January 2021 – Page 23 – india free notes.com

Employee State Insurance Act, 1948

by indiafreenotes01/01/202126/01/20260

The Employees’ State Insurance Act, 1948 is a major social security legislation enacted to provide protection to employees against sickness, maternity, disability, and employment injury. The Act aims to ensure medical care and financial assistance to workers and their dependents during times of need. It reflects the government’s commitment to labour welfare and social justice by safeguarding workers from economic distress arising out of health-related contingencies.

Objectives of the Employees’ State Insurance Act, 1948

The Employees’ State Insurance Act, 1948 was enacted to provide a comprehensive social security system for industrial workers in India. The Act aims to protect employees against economic distress arising from sickness, maternity, disability, and employment-related injuries. The key objectives of the Act are explained below.

Provision of Social Security to Workers

The primary objective of the ESI Act is to provide social security to employees working in factories and other establishments. It ensures protection against unforeseen events such as illness, injury, or death arising out of employment. By offering medical care and cash benefits, the Act safeguards workers from financial hardship. This objective reflects the government’s commitment to improving labour welfare and ensuring a sense of security among workers and their families.

Medical Care and Health Protection

Another important objective of the ESI Act is to provide comprehensive medical care to insured employees and their dependents. The Act ensures access to outpatient treatment, hospitalization, specialist services, and medicines. By promoting preventive and curative healthcare, the Act helps maintain the physical and mental well-being of workers. Healthy employees are more productive and contribute effectively to industrial growth and economic development.

Income Protection during Sickness

The Act aims to protect workers from loss of income during periods of sickness. Under the ESI scheme, insured employees receive sickness benefits in the form of cash compensation when they are unable to work due to illness. This objective ensures continuity of income and helps workers meet their daily needs during illness. It reduces financial stress and allows employees to recover without fear of wage loss.

Maternity Protection for Women Employees

The ESI Act seeks to protect the health and employment of women workers during pregnancy and childbirth. It provides maternity benefits such as paid leave and medical care during confinement. This objective promotes the well-being of both mother and child while ensuring job security for women employees. Maternity protection under the Act encourages women’s participation in the workforce and supports gender equality in employment.

Compensation for Employment Injury and Disablement

One of the key objectives of the ESI Act is to provide financial compensation in cases of employment-related injuries resulting in temporary or permanent disablement. The Act ensures that workers who suffer injuries while performing their duties receive cash benefits and medical care. This objective protects workers and their families from sudden loss of income and promotes a sense of safety at the workplace.

Financial Support to Dependents in Case of Death

The Act aims to provide dependents’ benefits to the family members of insured employees who die due to employment injury. This objective ensures financial security for dependents such as spouse, children, or parents. By offering regular cash benefits, the Act protects families from economic distress and helps them maintain a reasonable standard of living after the loss of the earning member.

Promotion of Industrial Harmony

By providing social security benefits and medical care, the ESI Act helps reduce dissatisfaction among workers. When employees feel secure and protected, labour disputes and unrest are minimized. This objective contributes to better employer-employee relations and promotes industrial peace. A harmonious industrial environment leads to increased productivity, stability, and long-term growth of industries.

Shared Responsibility of Welfare

The ESI Act aims to distribute the responsibility of employee welfare among employers, employees, and the government. Contributions from employers and employees fund the scheme, while the government supports its administration. This objective promotes collective responsibility and ensures sustainability of the social security system. Shared responsibility strengthens the welfare framework and ensures continuous protection for workers.

Applicability and Coverage of the ESI Act, 1948

Applicability to Factories

The Employees’ State Insurance Act, 1948 applies to factories engaged in manufacturing activities where power is used and 10 or more persons are employed. In the case of non-power-using factories, the Act applies if 20 or more employees are employed. The Act becomes applicable from the date the factory starts functioning, irrespective of whether manufacturing is carried out continuously or seasonally, ensuring compulsory social security coverage for factory workers.

Applicability to Non-Factory Establishments

The scope of the ESI Act has been extended beyond factories to include non-factory establishments such as shops, hotels, restaurants, cinemas, road transport undertakings, private educational institutions, and medical establishments. These establishments come under the Act if they employ 10 or more persons, as notified by the respective State Governments. This expansion ensures that service-sector employees also receive social security protection under the ESI scheme.

