Understanding New Employee Compensation Act Changes: How Are Claims Calculated Now?

Employee Compensation Act Changes

As per the new notification of the Employee Compensation Act, certain changes have been made in claim calculation. In case the employee loses their life, the amount shall be equal to Rs. 1,20,000 or 50% of the employee's monthly wage multiplied by the relevant factor, whichever is higher. If, by accident, the employee is left totally incapacitated, then Rs. 1,20,000 or 60% of the employee's monthly wage multiplied by the relevant factor shall be paid as compensation, whichever is higher.

How do we arrive at the amount of Rs. 1,20,000, and what is the relevant factor?

Gratuity Calculation for 4.8 or 4.9 Years

How to calculate gratuity when it comes to 4.8 or 4.9 years? What is the basic rule depending on the number of working days?

SL/CL Under Which Act

SL/CL is mentioned under which act, and how many are allowed in a year?

Factory License Renewal

As per the Factories Act, how much time before expiry do we have to apply for the renewal of a factory license?

Continuous Service as per I.D. Act 1947

In simple words, not as written in the act, what is Continuous Service as per the I.D. Act 1947?

Dear Sandeep, I hope you consider this reply as a response to your private message to me as well.

Correction on Compensation Calculation

A minor correction to the statement in your question no. 1: The amount of compensation for permanent total disablement resulting from the injury mentioned under Section 4(1)(b) of the Employees Compensation Act, 1923, as per its 2009 amendment, is an amount equal to 60% of the monthly wages of the injured worker multiplied by the relevant factor or an amount of INR 1,40,000, whichever is higher.

Understanding the Relevant Factor

Regarding the relevant factor referred to in Section 4, you need to refer to Schedule IV appended to the Act. The schedule contains the factors for calculating the lump sum equivalent of compensation in cases of permanent disability and death based on the completed years of age starting from 16 to 65 or older. When calculating the compensation amount under Section 4(1)(a) or (b) by multiplying 50% or 60% of the wages by the relevant factor corresponding to the age, it shall be INR 120,000 or more, or INR 140,000 or more, respectively. A "Schedule" is a part of an Act, providing detailed explanations on how the Act's provisions are to be implemented. It is essential to thoroughly read every schedule in relation to the corresponding sections of the Act.

Gratuity Calculation Clarification

Section 4(2) specifies that for every completed year of service or part thereof exceeding 6 months, gratuity must be paid. This implies that 4.8 or 4.9 years shall be considered as 5 years. I am unclear about the second part of the question.

Leave Policies Under Various Acts

Sick leave (SL) and casual leave (CL) are commonly available under the Shops and Establishments Acts of almost all states in India but with varying scales. It is advisable to refer to your state's specific Act. You may also consult your State Factories Rules.

Continuous Service Definition

The statutory definition of "continuous service" in Section 25-B of the Industrial Disputes Act, 1947, differs from the colloquial meaning of the term. The statutory continuous service of 240 days or 180 days includes the permissible interruptions stated therein.