Is an Accident in the Company Cab Covered by Workers' Compensation?

Hi, I would like to know if an accident happened in the company cab while returning from the office is covered under the workers' compensation act.

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Company-Provided Vehicle and Employment Contract

Traveling in a company-provided vehicle is a part of the employment contract. It is therefore implied that the employee is on duty when an accident occurs. As such, compensation as per the Workmen's Compensation Act is applicable in such cases.

Amendment to the ESI Act

By a recent amendment to the ESI Act, an accident occurring while the employee is traveling to the office or from the office to their residence will be treated as an accident while on duty. This is applicable provided that the time and route where the accident takes place align with the employee's routine route and time.

Regards,
Madhu.T.K

Travelling in a company-provided vehicle is a part of the employment contract. It is, therefore, implied that the employee is on employment when the accident takes place, and as such, compensation as per the Workmen's Compensation Act is applicable in such cases.

Recent Amendment to the ESI Act

By a recent amendment to the ESI Act, an accident happening while the employee is undertaking his journey to his office or from his office to his residence will be treated as an accident while on duty, provided the time and route of the accident align with the employee's routine route and time.

Regards,
Madhu.T.K

Even before the ESI (Amendment) Act 2010, which is yet to come into force, as per the provisions of Section 51-C of the ESI Act, an accident happening while traveling in the employer's transport or in any other transport as a passenger with the express or implied permission of his employer is deemed to arise out of and in the course of employment, and the employee is eligible for disablement benefits.

The new amendment treats accidents happening when traveling in other than the employer's transport, i.e., own vehicle or public transport, etc., while coming to work or returning home after work, as a notional extension of employment for eligibility for disablement benefits.

Regards,
Ramanamurty, Hyderabad.

ESI and Workmen's Compensation Coverage

The earlier provision of ESI was restricted to injuries arising out of accidents while the employee is traveling in connection with his employment, such as going to the bank to withdraw or deposit company money, filing returns, etc. However, injuries arising out of accidents while commuting to the office or back to his residence were not considered as injuries arising out of employment. Certainly, years back such a provision had existed which has been reintroduced now.

Compensation under the Workmen's Compensation Act is restricted to a sum calculated considering the loss of earning capacity, and there is a cap to the amount as well. A claim of Rs 2 crores may be entertained by raising the same through MACT (Motor Vehicles Claim Tribunal) and not through Workmen's Compensation.

Regards,
Madhu.T.K

From what I read, the employee is trying to exploit the situation (very common in the USA). As others have pointed out, the company is liable. You may have to hire a good lawyer to handle the claim in a labor court.

Preventive Measures for Employee Safety

I suggest the following preventive measures not only for your company but other companies too:

1. Employees should use the company cab/vehicle only for official purposes. Hitching a ride for personal work should not be permitted.
2. Cover all employees under the PAI (Personal Accident Insurance). The premium is typically around Rs 250 per employee and covers accidents outside premises while coming to and going back from work.
3. Ensure that all contracted vehicles used for company purposes are registered, and the drivers are covered under ESI.
4. Prevent/avoid road travel for all employees after dark.

Please see the clarifications.

a) In the Indian judicial history, for a motor vehicle accident resulting in the death of an individual, there are no citations available for having granted compensation to the tune of 2 crores.

b) Since the accident has happened in the cab provided by the company, it is considered as "Accident while in the course of employment."

c) However, the claim can be made not directly on the company in any case, as these will be covered by the motor vehicle insurance. Apart from WC, the company has no legal binding to pay any other compensation, whatever case the employee makes.

d) Also, there are instances where courts have restricted claiming/combining of insurance/compensation from more than one insurance agency. In these cases, compensations have been limited to the highest available amount from a specific policy.

e) If the company has continued to provide employment to the person with the same salary, then the claim based on the loss of earning capacity becomes weak. However, he/she may claim that due to the accident, his capacity to perform the job is affected, which does not stand in the eyes of the law since his employment continues.

Kind regards,

Dayanand L Guddin

Advisor HR

BOBST INDIA

PUNE

The notional theory of extension is applicable in this case, though it ought to be proved that the employee was traveling straight home and not home via personal work. In case of the latter, he would lose the lien and not be fit for compensation.