Geographical Coverage

The ESI Act applies only in areas notified by the Central or State Government. Initially, the Act was enforced mainly in industrially developed regions, but over time, its geographical coverage has expanded significantly. Today, it covers most urban and semi-urban areas across India. The Act becomes operational in an area only after necessary medical and administrative infrastructure is established, ensuring effective implementation of benefits.

Wage Limit for Employee Coverage

The Act covers employees drawing wages up to a prescribed wage ceiling, which is revised periodically by the government. Currently, employees earning up to a specified monthly wage limit are eligible for ESI benefits. This provision ensures that low- and middle-income workers receive social security protection. Once covered, an employee continues to receive benefits until the end of the contribution period, even if wages exceed the limit temporarily.

Mandatory Coverage of Eligible Employees

Coverage under the ESI Act is compulsory for all employees who fall within its applicability criteria. Employers are legally bound to register their establishments and insure eligible employees. Even casual, temporary, and contract workers are covered if they work in an establishment covered by the Act. This mandatory nature prevents employers from denying benefits and ensures uniform social security coverage for all eligible workers.

Inclusion of Contract and Temporary Workers

The ESI Act extends its coverage to contract labour, temporary employees, and casual workers employed directly or through contractors. If such workers are employed in or in connection with the work of a covered establishment and fall within the wage limit, they are entitled to ESI benefits. This provision protects vulnerable sections of the workforce and prevents exploitation of workers engaged on a non-permanent basis.

Coverage of Dependants

The Act also provides coverage to the dependants of insured employees, including spouses, children, and in certain cases, dependent parents. Dependants are entitled to medical benefits and, in case of death due to employment injury, dependants’ benefits in the form of periodic payments. This ensures that the family of an insured employee is protected against financial hardship arising from illness, injury, or death.

Continuity of Coverage

Once an establishment is covered under the ESI Act, it continues to be governed by the Act even if the number of employees falls below the prescribed limit. This ensures continuity and stability in social security coverage. Employees remain insured without interruption, and employers must continue contributions. This provision prevents frequent inclusion and exclusion of establishments and ensures uninterrupted access to benefits for employees.

Merits of the ESI Act, 1948

Comprehensive Social Security Coverage

One of the major merits of the ESI Act, 1948 is that it provides comprehensive social security protection to employees against various life contingencies such as sickness, maternity, disablement, and death due to employment injury. The Act ensures both medical care and cash benefits, offering holistic protection. This integrated approach safeguards employees from financial insecurity and helps maintain their standard of living during periods of physical or economic distress.

Access to Quality Medical Facilities

The ESI Act ensures free and continuous medical care to insured employees and their dependants through ESI hospitals, dispensaries, and tie-up medical institutions. Medical benefits include consultation, hospitalization, medicines, diagnostic services, and specialist care. This reduces the burden of rising healthcare costs on workers. Easy access to medical facilities promotes better health, faster recovery, and reduced absenteeism, ultimately benefiting both employees and employers.

Income Security During Sickness

Another important merit of the Act is the provision of sickness benefits, which offer cash compensation during periods of certified illness. Employees receive partial wage replacement when they are unable to work due to sickness. This income security prevents loss of livelihood and protects workers from falling into poverty. It allows employees to recover without stress and ensures financial stability during temporary health-related work interruptions.

Maternity Protection for Women Employees

The ESI Act provides significant maternity benefits to insured women employees, including paid leave, medical care, and post-natal support. This promotes maternal and child health and encourages women’s participation in the workforce. By offering financial and healthcare support during pregnancy and childbirth, the Act helps reduce gender-based employment disadvantages and contributes to social justice and equality in employment.

Protection Against Employment Injuries

The Act offers strong protection against employment-related injuries and occupational diseases. Employees suffering from temporary or permanent disablement are entitled to cash benefits, while dependants receive compensation in case of death. This merit ensures that workers and their families are financially safeguarded against workplace hazards. It reinforces employer accountability and encourages safer working conditions in factories and establishments.

