The Workmen's Compensation Act, 1923

By Saroj Singh|Updated : March 6th, 2020

The earliest step in the field of social insurance in India was the passing of the Workmen’s Compensation Act in 1923. It laid down the scales of compensation to impart precision to the benefits provided under the act. The Workmen Compensation Act, 1923 is one of the pioneering acts has been enacted to safeguard the rights of a worker at the workplace against the accidental injury.


The Workmen’s Compensation Act, 1923

Workmen’s Compensation Act is one of the most important social security laws in India. It is applicable to the cases where such incidents lead to either death or permanent disablement of the worker.  The main aim is to provide financial protection and assistance to the workers and their dependent’s through compensation in case of any accidental injury occurred during the course of employment.

Applicability of the Workmen’s Compensation Act

The Act has been amended several times from 1924 onwards to 1976. This act does not apply in areas where the employees State Insurance Scheme operates.

  • The section-I of the Act implies that the Act is applicable to the whole of India.
  • The act applies to persons who are working abroad or outside India as per Schedule II of the Act.
  • As per Section II, it applies to all employees working in mines, factories, plantations, construction establishments, railways, manufacturing or handling of explosives, oilfields, etc. Moreover, it applies to establishments which are under Schedule II of the Worker’s Compensation Act.
  • Under Section III, the workmen or their dependents shall be entitled to compensation under the Act in case of injury/accident arising out of and in the course of employment and resulting in

- Total disablement

- Partial Disablement

- Death

- Permanent total disablement

 Employer’s liability (Section 3)

  • An employer shall be liable to pay the compensation in cases of injury by accident during employment and contracted diseases in occupation.  
  • An employer shall not be liable to pay for the compensation in case of any injury or damage which does not lead to the semi or total disablement of the workers for a period exceeding 3 days.
  • In case of any injury which does not result in death or permanent total disablement under the following circumstances:

- the workman present at the time of the work under the control of drink or drugs

- when the worker deliberately disobeys the rule, which ensures their safety

- non-application of the devices which are especially for the safety of the workers.

 Compensation Determination (Section 4):

 Detailed provisions are given defining permanent and partial disablement of a worker in the Act under Section 4, and accordingly, the amount of compensation is settled to a worker.

  • In case of injury leading to Death: An amount equal to Fifty Percent of the monthly salaries of the dead employee multiplied by the appropriate factor or with the amount of Rs.80,000 or more.
  • In case of injury leading to permanent total disablement: An amount equal to 60% of the monthly wages of the injured workmen multiplied by the relevant factor or an amount of 90,000 or more.

  • In case of an injury occurring in permanent partial disablement: In this case of permanent disablement due to injury, an amount equal to the percentage of loss of earning capacity is given to the disabled.
  • In case of injury leasing to temporary disablement: According to Section 4(2), Half-monthly payments is given which is equal to 25% of the worker’s compensation.


Limitation Section (10):

Workman, to the Commissioner, may file the claim for accident compensation in the prescribed form, within 2 years from the occurrence of the accident or from the date of death.

Contracting Out (Section 17):

Any contract or agreement which makes the workman give up or reduce his right to compensation from the employer is null and void insofar as it aims at reducing or removing the liability of the employer to pay compensation under the Act.

Reference to Commissioners (Section 19):

Any question arises in any proceedings under this Act as to the liability of any person to pay compensation or as to the amount shall be settled by the Commissioner.

Appeal (Section 30):

An appeal shall lie to the High Court from the following orders of a Commissioner within 60 days of the order of the Commissioner.

In conclusion, the provisions of Workmen’s Compensation Act, 1928 ensures that it is one of the important legislation safeguarding the rights of the workmen at the workplace and in case of any mishappenings – accidents leading to partial or permanent disablement, they and their dependents can be fairly compensated. It makes the employer liable for compensation. Also safeguards his rights whether the damage is actually caused to the worker. So, it is an important Act ensuring social security in India.  

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