The following are the major differences between the Workmen Compensation Act (1923) and the Employee Compensation Act.

Workmen Compensation Act, 1923

 Employee Compensation Act
The insured party is called workman or workmen in the actThe insured party is called employee or employees in the act
Clerks were not considered to as workmen and thus, not covered by the actClerks are treated as employees and are included in the act
The minimum payable compensation for death is Rs. 80,000The minimum payable compensation for death is revised to Rs. 1,20,000
The minimum payable compensation for permanent total disability was Rs. 90,000The permanent total disability compensation is revised to Rs. 1,40,000
No medical treatment expense reimbursement (but can be included by paying extra premium)The employees now can submit their medical expense bills for reimbursement for the injuries caused during the course of employment
Maximum wage was Rs. 4,000 for computing the death or permanent disability benefitsMaximum wage is Rs. 8,000 for computing the same
The maximum funeral expenses payable was Rs. 2,500The maximum funeral expenses payable has been revised to Rs. 5,000

No claim settlement time limit

The claims must be settled within three months from the intimation

Case: 1

Due to his family’s modest financial condition, he was unable to pursue his education further and therefore, soon after completing his 12th, Mukesh Saran started working in M.K.S Clothing. He was working as a senior machine operator and earning Rs 9,000. Though the salary was not very high; it was sufficient to meet the ends.

Read More: What is the Workmen’s Compensation Act?

Destiny had a different plan for him and one day while working, his hand gloves caught between the machine and he suffered a major injury to his right arm. Some workers around him rushed him to a nearby hospital.

His treatment was started immediately, however, the severity of the accident was so high that his right arm became permanently disabled. When, after ten days, Mukesh was discharged from the hospital, his supervisor came to see him at his house.

As the accident was occurred during the working hours, the supervisor advised him to file a claim under the workmen compensation insurance policy. Mukesh did the same and approached the insurer for claim settlement.

Here the insurer approached M.K.S Clothing and asked for the complete report on the accident. Along with this, the insurer asked Mukesh to submit medical reports as well to know the extent of disability. Upon receiving all the documents and necessary details, the insurer reviewed them and settled the claim accordingly.

As Mukesh was covered under the Workmen Compensation Act, he did not get reimbursement of medical expenses. In this case, Mukesh incurred the medical expenses of Rs 60,000 and nothing was reimbursed by the insurer. The insurer paid compensation only for the permanent disability which was Rs 90,000.

Case: 2

For the last three years, Mr. Amt Shukla was working as a contractor with T.L. Construction Company. His punctuality and dedication towards work were always appreciated by his seniors. Last year, he got married to his long-term girlfriend, Riya. When everything was looking amazing, life’s uncertainty turned Amit’s world upside down.

One day at the construction site, he was inspecting the work when suddenly some rods, which were kept there for construction purpose, fell on him and he suffered serious injuries to his head and back. Workers at the site rushed him to a nearby hospital where doctors started the treatment immediately.

Read More: What are the legal Responsibilities of the Company under Workers’ Compensation insurance?

Though doctors tried their best and saved Amit’s life; he got permanently disabled from the lower body due to the accident.

Suddenly, the future of Amit’s family came at stake. Amit was discharged after 15 days, and many of its colleagues came to see him. They advised him to file a claim under the Employee Compensation Act. As the accident occurred during working hours, he was entitled to get claim under the act. As T.L Construction Company had the employee compensation insurance policy, they approached the insurer who agreed to settle the claim.

The insurer asked for the salary details of Amit along with medical reports to know the extent of disability. After analysing all the facts, the insurer agreed to settle the claim and paid the compensation of Rs. 1,40,000. In this case, the insurer also settled the medical expenses incurred by Amit which was Rs 2 lakh.

In the above case, both Mukesh and Amit were unfortunately got permanently disabled, however, the compensation received by both were different. While Mukesh was covered under workmen compensation act, he got Rs 90,000, Amit was covered under employee compensation act and thus, received Rs 1,40,000.

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