POST GRADUATE DIPLOMA (LABOUR LAW)

Employer’s liability
under workmen
compensation act

Prepared by: ZIAUL HAQ

Submitted to: Prof (Dr.). Nuzhat Parveen Khan
 Acknowledgement

Firstly, I would like to express my profound sense of gratitude towards

the almighty for providing me with the authentic circumstances which
were mandatory for the completion of my project.
Secondly, I am highly indebted to Prof.(Dr.) Nuzhat Parveen at Faculty
of Law, Jamia Millia Islamia University, and New Delhi for providing
me with constant encouragement and guidance throughout the
preparation of this project.
My cardinal thanks are also for my parents, friends and all teachers of
law department in our college who have always been the source of my
inspiration and motivation without which I would have never been able
to unabridged my project.

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 Contents

INTRODUCTION 4
Meaning of ‘workman’ 6
Employer's Liability for Compensation 9
Section 3.Employers liability for compensation 10
Persons entitled to compensation 11
Distribution of compensation 12
Agreement as to compensation payable to workman 13
Amount of compensation 18
Conclusion 19
Bibliography 20

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INTRODUCTION
A beginning of social security in INDIA was the passing of the
Workman’s Compensation Act 1923. In 1921, the government
formulated some proposals for the grant for compensation and circulated
them for opinion. The proposals received general support. As a result,
the workman’s Compensation Act was passed in March 1923 and was
put into force on July 1, 1924. Subsequently, there were a number of
amendments to the act.
The Workmen's Compensation Act, aims to provide workmen and/or
their dependents some relief in case of accidents arising out of and in the
course of employment and causing either death or disablement of
workmen. It provides for payment by certain classes of employers to
their workmen compensation for injury by accident.

The Workmen’s Compensation Act is the first piece of legislation

towards social security. It deals with compensation for workers who are
injured in the course of duty. The scheme of the Workmen’s
Compensation Act is not to compensate the worker in lieu of wages. The
general principle is that a worker who suffers an injury in the course of
his employment, which results in a disablement, should be entitled to
compensation and in the case of a fatal injury his dependants should be
compensated. Under the Workmen’s Compensation Act it is the
employer who is responsible to pay compensation (as opposed to the
employees State insurance. Establishments to which the Employees’
State Insurance Act applies to the liability to pay compensation is on the
ESI corporation). The meaning of compensation in this Act is limited to
compensation granted under the Act for employment injuries sustained
during the course of work. It is also limited to specifically monetary
compensation other than a salary, travel allowance, and any other form
of remuneration that could be paid under normal circumstances of
employment. To get an overall understanding of the Act it is useful to
look at the “Statement of Objects and Reasons’ published with the Act

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when it was first passed in 1923. To quote: the growing complexity of
industry in this country with the increasing use of the machinery and
consequent danger to workmen, along with the comparative poverty to
workmen themselves renders it advisable that they should be protected,
as far as possible from hardship arising out of accidents.

The growing complexity of industry in this country, with the increasing

use of machinery and consequent danger to workmen, along with the
comparative poverty of the workmen themselves, rendered it advisable
that they should be protected, as far as possible from hardship arising
from accidents. After a detailed examination of the question by the
Government of India, Local Governments were addressed in July 1921,
and provisional views of the Government of India were published for
general information. The advisability of legislation had been accepted by
the great majority of Local Governments and of employers’ and
workers’ associations and the Government of India believed that public
opinion generally is in favor of legislation. In June, 1922 a committee
was convened to consider the question. After considering the numerous
replies and opinions received by the Government of India, the committee
was unanimously in favor of legislation, and drew up detailed
recommendations. On the recommendations of the committee the
Workmen’s Compensation Bill was introduced in the Legislature.

