column of the Schedule IV against the entry in the First Column of that Schedule specifying the number of years which are the same as the completed years of the age of the employee on his last birthday immediately preceding the date on which the compensation fell due.

Explanation II: omitted by Act 45 of 2009, S.7 (w. e. f. 18.01.2010)"

It is also not in dispute that Vide Notification dated 31.05.2010 S.O.1258 (E), in exercise of the powers conferred by sub-section (1b) of Section 4 of the Employees Compensation Act, 1923 (8 of 1923), the Central Government has specified Rs. 8, 000/- as minimum wages for the purpose of sub-section (1) of Section 4 of the Employees' Compensation Act, 1923.

There was no confusion regarding the quantum of monthly wages, till the Amendment that came into force on 18-01-2010, Vide Act 45 of 2009. The Explanation II that was provided under Section 4 (1)(b) of the Act was omitted and a new provision in Section 4 (1)(B) was introduced.

Under Section 4 (1)(B), the Central Government was empowered to notify the 'monthly wages' in relation to an employee, as it may consider necessary. The Central Government in terms of Section 4 (1)(B) of the Act, by a Notification in the Official Gazette, dated 31-05-2010, specified the `monthly wages' as RUPEES EIGHT THOUSAND, for the purposes of computing compensation in terms of Sub-Section 4 (1) of the Act.

The Central Government by Notification No. S. O. 71 (E) dated 03-01-2020 almost doubled the "monthly wages" to Rs. 15, 000/- from Rs. 8, 000/- that was notified under Notification No. S. O. 1258 (E) dated 31-05-2010.

It would be gainful to extract Section 4 (1)(B) that was introduced by the Amendment;
"1-B. The Central Government may, by Notification in the Official Gazette, specify, for the purpose of Sub-section (1), such monthly wages in relation to an employee as it may consider necessary".

The question that has risen now is whether the `monthly wages' notified in terms of Section 4 (1)(B) of the Act should be treated as minimum or maximum?

The reason for raising such question arose in the context of increase in the minimum wages every year, under the Minimum Wages Act, 1948, which was higher than the monthly wages notified in terms of Section 4 (1)(B) of the Employees Compensation Act, 1923. The Commissioners for Employees Compensation while determining compensation in respect of claims of employees, wherein, the monthly wages has not been established, relied on the minimum wages, notified under the Minimum Wages Act, 1948, and restricted the same to Rs. 8, 000/- as specified in the Notification dated 31-05-2010, issued by the Central Government, under Section 4 (1) (B) of the Employees Compensation Act, 1923.

The words used is, for the purpose of Sub-section (1) Such Monthly Wages in relation to an employee as it may consider necessary, is the most significant phrase, which is substituted, after deleting the deeming provision that was found in Explanation II. Therefore, the Central Government has specified/quantified Rs. 8, 000/- (Rupees Eight Thousand Only) as the "monthly wages" by Notification dated 31-05-2010 and further increased it to Rs. 15, 000/- (Rupees Fifteen Thousand Only), Vide Notification dated 03-01-2020, for the purpose of computing compensation under Section 4 (1) of the Employees' Compensation Act, 1923.

The quantum of monthly wages having been clearly specified in terms of the provisions of the Employees' Compensation Act, 1923, itself, any recourse to the Wages other than Statutory Deeming Cap of Wages would be contrary to the provisions of the Employees' Compensation Act, 1923.

Further, the Central Government specifying/quantifying Rs. 8, 000/- (Rupees Eight Thousand Only) as the "monthly wages" by Notification dated 31-05-2010 and further increasing it to Rs. 15, 000/- (Rupees Fifteen Thousand Only), Vide Notification dated 03-01-2020, for the purpose of computing compensation under Section 4 (1) of the Employees' Compensation Act, 1923 the legislature has consciously in its wisdom, omitted the Explanation II of Section 4-A of the Act only in order to enhance the minimum rates of compensation. In this regard, it is worthwhile to refer a decision of the Hon'ble Supreme Court in ["State of Jarkhand & Anr. Vs Govind Singh", (2005) 10 SCC 437], at Page 443, wherein, it has been held as under:
15. Where, however, the words were clear, there is no obscurity, there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the court to innovate or take upon itself the task of amending or altering the statutory provisions. In that situation the judges should not proclaim that they are playing the role of a lawmaker merely for an exhibition of judicial valour. They have to remember that there is a line, though thin, which separates adjudication from legislation. That line should not be crossed or erased. This can be vouchsafed by an alert recognition of the necessity not to cross it and instinctive, as well as trained reluctance to do so".

In ["State through CBI Vs Parmeshwaran Subramani & Anr", (2009) 9 SCC 729], at Page 734 the Hon'ble Apex Court has held as under in Para 9:
9. In a plethora of cases, it has been stated that where the language is clear, the intention of the legislature is to be gathered from the language used. It is not the duty of the Court either to enlarge the scope of legislation or the intention of the legislature, when the language of the provision is plain. The Court cannot rewrite the legislation for the reason that it had no power to legislate.

The Court cannot add words to a statute or read words into it which are not there. The Court cannot, on an assumption that there is a defect or an omission in the words used by the legislature, correct or make up assumed deficiency, when the words are clear and unambiguous. Courts have to decide what the law is and not what it should be. The Courts adopt a construction which will carry out the obvious intention of the legislature but cannot set at naught legislative Judgment because such course would be subversive of constitutional harmony."

Therefore, where the "language" is clear, the intention of the legislature is to be gathered from the language used. What is to be borne in mind is as to what has been said in the statute as also what has not been said. Accordingly, the monthly wages specified by the Therefore, the Central Government has specified/quantified Rs. 8, 000/- (Rupees Eight Thousand Only) as the "monthly wages" by Notification dated 31-05-2010 and further increased it to Rs. 15, 000/- (Rupees Fifteen Thousand Only), Vide Notification dated 03-01-2020, for the purpose of computing compensation under Section 4 (1) of the Employees' Compensation Act, 1923 for the purpose of computing the compensation."

The words used is, for the purpose of Sub-section (1) Such Monthly Wages in relation to an employee as it may consider necessary, is the most significant phrase, which is substituted, after deleting the deeming provision that was found in Explanation II. Therefore, the Central Government has specified/quantified RUPEES EIGHT THOUSAND as the "monthly wages" by Notification dated 31-05-2010 and further increased it to Rupees Fifteen Thousand, Vide Notification dated 03-01-2020, for the purpose of computing compensation under Section 4 (1) of the Act. The quantum of monthly wages having been clearly specified in terms of the provisions of the Employees Compensation Act, 1923, itself, any recourse to the Minimum Wages, fixed under the Minimum Wages Act, 1948, would be contrary to the provisions of the Employees Compensation Act, 1923.

The living wages are notified as Minimum Wages under the Minimum Wages Act, for the sustenance of an Employee. The prescription of Minimum Wages notified under the Minimum Wages Act, 1948, cannot be adopted for computing compensation under the Employees Compensation Act, 1923, Since both the Acts have different legislative objects.

Therefore, to conclude, it can be emphatically stated that the Quantum notified as the `monthly wages' in terms of Section 4 (1)(B) of the Employees Compensation Act,1923 alone can be taken for the purpose of computing compensation under the Act. The question, whether the amount specified as monthly wages in the Notification is minimum or maximum would therefore be irrelevant.

Written By: Dinesh Singh Chauhan, Advocate, High Court of Judicature, Jammu.
Email: [email protected]; [email protected].