Coverage of Dependants

A notable merit of the ESI Act is the inclusion of dependants under its benefits. Spouses, children, and dependent parents are entitled to medical care and, in certain cases, dependants’ benefits. This family-oriented approach extends social security beyond the employee, ensuring overall family welfare. It reduces the financial burden on households and provides a safety net during emergencies affecting the earning member.

Contributory and Affordable Scheme

The ESI Act operates on a contributory basis, with contributions shared by employers and employees at affordable rates. This shared responsibility ensures sustainability of the scheme without overburdening any single party. Government support further strengthens the system. The contributory nature promotes a sense of participation among stakeholders and ensures that benefits are delivered efficiently and continuously.

Improvement in Industrial Relations and Productivity

By promoting employee welfare and security, the ESI Act helps improve industrial relations and workplace harmony. Employees feel valued and protected, leading to higher morale and job satisfaction. Reduced stress related to health and income insecurity enhances productivity and efficiency. Employers also benefit from lower labour turnover, reduced absenteeism, and a more stable and motivated workforce.

Demerits of the ESI Act, 1948

Limited Coverage of Workforce

One major demerit of the ESI Act is its limited coverage, as it mainly applies to employees earning below a prescribed wage ceiling and working in notified areas. A large section of India’s unorganized and informal workforce remains outside its scope. Self-employed persons, agricultural labourers, and workers in small establishments are not adequately covered, reducing the Act’s effectiveness in providing universal social security protection.

Inadequate Medical Infrastructure

Despite its objectives, the ESI scheme often suffers from inadequate medical infrastructure. Many ESI hospitals and dispensaries face shortages of doctors, medicines, equipment, and beds. Long waiting times and overcrowding reduce the quality of healthcare services. In some regions, especially rural and semi-urban areas, ESI facilities are insufficient, forcing insured persons to seek private healthcare and bear additional expenses.

Administrative Inefficiencies

The administration of the ESI Act is often criticized for bureaucratic delays and inefficiencies. Processing of claims, reimbursement, and benefit approvals can be time-consuming. Complex procedures and excessive paperwork discourage employees from availing benefits. Employers also face difficulties in compliance due to frequent inspections and procedural complexities, leading to dissatisfaction among both employees and management.

Financial Burden on Employers

The mandatory contribution requirement under the ESI Act imposes a financial burden on employers, particularly small and medium enterprises. Employers must contribute a fixed percentage of wages regardless of their financial condition. During periods of economic slowdown, this obligation increases operational costs and may discourage employment generation or encourage informal hiring practices to avoid statutory liabilities.

Low Awareness Among Employees

Another significant demerit is the lack of awareness among employees regarding their rights and benefits under the ESI Act. Many workers are unaware of the procedures to claim benefits or the range of services available. This results in underutilization of benefits. Insufficient communication and inadequate training programs contribute to misinformation and prevent employees from fully benefiting from the scheme.

Quality of Medical Services

The quality of medical services under the ESI scheme is often inconsistent across regions. Insured employees sometimes report poor treatment, lack of specialist care, and indifferent staff attitudes. Compared to private healthcare, ESI medical services may appear outdated and less responsive. Such perceptions reduce employee confidence in the system and lead to dissatisfaction with the scheme.

Exclusion of High-Income Employees

The wage ceiling under the ESI Act excludes high-income employees, even though they may also face health and employment risks. Once an employee crosses the wage limit, they are excluded from the scheme, limiting continuity of benefits. This exclusion creates inequality in social security coverage and discourages long-term participation, especially for employees whose wages increase due to promotions or inflation.

Regional Disparities in Implementation

The implementation of the ESI Act varies significantly across states, leading to regional disparities. Some states have well-developed ESI infrastructure, while others lack adequate facilities and administrative efficiency. This uneven implementation results in unequal access to benefits for insured employees across different regions, undermining the uniform application and objectives of the Act.

Miscellaneous Provision Act 1948

by indiafreenotes01/01/202123/08/20251

(1) This Act may be called the Coal Mines Provident Fund and Miscellaneous Provisions Act 1948.

(2) It extends to the whole of India.

