Calculation on employees compensation - lost his first phalanx of index finger arising out of employment

Dear Professional Colleagues,

An employee lost the first phalanx of his index finger during the course of employment. His salary is Rs. 27,000 and he has been working for the past 5 months. How should we calculate the employee's compensation?

Michael Nicholas

The loss of earning capacity for the loss of the first phalanx of the index finger is specified as 9% in Schedule 1 of the EC Act 1923. This is subject to the fact that the injury has not affected the due discharge of his function in the organization.

To calculate the compensation for such an injury, first calculate the amount equal to sixty percent of the monthly wages of the injured employee (subject to a ceiling of Rs. 15,000) multiplied by the relevant factor (Say A). The "relevant factor," in relation to an employee, means the factor specified in the second column of Schedule IV against the completed years of the age of the employee on his last birthday immediately preceding the date on which the compensation fell due. Then multiply A by the loss of earning capacity.

For instance, for a 45-year-old injured person, the compensation would be (Rs. 15,000 X 60/100) X 169.44 X 9% = Rs 1,37,424.60

Thank you for providing the great formula, and I have calculated accordingly for my senior workmen.