Accident while on the way to office - Are we in any other means or laws Liable?

Dear all,

Our factory is located in the middle of a village where there is no ESI hospital coverage (and we don't cover them with ESI on their payrolls). Three of our members met with an accident on the highway. Other members passing by took them to the hospital, and our MD has paid all the expenses so far for their medical treatments and operations. "I believe since the accident took place outside my factory, we are not liable for them."

My question is, "Are we liable in any other means or laws?"

Please suggest.

Since ESI coverage is not available, you can opt for Group Medical Insurance and Group Personal Accident coverage. Many insurance companies offer good packages that cover existing problems of employees such as diabetes, high blood pressure, etc.

There are certain insurance brokerage firms like Marsh India that negotiate with the insurance agency on the premiums to be paid. You do not have to pay any amount to the insurance brokerage company. Please look into this and consider implementing it. This coverage can include 1 employee, spouse, and 2 children. This gesture will greatly boost the morale of both the company and the employees.

As the Managing Director is a nice person, he will likely approve this facility. Wishing you all the best.

Sundararaman, B
Chennai

Your query is unclear. In your communication, you are stating, "where there is no ESI hospital coverage (and we don't cover them with ESI on their payrolls)." It is not clear if your factory is located in the geographical area notified under the ESI Act. Stating that it is situated in the middle of the village raises questions. The precise location within the village, whether in the middle or at the end, is irrelevant. When you mention, "we don't cover," it is not a matter of choice; it is mandatory to cover all employees, including contract workers, receiving salary/wages below Rs. 15,000. The ESI Act has been amended to consider accidents during commuting to and from work as work-related, entitling covered individuals to benefits.

Under the EC Act, victims have the right to claim compensation, and the Commissioner will decide based on the case's merits. You have not provided information on whether the victims were traveling in a vehicle provided by the factory. Responding to your query is not as simple as stating, "no, you have no responsibility."

I understood your question. I think you would be aware that the Workmen's Compensation Act will come into force when ESI coverage is not there, right?

Now, to determine whether you are liable for compensation under the W.C. Act, you need to find out the distance from your office where the accident occurred. I remember a case law that an accident occurring within a 1.5 km radius from the workplace is construed to be an accident arising out of employment. Beyond this distance, it will not be considered, and the employer will not be responsible to pay compensation.

Balaji

Wherever there ESI is not in force, workmen's compensation is mandatory for a factory. Workmen's compensation covers work-related accidents only. If you take a group personal accident policy for all employees, it will be beneficial for all employees. But you should state that the policy should cover 24 hours and not only while on duty. If you send the exact sequence, we will be able to tell you what your liability would be.

Regards,

Krishna Rao
Email: premiuminsurance@gmail.com

As per the law, when an employee is commuting to the office from home or leaving the office after work hours, if an accident occurs, the responsibility lies with the management.

Please refer to the attached document, which is the latest amendment on the ESI Act (July 2010). Point number 3 is relevant to the discussion.

Regards,
Shweta

If the employees are coming in company's vehicles or company-arranged vehicles, the employer is liable to pay. Moreover, when employees are not covered under ESI, they should be covered under Workmen's Compensation Act alternatively.

Since three employees had an accident altogether, it seems all were coming in company-arranged transportation.

If you don't have the coverage of compensation for employees regarding accidents under ESI, then you should introduce the Group Health Insurance Scheme in your company to facilitate the employees. This way, you can avoid involving your employer day-to-day, making it easier for the HR/Personnel department. Group Life Insurance is essential for all organizations in Pakistan, and the Compensation Act will apply if there is any amputation, injury, or death within the organization during working hours or while traveling to or from the office.

Sincerely, Tanveer Ahmad Malik

Dear All,

As per the Workmen's Compensation Act, the employer is responsible for compensation as the intention of the employee was towards his workplace.

Regards,

Recently, ESI has covered a pension scheme for those who have met with an accident, whether the events occur when coming from home or going home. In my view, it is expected that the compensation act will also be applicable. My advice is to consider obtaining a Group Insurance scheme for your employees from an insurer such as United India Insurance Company, etc. This will provide assistance to those who are not covered by ESI.