An Act to make provision for the framing of a Provident Fund Scheme a Pension Scheme, a Deposit-linked Insurance Scheme and a Bonus Scheme for persons employed in coal mines

Interpretation. In this Act, unless there is anything repugnant in the subject or context:

(a) “bonus” means any sum of money payable to an [vi][employee] under the Coal Mines Bonus Scheme framed under this Act;

[vii][(aa) “coal” includes lignite;

[viii][(b) “coal mine” means any excavation where any operation for the purpose of searching for or obtaining coal has been or is being carried on, and includes—

(i) all borings and bore holes;

(ii) all shafts, in or adjacent to and belonging to a coal mine, whether in the course of being sunk or not;

(iii) all levels and inclined places in the course of being driven;

(iv) any opencast working or quarry, that is to say, an excavation where any operation for the purpose of searching for or obtaining coal has been or is being carried on, not being a shaft or an excavation, which extends below superjacent ground;

(v) all conveyors or aerial rope ways provided for the bringing into or removal from a coal mine of coal or other articles or for the removal of refuse therefrom;

(vi) all adits, levels, planes, machinery, works, railways, tramways and sidings, in or adjacent to and belonging to a coal mine;

(vii) all workshops situated within the precincts of a coal mine and under the same management and used for purposes connected with that coal mine or a number of coal mines under the same management;

(viii) any office of a coal mine;

(ix) all power-stations for supplying electricity for the purpose of working the coal mine or a number of coal mines under the same management;

(x) any premises for the time being used for depositing refuse from a coal mine, or in which any operation in connection with such refuse is being carried on, being premises exclusively occupied by the employer of the coal mine;

(xi) all hospitals and canteens maintained for the benefit of the employees of a coal mine or a number of coal mines under the same management;

(xii) any coke oven or plant;

(xiii) any premises in or adjacent to and belonging to a coal mine, on which any plant or other machinery connected with a coal mine is situated or on which any process ancillary to the work of a coal mine is being carried on.

(c) “contribution” means the contribution payable in respect of a member under the Coal Mines Provident Fund Scheme framed under this Act [ix], or the contribution payable in respect of an employee to whom the Insurance Scheme applies.

[x][(d) “employee” means any person who is employed for wages in any kind of work, manual or otherwise, in connection with a coal mine and who gets his wages directly from the employer and includes:

(1) any person employed by or through a contractor in or in connection with a coal mine, and

(2) for the purposes of the Coal Mines Provident Fund Scheme, also:

(i) any other person who is employed as a sanitary worker, Mali, teacher, or domestic servant in or in connection with a coal mine and who receives wages directly from the employer, and

(ii) any apprentice or trainee who receives stipend or other remuneration from the employer;]

[xi][(e) “employer”, when used in relation to a coal mine, means any person who is the immediate proprietor or lessee or occupier of the coal mine or of any part thereof and in the case of a coal mine the business whereof is being carried on by a liquidator or receiver, such liquidator or receiver, and in the case of a coal mine owned by a company the business whereof is being carried on by a managing agent, such managing agent, but does not include a person who merely receives a royalty, rent or fine from the coal mine, or is merely the proprietor of the coal mine, subject to any lease, grant or licence for the working thereof, or is merely the owner of the soil and not interested in the coal of the coal mine; but any contractor for the working of a coal mine or any part thereof shall be subject to this Act in like manner as if he were an employer, but not so as to exempt the employer from any liability;]

(f) “Fund” means the provident fund established under the Coal Mines Provident Fund Scheme;

[xiii][(fa) “Insurance Fund” means the Deposit-linked Insurance Fund established under sub-section (2) of Section 3-G;

(fb) “Insurance Scheme” means the Coal Mines Deposit-linked Insurance Scheme framed under sub-section (1) of Section 3-G;]

[xiv][(fc) “Managing agent” has the meaning assigned to in the Companies Act, 1956 (1 of 1956); and]

(g) “Member” means a member of the Fund.

[xv][(h) “Pension Fund” means the Pension Fund established under sub-section (2) of Section 3-E;

(i) “Pension Scheme” means the Coal Mines Pension Scheme framed under sub-section (1) of Section 3-E;

(j) “superannuation”, in relation to an employee who is a member of the Pension Scheme, means the attainment, by the said employee, of such age as is fixed in the contract or conditions of service as the age on the attainment of which such employee shall vacate the employment.