.
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 1. (1) This Act may be cited as the Workmen’s Compensation Act,
1983, and shall come into operation on such date as the Minister may
appoint by notice in the Gazette and the Minister may appoint different
dates for the coming into operation of different Parts or different
provisions of the Act.
(2) This Act applies to every employer in Swaziland, including the
Government and to every workman who is employed in or outside
Swaziland by such an employer except a workman who is employed
outside Swaziland in employment to which any law of another country
applies which provides compensation for employment accidents.

Meaning of ‘workman’.
2. (1) In this Act, unless the context otherwise requires – ‘workman’
means, subject to sub-section (2) of this section, any person who has
entered into or works under a contract of service or of apprenticeship or
of traineeship whether the contract is express or implied, is oral in
writing and whether the remuneration is calculated by time or work
done.
(2) The following persons are excluded from the definition of
‘workman’-
a) a person whose employment is of a casual nature and who is
employed otherwise than for the purposes of the employer’s trade or
business, not being a person employed for the purpose of any game or
recreation and engaged or paid through a club:
b) an outworker, that is to say a person to whom articles or materials are
given out by an employer to be made up, cleaned, washed, ornamented,

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finished, repaired or adapted for sale on premises not under the control
of the employer;
c) A domestic servant employed as such for wages in or about a private
household by the householder;
d) A member of the employer’s family dwelling in his house;
e) A member of Umbutfo Swaziland Defense Force;
f) Any class of persons whom the Minister may by notice in the Gazette
declares not to be workmen for the purpose of this Act.
(3) If in any claim for the recovery of compensation under this Act it
appears to the labour Commissioner or to the Court that the contract of
service or apprenticeship or traineeship under which the injured person
was working at the time when the accident causing the injury happened
was illegal, the labour Commissioner or the Court as the case may be,
may, if having regard to all the circumstances of the case it is thought
proper so to do, deal with the matter as if the injured person had at he
time the aforesaid been a person working under a valid contract of
service or apprenticeship.
(4) Any reference to a workman who has been injured shall, unless the
context otherwise requires, if the workman is dead, include a reference
to his legal personal representative or to his dependants or any of them
or to such officer as the Minister may appoint to act on behalf of the
dependants of the workman.
“Compensation” means compensation as provided for by this Act;
“dependant” means a member of the family of a workman who was
wholly or in part dependent upon his earnings at the time of his death, or
would but for the incapacity due to the accident have been so dependent;

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and if the workman, being the parent or grandparent of an illegitimate
child, leaves such child so dependent upon his earnings, or being an
illegitimate child, leaves a parent or grand-parent so dependent upon his
earnings, shall include such an illegitimate child or parent or grand-
parent respectively:
Provided that a person shall not be deemed to be a partial dependant of
another person unless he was dependant partially on contributions from
such other person for the provision of the ordinary necessaries of life
suitable for persons in his class and position;
“Dental practitioner” has the meaning ascribed thereto by the Medical
and Dental Practitioners Act 1970;
“Disablement” means, if of a temporary nature, such disablement as
temporarily incapacitates a workman for, or temporarily reduces his
earning capacity in, any employment which he was cable of undertaking
At the time of the accident resulting in such disablement:

“employer” includes anybody of persons whether incorporated or not

and any managing agent of an employer and the legal representative of a
deceased employer, and, when the services of a workman are
temporarily lent or let on hire to another person by the person with
whom the workman has entered into a contract of service or
apprenticeship, means such other person while the workman is working
for him;

wages”, includes any privilege or benefit which is capable of being

“
estimated in money, other than a travelling allowance or the value of any
travelling concession or a contribution paid by the employer of a
workman towards any pension or provident fund or a sum paid to a

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workman to cover any special expenses entailed on him by the nature of
his employment;

Employer's Liability For Compensation

The employer of any establishment covered under this Act, is required to
compensate an employee:

1. Who has suffered an accident arising out of and in the course of his
employment, resulting into (i) death, (ii) permanent total
disablement, (iii) permanent partial disablement, or (iv) temporary
disablement whether total or partial, or
2. Who has contracted an occupational disease?