Regards,
G. Prabhakar

Workmen's Compensation Act is now called Employee's Compensation Act. There is no precise definition of an accident which has occurred in the course of employment or arisen out of employment. A great deal depends on the facts related to the accident, such as how close the spot of the accident was to the factory, whether it was the only route available to the factory, and the time of the accident - was it close to the duty hours, etc.

Dear Sir,

The only questions are:
(1) Whether those employees are on employment rolls at the time of the accident?
(2) Were they on the way to report for work?
(3) Was the accident not a false and fabricated one?
(4) Was the hospital stoppage prolonged for more than 3 days?

If the answer is YES, the employer is bound to pay the compensation as that accident should be treated as if those employees were on duty, and the "Principle of Notional Extension" has to be considered by the Management.

Dear Sir,

If those employees are on the rolls and they are on the way to report to work, and the hospital stoppage is prolonged for more than 3 days, and the accident was not false or fabricated, the employer is bound to pay the half-monthly compensation as per relevant statutes, considering the PRINCIPLE OF NOTIONAL EXTENSIONS.

Jagdish.K. H.R Consultant, Corporate Links, Kochi. +91 9947662384

Very simple: take out a group insurance cover for all the employees. Ask for cashless hospitalization cards from the insurance agents; they will guide you.

This is what makes a difference to work in a public sector company. In such a similar case, my company not only bears all the medical expenses but also grants official disability leave. This case is treated as an injury on duty. As mentioned earlier, try to compensate your company by taking out group accident insurance. This will boost your employees' morale.

Regards,
Subhendra Mishra
NALCO

When there is no Employees' State Insurance (ESI) coverage for the locality where the factory is situated, the Employees' Compensation Act (formerly known as the Workmen's Compensation Act) will apply. In this act, it is clearly mentioned that an accident that occurs while working or during the course of employment is considered an industrial accident. In your case, if an accident happens while commuting to work or returning home after work, it is your responsibility to take care of medical expenses as well as any compensation if disability occurs.

The 1 km radius clause that was applicable to ESI as per a court judgment has now been removed. In the recent amendment to the ESI Act, any accident that happens while working and during the course of employment is deemed an industrial accident, provided that the nexus between the circumstances, time, and place of the accident is taken into consideration.

Regards,

Udayakumar G

9443628322

Please review the corrected text below:

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You, please go through the Workmen's Compensation Act before making any decisions.

Regards,

Balkishan Sharma

Manager, HR

Paras Healthcare

Mr. Rao,

Can you please clarify, if an employee residing approximately 15-20 kilometers away from the office meets with an accident near his turning while heading to the office in the morning, who would be liable for compensation?

Similarly, in a scenario where an employee (for example, in a place like Bombay) departs from the office (located in Churchgate) and encounters an accident near Virar/Borivli, would it imply that the employer is accountable for providing compensation?

Balaji

Dear all,

If there is no coverage of ESI for the location where the employee is working, then we have to take another insurance for them, either it is workmen compensation or group insurance. As per workmen compensation policy, it is mandatory to cover employees under insurance.

In the above case, the present employer is not liable under the ESI act because of non-coverage. However, when it comes to workmen compensation policy, the employer is liable for the employee benefits. If a particular employee complains to the labor officer, the employer will face problems.

All of this depends on the type of your business (factory establishment or outsourcing or other), and the number of employees working. For that, you have to provide sufficient information for a better solution.

If an employer is liable to pay workers' compensation, is there any percentage of contribution required from the employer's end? Additionally, are there any salary slabs that determine eligibility to receive compensation?

Regards,
Daniel

Dear All HR,

Please, be a human being first and then an HR. If a person is working for a particular company, the company is responsible for his happiness and sadness. If he cannot afford treatment, what will a poor person do? Your MD is a good and generous person. Make the workplace a beautiful place. You can set rules for the betterment of the organization. Put yourself in that situation and then ask for suggestions. If you are the sole provider for a family to feed, imagine yourself in his situation, and you will understand how challenging it is. I am mentioning this because you stated that he is your factory worker.

