Highlighted the Important aspects of the Act.

2. By : Abinash Pradhan
Asst. Manager (HRD)

3. • Name : Employee’s Compensation Act : 1923
• Extends : Whole of India
• Effective : 1st July,1924

4. • This act provide social security to employees.
• An employee who dies or suffers disablement
(partial/total) due to accidents arising out of
and in the course of employment is entitled to
get compensation from his employer.

5. This Act contains
• 36 Sections.
• 4 Schedules
• Schedule I : List of injuries deemed to result in permanent
disablement , this schedule contains 2 part i.e. Part I – List
Total disablement & part II contains list of partial
disablement.
• Schedule II : List of person who subject to the provisions of
section 2 (dd), are included in the definition of employee.
• Schedule III : List of occupational diseases
• Schedule IV : Relevant factor for working out lump sum
equivalent of compensation amount in case of Permanent
disablement and death

6. Act is applicable to those factories, mines,
transport establishments, construction works
etc. which are not covered under ESI Act 1948

7. Disablement means loss of capacity to work or
to move . It may result in loss or reduction of his
earning capacity. The employee is not able to
earn as much as he used to earn before his
disablement.
– It may be permanent or temporary
– It may be partial or total.

8. • Means any disablement as reduces the
earning capacity of an employee nas a result
of some accident.
– Temporary Partial disablement : Reduces earning
capacity in employment which the employee was
engaged at the time of accident.
– Permanent Partial disablement : Reduces earning
capacity in every employment which he was
capable of at time of accident

9. Such disablement, whether of a temporary or
permanent nature, as incapacitates an employee
for all work which he was capable of performing at
the time of accident resulting in such disablement :
• Provided that permanent total disablement shall
be deemed to result from every injury specified
in part I of schedule I. i.e Loss of both hands.
• From combination of injuries specified in part II
of schedule I there of where the aggregate
percentage of loss of earning capacity is more
than 100 %

10. Employee means a person who is
– Railway servant
– Crew of ship
– Crew of aircraft
– Driver, cleaner, helper or mechanic of motor vehicle
– Employees recruited abroad
– Persons employed in activities like manufacturing
process, explosive, mines, ship loading/unloading ,
constructions, electricity generation and distribution
etc. Which list is given in schedule II of the act.
Employee does not include any person working in the
capacity of a member of the armed forces of the union .

11. • The most important part of employee
compensation act is how to calculate
compensation.

12. • In case of death
– 50% of monthly wages (8000 Max) * relevant factor or
1,20,000 which ever is higher
• In case of Total Disablement
– 60% of monthly wages(8000 Max)* relevant factor or
1,40,000 which ever is higher
• In case of permanent partial disablement =
according to incapacity caused
• In case of Temporary disablement = Rs 2000 per
month up to 5 years .