Millions of people working in the unorganised sector, who sustain injuries at their workplace, will soon be eligible for higher compensation from employers as the Union Cabinet has approved amendments to the Employee’s Compensation Act of 1923.
Although there has been no official communication on the approval given by the Union Cabinet, top labour ministry officials said Labour Minister Bandaru Dattatreya moved the labour law amendments to the Lok Sabha Secretariat and it is expected to be introduced in the Lower House in the next few days.
Injury or deathAccording to the amendments approved by the Cabinet, employers will be liable for penalty amount in the range of Rs.50,000-Rs.1 lakh, up substantially from Rs.500 at present, in case they fail to report the authorities about an accident occurring in work premises leading to injuries, serious body injuries or death of a worker.
Employees or their families will be eligible for higher compensation from employers as the latter will no longer be able to move the court for paying them a sum of up to Rs.10,000. At present, employers can move the High Court for an appeal against the Labour Commissioner’s order of paying more than Rs.300 as compensation. “The law will ensure that employees are not harassed by the employers for a small amount of compensation. This proposal will help employees get at least Rs.10,000 as compensation without facing legal hurdles,” said another senior labour ministry official.
The Employees’ Compensation Act, enacted in 1923, is one of the first legislations providing a social security net to workers in the country which covers all work-related injuries. It provides payment of compensation to workers and their families in case of injury or death by industrial accidents.
Increased compensationThe law is applicable to unorganised workers employed in factories, mines, plantation, construction site and also, to certain railway servants. Earlier known as the Workmen’s Compensation Act, it was amended by the UPA government in 2009 to substantially increase compensation for workers.
“The proposed amendment related to a hike in penalty in case of non-reporting of accidents is a very encouraging move. This will incentivise the employers to report all form of accidents and once that happens, the judicial proceedings will take over and the workers or their dependents can get compensation well within time,” said K.R. Shyam Sundar, professor of human resources management at XLRI Jamshedpur.
He said the proposed change related to increasing compensation amount not entitled for appeals from the employer is a move in tune with the present level of minimum wages prevalent in the country compared with 1923. “It doesn’t alter the situation at all. The employers can still move the High Court. It is seen that compensation cases go on for very long because of appeal and counter-appeal proceedings that go to the Supreme Court,” Mr Sundar said. He backed a system of such cases going to the industrial courts.