Therefore, please understand the situation before making decisions. This is a humble request.

Thanks

Dear All,

First, I request that those who are not aware of labor laws: please don't reply!!!!

Second, to those who know labor laws: kindly guide everybody properly.

This is a clear case where the Workmen's (now Employees) Compensation Act applies. Apart from all medical expenses, some more amount according to the disability has to be paid by the employer under the act. The amount cannot be paid directly. It should be paid through a mediator only, i.e., Workmen Compensation Commissioner only. Also, you must report about the accident within one month to the local labor office and Workmen Compensation Commissioner.

Please read the act for further information.

There is one more point: In case of an accident, the employer can make the insurance company a party and liable to pay the amount. The insurance company is the Vehicle insurance company that had done third-party insurance of the vehicle by which your employee gets hurt.

Advice to all HR Practitioners: then read the advice made by Pinki and others about "Placing yourself in the situation." I will say "Use Empathy."

Read all labor laws for more clarity on the information.

Regards,

Manish Gupta
Manager - Admin & HR
GINI & JONY LTD.

Dear Sir,

The only questions are:
(1) Whether those employees are on the employment rolls and not on any authorized leave at the time of the accident?
(2) Were they on the way to report for work?
(3) Was the accident not a false and fabricated one for getting the benefits?
(4) Was the hospital stoppage prolonged for more than 3 days?

If the answer is YES, the employer is bound to pay the compensation as that accident should be treated as if those employees were on duty, and the "Principles of Notional Extension" have to be considered by the Management, even though the employer is technically NOT obligated to pay any compensation.

Rest of the proceedings are as per statutes since the question is whether the employer is liable to pay the compensation.

Hi,

When an employee is on the way to the office and then has to return home, whether they are covered by insurance or not covered by ESI, the employer still has the responsibility in case of an incident. This responsibility applies provided the employee is not under the influence of alcohol, sleeping pills, or any similar substances, which can be verified in medical reports.

Therefore, it is essential for the employer to clearly outline this in the standard HR policy of their establishment.

Regards,
Venkat
HR Head

Dear Friends,

The first question is whether the industry is covered under the ESI Act or not. Secondly, even if it is covered, as the employees are not on duty, they are not eligible for any medical benefits under ESI. The management only, on humanity, considers their medical treatment bill. It is not obligatory under any law.

Please also note that the Workmen's Compensation Act applies only when the incident takes place within the company premises. If the employees meet with an accident outside the factory premises, they should be on official work.

In the interest of the employees, the management should have some insurance policy to meet such unforeseen circumstances such as this accident.

In our organization, though the employees are covered under the ESI scheme, we have a mediclaim policy for all the employees whether they are covered under ESI or not. The policy takes care of the medical expenses limited to the insured amount.

Hope this will give some picture about your query.

G.K. Manjunath, Manager-HR

Dear All,

First of all, we have to determine whether the factory is located in the area implemented as notified by the Government of India under Sec 1(3) of the ESI Act. If the area is notified and implemented, and the factory employs 10 or more persons, then it will automatically come under the Act. As the Principal employer, you are liable to comply with the provisions of the Act, and the workers will receive due benefits, including coverage for accidents occurring while traveling to and from the office. Willingness or dislike does not affect this obligation.

On the other hand, if the area is not notified, then you will not be held liable for compliance under the ESI Act. Instead, the Workmen's Compensation Act will come into effect, and you will need to proceed accordingly under that Act. If the ESI Act applies, the Workmen's Compensation Act automatically ceases.

With regards,

Sanagapalli VR
Asst Director (Retd)
ESI Corporation

Our factory is located in Pathiri (NH 45) (Trichy - Chennai High Road).
I checked with our Deputy Inspector of Factories. We don't have a government or private hospital within a radius of nearly 15 km.
Could you provide more suggestions on this? I am not able to understand where I should go to get this ESI registration.

