Under the Workmen’s Compensation Act, 1923 (now known as the Employees’ Compensation Act, 1923), employers are held liable to pay compensation to their employees or their dependents in cases of work-related injuries, disabilities, or fatalities. This liability is a fundamental aspect of the Act, and it ensures that employees and their families receive financial support in the event of workplace accidents.
Overview of an Employer’s Liability for Compensation
1. Absolute Liability:
- One of the key principles of the Act is that employer liability for compensation is absolute. This means that employers are liable to pay compensation regardless of whether they were at fault or negligent in causing the injury or accident.
2. Coverage of Employer Liability:
- Employers are liable for compensation in cases where an injury, disability, or death arises out of and during the course of employment. This includes injuries that occur on the workplace premises or while an employee is engaged in work-related activities.
3. No-Fault Liability:
- The Act operates on a “no-fault” basis, meaning that employees do not need to prove negligence or fault on the part of the employer to claim compensation. The focus is on providing financial support to the injured employee or their dependents.
4. Compensation to Dependents:
- In the unfortunate event of an employee’s death due to a work-related accident, the employer is liable to pay compensation to the deceased employee’s dependents, such as the spouse, children, or parents. The compensation amount is determined based on the Act’s provisions.
5. Compensation for Injured Employees:
- For employees who sustain injuries or disabilities, the employer is liable to pay compensation based on the nature and severity of the injury, the employee’s monthly wage, and the specific provisions of the Act.
6. Minimum and Maximum Liability:
- The Act may specify minimum and maximum compensation limits, ensuring that employers provide a reasonable and fair amount of compensation while also considering their financial capacity.
7. Insurance:
- Employers can fulfill their liability under the Act by obtaining an insurance policy known as “Workmen’s Compensation Insurance” or “Employer’s Liability Insurance.” This insurance coverage helps employers meet their financial obligations in case of compensation claims.
8. Compliance with Commissioner’s Order:
- Employers are legally obligated to comply with the commissioner’s order regarding the payment of compensation. The commissioner’s decision determines the amount of compensation and the party responsible for payment.
9. Penalties for Non-Compliance:
- Failure to comply with the Act’s provisions, including the payment of compensation, can result in penalties, fines, and legal consequences for employers. Non-compliance can lead to legal actions and legal liabilities.
10. Role of Insurance Companies:
- Employers who have obtained Workmen’s Compensation Insurance typically work with insurance companies to process and pay compensation claims on their behalf.
