Introduction to Workmen Compensation Act and Factories Act
The Factories Act, of 1948, and the Workmen’s Compensation Act are based on the idea of improving working conditions. These Acts intend to regulate the health and safety of young persons, women, and children employed in the factories. They offer exhaustive coverage of situations where health and safety measures are concerned. The Acts account for almost every situation, whether with regard to hazardous substances, heavy machinery, or equipment that may cause injuries or accidents, to ensure workers’ welfare and safety. Let’s look into the Implication of the Workmen’s compensation Act.
Duties conferred on an employer/ business owner under the Implication of the Workmen’s compensation act, 1923.
The Workmen’s Compensation Act also known as Employees Compensation Act, 1923 (EC act) holds an employer liable to pay compensation if personal injury is caused to his/her workers within the course of his employment. Under the Act, the owner of a business must compensate an employee or their families in case of the following instances:
- accidents arising within the course of employment, ensuing in death, or disability whether permanent, total, temporary or partial if he gets an industrial disease.
- in case of failure to maintain safe conditions of labour, machinery, or plant connected to his trade or business
- omission on the part of the management to maintain the afore-mentioned conditions properly.
- injuries suffered by workers while following the orders of an authorized supervisor.
The act applies to workers engaged in
- factories
- mines
- docks,
- construction establishments
- plantations and, oilfields
- clerical capacity in railway
- seas
- manufacturing or handling of explosives, among others listed in Schedules II and III of the said Act.
The policy also covers legal costs and the compensation awarded to employees by the Worker courts. As there is no upper limit on liability, a workman compensation (WC)policy comes as an important plan. It helps to ease the financial burden on the employer. In other words, Worker Insurance helps employers cover their liability under the EC Act.
In cases where the employer wants to reject a workman’s claim, the burden of proof lies with the employer. For example, in the case of intentional disobedience by the worker, punishing the owner for the same is unreasonable. In such cases, the owner must prove such disobedience to absolve himself of liability. Thus, the burden of proof lies on such an owner.
Duties conferred on an employer Under the Factories Act 1948
The Factories Act lays down provisions for the health, safety, welfare, and service conditions of labourers working in factories. It contains provisions for working hours of adults, employment of young persons, leaves, overtime, etc.
The Act applies to the following:
- All factories employ more than 10 people and work with the aid of power.
- Units employing over 20 people and working without the aid of power
- All workers employed in the factory premises or precincts directly or through an agency including a contractor, are involved in any manufacture.
Some provisions of the Act may vary according to the nature of the work of the establishment.
Duties conferred on an occupier of premises and certain authorized subordinates
Duties conferred under this act are two: one pertaining to disclosure of certain information and the other requiring taking measures for the safety and health of workers.
Disclosure of Information
A written notice must be sent by business owners to the Chief Inspector for all establishments which come within the scope of the Act for the first time before it engages in a manufacturing process.
Measures for safety and health
It is the duty of the owner to ensure that the safety and health of the workers are taken care of, and for that, they must take the following steps:
- Maintenance of plant and working systems that are safe and without risk to the health of the workers
- Ensuring safety with the use, handling, storage, and transport of articles and substances
- Providing relevant information instruction, training, and supervision,
- Appointing a Safety Officer in a factory
- Drawing up an on-site emergency plan and detailed disaster control measures for his factory with the approval of the Chief Inspector
- Maintaining accurate and up-to-date medical records of the factory workers by way of medical examination and conducting health surveys of workers.
Determination of Compensation
The compensation given to the worker primarily depends on the monthly wage of the worker, the nature of the injury, the number of dependents, age, and so on. It is also considered a relevant factor (defined in Schedule IV of the Workmen’s Compensation Act).
(i)In case of death, the compensation payable equals 50% of the monthly wages of the deceased employee multiplied by the relevant factor or a sum of Rs. 120,000, whichever is higher.
(ii) In the case of Permanent Total Disablement, the compensation payable equals 60% of the monthly wages of the disabled employee multiplied by the relevant factor or a sum of Rs. 120,000, whichever is higher.
(iii) In the case of Permanent Partial Disablement, the compensation is calculated proportionally on the basis of the loss of earning capacity due to the injury. Except for those defined in the Act, other specific cases depend on the assessment of qualified medical practitioners.
(iv) In case of temporary disablement, the employer is liable to pay 25% of the monthly wages on the 16th day from the day of the disablement.
Moreover, there is a delayed payment penalty of 6% per annum for employers who fail to pay compensation within the due deadline. This accounts for a sum not more than 50% of the total amount.
It is best for business owners to buy workmen’s compensation to avoid financial burdens arising in case of unexpected mishaps.
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About The Author
Rahul Kumar
MBA Finance
With a wealth of experience in the insurance industry, Rahul is a seasoned writer specializing in articles related to workmen compensation policies (WC policies) for SecureNow. With 12 years of experience in the field, he has acquired in-depth knowledge and expertise in workmen compensation insurance, understanding its complexities and nuances. Their insightful articles provide valuable insights into the importance of WC policies for businesses and employees alike, offering practical advice and guidance on navigating the intricacies of insurance coverage. Trust him to deliver informative and engaging content, backed by years of experience and a passion for educating readers about insurance-related topics.
