Whether ex-gratia amount, can be deducted from the compensation awarded under the Employee’s Compensation Act?

Whether ex-gratia amount, which is not paid in accordance with the statutory provisions, can be deducted from the compensation awarded under the Employee’s Compensation Act?

As per the Industrial Disputes Act, when a benefit is given to an employee, it cannot be withdrawn or taken back. The ex-gratia amount already given cannot be taken back and deducted from the compensation awarded under the Employees' Compensation Act.

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Any amount paid as compensation to a person involved in an accident by the employer directly cannot be taken back or adjusted when the final compensation is given under the Employee Compensation Act.

The only way you can adjust it is if it was given as an advance under humanitarian grounds, with the prior written approval of the concerned labor commissioner.

In fact, even if the full compensation is given but directly, the Labor Commissioner is required to ignore the same and ask the employer to give the entire amount again.

The ex-gratia amount, which is not paid in accordance with the statutory provisions, can not be deducted from the compensation awarded under the Employee’s Compensation Act.

The Section 8(1) of WC Act, No payment of compensation in respect of a workman whose injury has resulted in death, and no payment of a lump sum as compensation to a workman or a person under a legal disability shall be made otherwise than by deposit with the Commissioner, and no such payment made directly by an employer shall be deemed to be a payment of compensation. Provided that, in the case of a deceased workman, an employer may make to any dependent advances on account of compensation not exceeding an aggregate of one hundred rupees, and so much of such aggregate as does not exceed the compensation payable to that dependent shall be deducted by the Commissioner from such compensation and repaid to employer.