Industrial Relations
Sr. Manager- Human Resources
Raju Aggarwal
Assistant Manager Hr & Admin
Private Consultant On Labour Laws
+1 Other

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Dear Seniors,
As employee contributes for ESIC Facility. So, is this possible to deduct Workmen Compensation Insurance Premium from Employee's Salary. Do we have any concrete communication regarding this? As clients are generally not willing to deduct the same.
Need Clarification, please help.
Best Regards!
Vikram Aditya Singh.
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WCP is not compulsory but the employer has to pay the compensation as per Employees Compensation Act in case of any eventualities to the employees at work place. It is a statutory requirement. Not deductible from the employees.
Dear Vikram
Mr. Pon has given you the apt reply. The WC Policy is not required for any employee. It is required for the company. In case of any accident, the company will have to bear the cost of treatment and compensation part. To have the financial support to the company (to have relief from such huge expenditure), the company is taking the WC Policy. Whether the company took the policy or not, it is not at all considered. The company will have to pay the medical treatment cost and other compensation which is to be paid to the victim.
The Workmen compensation is a liability of Employer in case in case of accidents while on duty if the company is not covered under ESI Act or to the employees out of the purview of ESI Act ( not covered by ESI Act)
As Such the Employer has to bear the cost of WC insurance policy, they should not deduct from the employee..
Dear Vikram,

At the outset let me make it clear that you should not equate both the Acts, both are different in terms of benefits,the administartive authorities, manner of compliance etc.You are right an employee & employer requires to contributes under the ESIC scheme for availing the facilities.But remember that one can not have choice of choosing either one of the Acts, The Employee's Compensation Act 1923 (earlier known as Workmen Compensation Act 1923) is applicable only, where ESI scheme is not implemented. The Employee's Compensation Act 1923 does not require any body either the employee or the employer to contribute,but first you have to examine whether the Act is applicable to your organisation. Section 2 (1) (dd) defines an employee, besides there is a Schedule II annexed to the Act, which specifies as to who is an employee.Section3 of the Act stipulates that if personal injury is caused to an employee by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of the Chapter II of the Act.

I hope, I am able to clear your doubt.

BS Kalsi

Member since aug 2011
In which types of work WC policy is applicable? is it applicable for more then supervisory level work.
My dear Agarwal,
The Employee's Compensation Act 1923 does not specify the profession or occupation under the Act rather the Act has defined a list of employee under Section 2(dd) and Schedule II, which specifies a list of persons,who are included under the definition of employees.
As regards you second query, I am of the opinion that all categories are covered under the Act after the amendment vide Act 45 of 2009.
BS Kalsi
Member since Aug 2011
I don't know what this discussion is all about. Once a employee is covered under ESIC no workman compensation in addition to it is required. Employers now a days go for Accident policy instead of workman compensation which is much beneficial to WC Policy.
Moreover the liability of compensation lies on employer and no deduction can be held from employees.
Hope this satisfies your query
V S Chauhan
Dear Chauhan,
I was rather suprise to note you observations that "I don't know what this discussion is all about". Rather showing your ignorance, you should have seen the query as well as subsequent responded mails before subsribing your expert comments.I fully agree to your vews that "once a employee is covered under ESIC, no workman compensation in addition to it is required and liability of compensation lies on employer and no deduction can be held from employees".
I couln't exactly make out from your another statement where you have said that "Employers now a days go for Accident policy instead of workman compensation which is much beneficial to WC Policy". Do you mean to say that one can replace workman compensation with Accident policy ? If you mean so,I feel you are wrong as statutory provisions under the Employee's Compensation Act, 1923 are mandatory,which can not be replaced by any kind of accident policy.
BS Kalsi
Member since Aug 2011
Thank You Seniors. I have received the proper and matching responses and forwarded the same to my seniors and compliance team. This updates my knowledge too. Best Regards!
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