Is there a law that says so, sir? Please suggest. Firstly, the accident itself is a problem. The bike they were traveling on was in triples.

Accident took place early in the morning. All three individuals were commuting from the company guest house to the factory, riding together on their personal bikes.

Dear sir,

Traveling on a bike with three people is not lawful. We have incurred all the expenses for the hospital so far.

I would like to know:

1) Are they going to be on leave for the next 2 months, as confirmed by the doctors' reports? How should I mark their attendance?

2) All three of them are on probation. Should I pay them a salary for this leave period?

3) After their leave, what medical documents should I collect from them, etc.?

Please advise, sir.

Yes, you are right that the company is not eligible to pay the expenses. It's a goodwill gesture from your higher management. I appreciate it!

Dear Pinky,

It's very nice of you. I understand your love and care towards people. But, as an HR professional, there are documentations and laws to consider. We have already offered assistance to them so far. All I request is to ensure that there are no issues for both employees and the employer legally. Thank you.

[QUOTE=Admin_HR;1489910]
Our Factory is Located in Pathiri (NH 45) (Trichy - Chennai High Road).
I checked with our Deputy Inspector of Factories. We don't have a government/private hospital within a radius of nearly 15 km.
Could you suggest more on this? I am not able to understand. Where should I go to get this ESI registered?

Dear Sir,

Please visit the Branch Office of the ESI Corporation in Trichy or contact them by phone to first ascertain whether the village where your factory is located is within the zone of implementation. If it is within the zone of implementation, you can get your factory registered under the ESI Act by submitting Registration Form 01 along with the accident reports in Form No. 12. If the area is not within the zone of implementation, you won't be able to avail of benefits from the ESI Department, and you will have to explore the alternatives available under the Workmen Compensation Act.

Best of luck,
Sanagapalli VR

Dear Admin-HR,

You must take Sanagapalli's suggestions seriously.

Give medical leaves as much as in their account as per the Factory Act and State Holidays & Festival Act.

Issue an immediate notice to them stating that traveling tripling to the factory is not permitted by law or the employer. Thus, it is misconduct, and an inquiry will be conducted once they are able to join the factory.

You must contact the local labor office or advocate regarding labor laws in this regard; they will guide you better on how you can evade the Workmen's Compensation Act. They will tell you how to prove that this accident did not originate from employment.

I had a doubt about one thing as they are living in the Company Guest House.

Best regards, and do update us all on the outcome.

Manish Gupta

Dear all,

Please see if section 3b(ii) and 3b(iii) apply.

Employer's liability for compensation:
3. (1) If personal injury is caused to an employee by an 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 this Chapter. Provided that the employer shall not be so liable—
(a) in respect of any injury which does not result in the total or partial disablement of the employee for a period exceeding three days;
(b) in respect of any injury, not resulting in death or permanent total disablement, caused by an accident which is directly attributable to—
(i) the employee having been at the time under the influence of drink or drugs, or
(ii) the willful disobedience of the employee to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of employees, or
(iii) the willful removal or disregard by the employee of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of employees.

Regards,

Manish Gupta

Dear,

I have read all the replies. Two main issues:

1. The company is liable to pay: The Workmen's Compensation Act & ESIC both state that while an employee is coming to the job or going home after the job, the company is liable to pay compensations if any accidents happen because this duration is called "A person on the job." For further clarification, it is mentioned about the time and distance too. "A place where a person lives (Home) and the workplace distance has no limit now," but the time to reach that distance must be reasonable. So, in this case, the company is liable. If the company is providing transportation facilities (with or without cost), in this case also, the company is liable.

2. Liable for what: Medical expenses (which have already been paid by the company), loss of wages, and other benefits from the date of the accident until resuming duty (yes, the company has to pay), loss of earning capacity (any permanent disability). In this case, the company has to pay compensation as per the Act (ESIC or WC, whichever is applicable to your organization).

Vikas Seth