HOWEVER THE EMPLOYER SHALL NOT BE LIABLE

1. In respect of any injury which does not result in the total or partial
disablement of the workmen for a period exceeding three days;
2. In respect of any injury not resulting in death, caused by an
accident which is directly attributable to-
i. the workmen having been at the time thereof under the
influence or drugs, or
ii. the willful disobedience of the workman to an order
expressly given, or to a rule expressly framed, for the
purpose of securing the safety of workmen, or
iii. The willful removal or disregard by the workmen of any
safeguard or other device which he knew to have been
provided for the purpose of securing the safety of workmen.

The burden of proving intentional disobedience on the part of the

employee shall lie upon the employer.

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 iv. when the employee has contacted a disease which is not
directly attributable to a specific injury caused by the
accident or to the occupation; or
v. When the employee has filed a suit for damages against the
employer or any other person, in a Civil Court.

Section 3.Employers liability for compensation:

The liability of employer o pay compensation is limited and is subject to
the provisions of the Act.
Under sub-section (1) of section (3) the liability of the employer to pay
compensation is dependent upon the following four conditions:
(1) Personal injury must have been caused to a workman
(2) Such injury must have been caused by an accident
(3) The accident must have been arisen out of and in the course of
employment ; and
(4) The injury must have resulted either in death of the workman
or in his total or partial disablement for a period exceeding
three days.
The employer shall not be liable to pay compensation in the
following cases:
(a) If the injury did not result in total or partial disablement of the
workman for a period exceeding three days;
(b) In respect of any injury not resulting in death or permanent total
disablement the employer can plead :
(i) That the workman was at the time of accident under the
influence of drinks or drugs ;

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 (ii) That the workman willfully disobeyed on order
expressly given or a rule expressly farmed for the
purpose of securing safely of workman ; and
(iii) That the workman having known that certain safety-
guards or safety devices are specifically provided for
the purpose of securing the safety of workman,
willfully disregarded or removed the same.
The employer can succeed in his plea only if he can establish that the
injury was attributable to any one of the above factors.

Persons entitled to compensation.

(1) The compensation shall be payable to or for the benefit of the
workman or, where death results from the injury, to or for the
benefit of his dependants as provided by this Act.
(2) If there are both total and partial dependants, nothing in this Act
shall be construed as preventing compensation being allotted partly to
the total and partly to the total and partly to the partial dependants.
(3) If a dependant dies before a claim for compensation in respect of
the death of a workman is made or, if a claim has been made, before
an order for the payment of compensation has been made, the legal
personal representative of the dependant shall have no right to
payment of compensation, and the claim for compensation shall be
dealt with as if that dependant had died before the workman.

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Distribution of compensation
(1) Compensation payable if the death of a workman has resulted
from the injury shall be apportioned by the Labour Commissioner
among the dependants of the deceased workman in accordance with
rules set out in regulations made under this Act.
(2) The Labour Commissioner shall direct that the sum allotted to
any one dependant under sub-section(1) or the sum payable to an
injured workman under section 7 or section 8 shall be paid to the
person entitled to receive it or to such other person or authority as
may be specified in the aforementioned rules for the purpose of
investing, applying or otherwise dealing with the sum for the benefit
of the workman or of the person in respect of whom it is paid as the
Labour Commissioner thinks fit.
(3) Compensation payable to an injured workman under section 9
shall be paid to him at the intervals and times at which the workman
would ordinarily receive his earnings or, where payment as aforesaid
is not practicable, at such other intervals and times as the workman
and the employer may agree; Provided that where a workman
ordinarily received his earnings at intervals of less than a week the
employer shall not be required to pay compensation at intervals or
less than one week.
(3) Any decision or direction of the Labour Commissioner given
under sub-section (1) or (2) as to the apportionment or payment of
compensation may, on application to the Court be made an order of
the Court.
(4) An appeal shall lie to the court against any decision or direction
of the Labour Commissioner given under this section.

