Contract Not Extended: Are Employees Covered for Accidents on Site?

Sir, if the contract period was not extended and work is still ongoing on the site, and a fatal or non-fatal accident occurs during that time, is employee compensation applicable to the deceased?

The Employee's Compensation Act of 1923 applies whether there is a valid contract or even if the contract period is over. Under the Act, it is the establishment (where the work takes place) that is liable to ensure compliance. The contract enables the principal employer to deduct any compensation paid for the contract labor deployed by the contractor from the contractor.

Sir, compensation has to be paid to the deceased, okay. But, is the company legally eligible to receive the compensation from the insurance company or not (due to the unavailability of a work order extension)? If the work order has expired and not been extended by the principal employer, then are the labor license (valid up to Aug-2023) and WC Policy (valid up to Oct-2023) still valid in the absence of a work order? Please clarify.

The insurance document needs to be reviewed to determine eligibility for compensation from the insurance company. Since the insurance policy is valid until October 2023, it appears that coverage will continue. Is there any issue with extending the contract?

Correspondence with the Contractor
There might be some correspondence requesting the contractor to continue work even though the contract period has ended. Therefore, even without a formal contract, there is a valid contract in effect on the date of the accident.

The Employee Compensation Act is applicable. If there is any insurance policy taken by the employer, it is only to safeguard their interest. As far as compensation is concerned, the employer is liable, and in case the insurance company denies, the liability will remain with the employer.

Sitaramsn Sir, can you please provide a support document that states if the insurance company denies the claim, then the liability will be with the employer? Please let me know.

In this case, there is one principal employer and contractor. Hopefully, the contractor has taken an EC policy which is valid up to October 23. In the meantime, the work order eligibility date to finish the job is over. But work is continuing at the site without any new work order.

It appears to me that without a formal extension, why is the contractor continuing the job? Will the principal employer pay for the extension period of work, or is it part of the earlier work order, and the contractor is continuing its job to get payment from the principal employer?

Whatever the case may be, the query is whether the insurer will pay against the EC policy in the absence of a new work order. Against the EC policy, the claim is raised by the family of the deceased employee with the party insurer and the contractor along with the principal employer. Usually, the EC Commissioner is looking after the merit of the case, and if there is insurance coverage, insurers are paying money as per the award of the EC Commissioner. Whether the work order was valid or not is not the concern of the insurer or EC Commissioner in normal conditions. In my opinion, if any question is raised, then the principal employer may certify the situation.

Regards, S K Bandyopadhyay

S K Bandyopadhyay, Sir, the principal employer is not interested in extending the current work order. The work order's eligibility date to finish the job has passed, yet work is continuing at the site without a work order extension.

Implications of Continuing Work Without a Work Order Extension
If the contract period was not extended and work is still ongoing at the site, what are the implications if a fatal or non-fatal accident occurs?

Currently, there are no gate passes for workmen, no running RA bills, and no valid work order. In this scenario, is employee compensation applicable to the deceased?

Here we are to see the following:

Where the accident took place
- Employer's site. So when it comes to the payment of compensation, prima facie, it is the employer's liability. It is for the employer to prove otherwise. Basically, we are to understand that the EC insurance policy is a safeguard for any accident that took place at a work site for payment or reimbursement of compensation. Please understand that having a policy does not absolve the employer's liability unless the conditions of the accident took place in circumstances where exceptions apply.

In case of an accident resulting in an injury lasting more than 3 days:

1) Workers' Compensation Policy Validity
If the workers' compensation (WC) policy is not expired, the company is legally eligible to receive compensation from the insurance company. There is no issue of non-availability of work order extension.

2) Expired Workers' Compensation Policy
If the WC is not available or has expired, the Principal Employer is responsible for paying compensation to the injured party.

3) Responsibility of Principal Employer and Contractor
There is no issue regarding work orders, contract licenses, etc., as this falls under the responsibility of the Principal Employer and Contractor. If an accident occurs during employment, the liable party must provide compensation.