The major differences between the Workmen Compensation Act (1923) and the Employee Compensation Act are as follows:
Workmen Compensation Act, 1923 | Employee Compensation Act |
| The insured party is called workman or workmen in the act | The insured party is called employee or employees in the act |
| Clerks were not considered to as workmen and thus, not covered by the act | Clerks are treated as employees and are included in the act |
| The minimum payable compensation for death is Rs. 80,000 | The minimum payable compensation for death is now Rs. 1,20,000 |
| The minimum payable compensation for permanent total disability was Rs. 90,000 | The permanent total disability compensation is 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 benefits | Maximum wage is Rs. 8,000 for computing the same |
| The maximum funeral expenses payable was Rs. 2,500 | The maximum funeral expenses payable is 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, Mukesh Saran was unable to pursue his education further. Therefore, soon after completing his 12th, he 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.
Hospital treatment started immediately. However, his right arm became permanently disabled due to the severity of the accident. And Hospital discharged Mukesh after 10 days. His supervisor came to see him at his house.
The supervisor also advised Mukesh to file a claim under the workmen compensation insurance policy because the accident occurred during working hours. Mukesh did the same and approached the insurer for claim settlement.
Furthermore, the insurer approached M.K.S Clothing and asked for a complete report on the accident. The insurer also asked Mukesh to submit medical reports as well to know the extent of the disability. Upon receiving all the documents and necessary details, the insurer reviewed them and settled the claim accordingly.
Since Mukesh was covered under the Workmen Compensation Act, his medical expenses were not reimbursed. In this case, Mukesh incurred medical expenses of Rs 60,000. But the insurer did not reimburse anything. The WC Insurance company paid compensation only for the permanent disability which was Rs 90,000.
Case: 2
For the last three years, Mr Amit Shukla was working as a contractor with T.L. Construction Company. His seniors always appreciated his punctuality and dedication to work. Last year, he married his long-term girlfriend, Riya. However, 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. Suddenly some rods kept there for construction purposes, 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, the accident left him permanently disabled from the lower body. Suddenly, the future of Amit’s family was at stake. Amit’s colleagues came to see him when the hospital discharged him after 15 days. They also advised him to file a claim under the Employee Compensation Act. He could now get a claim under the act because the accident occurred during working hours. As T.L Construction Company had the employee compensation insurance policy, they approached the insurer and it agreed to settle the claim.
Besides, the insurer asked for the salary details of Amit and medical reports to know the extent of disability. After analyzing all the facts, the insurer agreed to settle the claim and paid the compensation of Rs. 1,40,000. The insurer settled medical expenses incurred by Amit, amounting to Rs 2 lakh.
The difference in compensation on a case-to-case basis
Both Mukesh and Amit got permanently disabled. However, the compensation received by both was different. While Mukesh got Rs 90,000 under the workmen compensation act, Amit received Rs 1,40,000 under the employee compensation act.