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(5) Where it appears to the Labour Commissioner that, on account of
variation of the circumstances of the various dependants or for any
other sufficient cause, an apportionment or direction as to payment of
any sum so apportioned made under sub-section (1) or (2) ought to be
varied, he may direct that the apportionment or direction shall be
varied in such a manner as in the circumstances of the case he may
think just, provided that where the former apportionment or direction
has been made an order of the Court the power to make such variation
shall devolve upon the Court.
(6) Subject to sub-section (6), any order or direction of the Court
under this section shall be final.

Agreement as to compensation payable to workman

(1) Subject to the approval of the Labour Commissioner as to the

terms, the employer and the workman may agree in writing as to
the compensation to be paid by the employer; such an
agreement shall be in triplicate, the original of which shall be
retained by the Labour Commissioner, one copy shall be kept by
the employer and one copy shall be kept by the workman.
(2) An agreement made under sub-section (1)-
(a) Shall not provide for a lesser amount of compensation than is
payable under this Act;
(b) Shall not be binding against the workman unless it is endorsed by
a certificate of an authorized officer that he has read over and

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 explained to the workman the terms therefore and that the workman
appeared fully to understand and approve the agreement;
(C) May, on application to the Court, is made an order of the Court;
(d) Shall not be subject to any stamp duty.
(3) The Court may, notwithstanding that an agreement made under
sub-section (1) has been made an order of the Court, on application
by any party to the agreement within three months after the date of
the agreement, cancel it and make such order (including an order as to
any sum already paid under the agreement) as it may think just, if it is
proved-
(a) That the sum paid was or is not in accordance with sub-section
(1) or sub-section (2) (a); or
(b) That the agreement was entered into by mistake or in ignorance
as to the true nature of the injury; or
(c) That the agreement was obtained by fraud, undue influence,
misresprentation or other improper grounds for avoiding it.

Accident Arising Out of and in The Course of Employment

An accident arising out of employment implies a casual connection

between the injury and the accident and the work done in the course of
employment. Employment should be the distinctive and the proximate
cause of the injury. The three tests for determining whether an accident
arose out of employment are:

1. At the time of injury workman must have been engaged in the

business of the employer and must not be doing something for his

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 personal benefit;
2. That accident occurred at the place where he as performing his
duties; and
3. Injury must have resulted from some risk incidental to the duties of
the service, or inherent in the nature condition of employment.

The general principles that are evolved are:

1. There must be a casual connection between the injury and the

accident and the work done in the course of employment;
2. The onus is upon the applicant to show that it was the work and the
resulting strain which contributed to or aggravated the injury;
3. It is not necessary that the workman must be actually working at
the time of his death or that death must occur while he was
working or had just ceased to work; and

4. Where the evidence is balanced, if the evidence shows a greater

probability which satisfies a reasonable man that the work contributed to
the causing of the personal injury it would be enough for the workman to
succeed. But where the accident involved a risk common to all humanity
and did not involve any peculiar or exceptional danger resulting from the
nature of the employment or where the accident was the result of an
added peril to which the workman by his own conduct exposed himself,
which peril was not involved in the normal performance of the duties of
his employment, then the employer will not be liable.

