Who's Liable To Pay Compensation Under WC Act. - CiteHR
Officer Hr At Western Refrigeration Pvt.
Private Consultant On Labour Laws
2nd Year Pgdm(hr) N Mll &sw

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Dear All,
Please help me to know that, who pays the compensation to the worker's legal heirs in case of death (insurance company or employer), under workers compensation Act.
Vishal Saundankar

Dear Vishal Please let the forum know the exact case of the employee to give you appropriate replies
Dear Vishal Saundankar,

First of all let me correct you mentioning that The Workmen's Compensation Act has been renamed as Employee's Compensation Act vide an amendment Act of 45 of 2009 made effective from 18.01.2010. As per Section 3 of the Employee's Compensation Act, the employer is liable to pay the compensation to an employee for any accident arising out of and in the course of his employment causing personal injuries or resulting in death. The insurance policy covers statutory liability of an employer for the death of or bodily injuries or occupational diseases sustained by the workmen arising out of and in course of employment.The insurance policy gives an indemnity against legal liability for an accident to employees under Employee's Compensation Act. The agreement or contract is between an employer and the insurance company.Let me make it further clear the if the death has been caused by an accident arising out of and in the course of his employment, the amount of compensation shall not be paid directly to the legal heirs rather the same shall be deposited with the Commissioner under the Employee's Compensation Act.

Note-My reply is based on the presumption that the death has occurred due to an accident arising out of and in the course of his employment, though you have not mentioned the reasons of the death.

BS Kalsi

Member since Aug 2011

Dear Kalsi,
But how to calculate the compensation amount in case of death and what its limit? And if the insurance amount is less than amount resulted from calculation then who will pay over and above amount?

well to calculate the compensation in case of death would be 50% of monthly wage of the workmen multiplied by relevant factor or an amount of 1,20,000(i think first it was 80000 and now it has been changed) whichever is more .Relevant factor will depend on the age of the workmen and all
Dear Hemant,

Let me first make it clear that payment of compensation is a statutory liability of an employer as such any short fall in the the insurance amount resulting from calculation shall have to be borne by the employer, which have been explained in details in my earlier mail.

The amount of compensation shall be as follows, namely:--

(a) where death results an from the injury :-an amount equal to fifty percent of the monthly wages of the deceased multiplied by the relevant factor; or an amount of one lakh and twenty thousand rupees,

whichever is more;

The relevant factor is the factor specified in the second column of 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.

If the monthly wages of the deceased are above Rs 8000/-, the calculations of the compensation shall be done as if he was drawing Rs 8000/-per month.

BS Kalsi

Member since Aug 2011

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