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 In the case of V. Jayaraj v. T.P Transport Corpn. Ltd.1
Where a conductor working in state owned transport corporation lost
his hearing capacity due to shock received by him in an accident in
the bus in which he was working. He claimed compensation under
item 6 in part 1 of schedule 1 of the workmen’s compensation Act.
The commissioner fixed the loss of sensorineural hearing loss on right
ear and 73.5% hearing loss on the left ear. Hence the appeal under
section 30 of the workmen’s compensation Act was filed.
It was held that loss of earning capacity has to be calculated in terms
of permanent partial disability which the workmen has been subjected
to. The fact that the workmen are continued in the employment and
gets old wages will not absolve the employer from paying the
compensation. The employer may continue him in the old post and
give him old wages by way of grace, but that would not disentitle the
employer to claim compensation. It was observed that fixing of loss
of earning capacity at 20% by the commissioner cannot be upheld.
Having regard to the fact that the appellant had lost the hearing in the
right ear at 100% and in the left ear at 73.5% the loss of earning
capacity, could be fixed at 60% which will come to Rs. 17640. Thus
allowing the appeal the amount of compensation was enhanced by the
High court.
The Management of Sree Lalithambika Enterprises v. s. Kailasam2
It has been held that loss of earning capacity is not confined to the
present capacity. Merely because the employer pays the same salary
to the workmen, it cannot be stated that there is no loss of earning
capacity. If the law were to be so, the employer can easily evade the
provisions of the Act by continuing the employment on the same
1
(1989) II LLJ 38 (Mad)
2
(1988) I LLJ 63 (Mad)

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 terms as were enjoyed by the workman prior to the accident. Nor
again can it be said that if in future the workman is compelled to seek
employment at reduced wages, he can claim compensation. That
would result in the negation of the beneficial provisions of the Act.
Further, if the management winds up its business, the workman will
be in the lurch because no person will give employment to a person
who had suffered the injury of loss of four fingers in the left hand. It
was also held that accident taking place on a holiday in the course of
cleaning the machinery is an accident in the course and out of
employment.
In Madan Mohan Verma v. Mohan Lal,3
Where Mohan Lal was employed by Madan Mohan Verma as
mechanic for installing a cotton ginning machine and chaff cutting
machine on the daily wages of Rs.15. while Mohan Lal was taking
the trail of the chaff cutting machine his rights hand got stuck into
the teeth of gear roller of the machine and all his fingers and thumb of
his right hand were cut off resulting in total disability of a permanent
character affecting his future earning capacity as well. He was
engaged for three days and the accident took place on third day. He
claimed for compensation but the employer declined to give any
compensation on the ground that Mohan Lal was not a workman
because he sustained the injuries while he was cutting his own fodder
and the employment was of casual nature. He was merely to install
the machine and his employment ceased on third day when he
sustained the injuries. The commissioner rejected the case of
employer. In appeal the Allahabad high court held that fixation of the
machine and taking of trials were all part of the business of the
employer. The mere ground therefore that Mohan Lal had been
3
(1983) I LLJ 322 (Alld)

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 employed merely to install the machine could not take him out of the
purview of the definition of workman.

Amount of compensation
(1) Subject to the provisions of this Act, the amount of compensation
shall be as follows, namely:
(a) Where death results from the injury an amount equal to4 (fifty per
cent.) of the monthly wages of the deceased workman multiplied by the
relevant factor; or an amount of (eighty thousand rupees), whichever is
more?
(b) Where total permanent disablement results from the injury an
amount equal to5 (sixty per cent.) of the monthly wages of the injured
workman multiplied by the relevant factor; or an amount of (ninety
thousand rupees), whichever is more;

4
Subs, by Act 30 of 1995, sec. 4, for “forty per cent.” (w.e.f. 15-9-1995).
5
Subs, by Act 30 1995, sec. 4, (or “fifty per cent.” (w.e.f. 15-9-1995).

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 Conclusion

The modern system of workers' compensation is so complex and

arcane it produces considerable grief to those who must deal with it
on a daily basis. Yet these often cumbersome regulations are so
ultimately vital to society they appear, in one form or another, in all
industrialized nations. A look at workers' law over the years
demonstrates the failure of the historical alternatives to formal
workers' compensation systems to meet either the goals of social
justice or economic efficiency. While the orthopedic surgeon may
often lament the difficult compensation case appearing in clinic, it
may add some perspective to review how and why this system
became entrenched in the workplace.

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 Bibliography

1- Labour law – S.C. Jain

2- Labour law – Avtar singh

Website

http://www.ncbi.nlm.nih.gov
https://dwd.wisconsin.gov

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