Coal Mines Provident Fund Scheme.

Coal Mines Provident Fund Scheme. (1) The Central Government may, by notification in the Official Gazette, frame a scheme to be called the Coal Mines Provident Fund Scheme for the establishment of a Provident Fund for [xvi][employees] and specify the coal mines to which the said scheme shall apply.

[xvii][(1-A) The Fund shall vest in, and be administered by the Board constituted under Section 3-A.]

(2) Any scheme framed under the provisions of sub-section (1) may provide for all or any of the matters specified in the First Schedule.

Constitution of Board of Trustees.

[xviii][3-A. Constitution of Board of Trustees. (1) The Central Government may, by notification in the Official Gazette, constitute, with effect from such date as may be specified therein, a Board of Trustees for the territories to which this Act extends (hereinafter in this Act, referred to as the Board) consisting of the following persons, namely:

(a) a Chairman appointed by the Central Government;

(b) the Coal Mines Provident Fund Commissioner, ex officio;

(d) not more than six person representing Government of such States as the Central Government may specify in this behalf, from time to time, appointed by the Central Government;

(e) six persons representing employers, appointed by the Central Government after consultation with such organisations of employers as may be recognised by the Central Government in this behalf and of whom at least one shall be a person who is not a member of any such organisation;

(f) six persons representing employees appointed by the Central Government after consultation with such organisations of employees as may be recognised by the Central Government in this behalf and of whom at least one shall be an employee himself and at least one shall be a person who is not a member of any such organisation.

(2) The terms and conditions subject to which a member of the Board may be appointed and the time, place and procedure, of the meetings of the Board shall be such as may be provided for in the Coal Mines Provident Fund Scheme.

(3) The Board shall [xix][subject to the provisions of Section 3-E,] [xx][and Section 3-G] administer the Fund vested in it in such manner as may be specified in the Scheme aforesaid.

(4) The Board shall perform such other functions as it may be required to perform by or under any provisions of [xxi][the Coal Mines Provident Fund Scheme] [xxii][, the [Coal Mines Pension Scheme][xxiii] and the Insurance Scheme].

3-B. Board of Trustees to be a body corporate. The Board of Trustees constituted under Section 3-A shall be a body corporate under the name specified in the notification constituting it, having perpetual succession and a common seal and shall by the said name sue and be sued.

3-C. Appointment of officers. (1) The Central Government shall appoint a Coal Mines Provident Fund Commissioner, who shall be the chief executive officer of the Board and shall be subject to the general control and superintendence of the Board.

(2) The Central Government may also appoint as many other officers whose minimum monthly salary in the scale of pay (if any), applicable to them is not less than four hundred rupees, as it may consider necessary to assist the Coal Mines Provident Fund Commissioner in the discharge of his duties.

(3) Subject to the provisions of sub-sections (1) and (2), the Board may appoint such other officers and employees as it may consider necessary for the efficient administration of the Coal Mines Provident Fund Scheme [xxiv][and the [Coal Mines Pension Scheme] and the Insurance Scheme].

(4) The method of recruitment, salary and allowances, discipline and other conditions of service of the Coal Mines Provident Fund Commissioner shall be such as may be specified by the Central Government and such salary and allowances shall be paid out of the Fund.

(5) The method of recruitment, salary and allowances, discipline and other conditions of service of the other officers and employees of the Board shall be such as may be specified by the Board with the approval of the Central Government.

Coal Mines Pension Scheme.

[xxv][3-E. Coal Mines Pension Scheme. (1) The Central Government may, by notification in the Official Gazette, frame a scheme to be called the Coal Mines Pension Scheme for the purpose of providing for:

(a) superannuation pension, retiring pension or permanent total disablement pension to the persons employed in any coal mine or class of coal mines to which this Act applies; and

(b) widow or widower pension, children pension or orphan pension and life assurance benefits, payable to the beneficiaries of such employees.

(2) Notwithstanding anything contained in Section 3, there shall be established, as soon as may be after framing of the Pension Scheme, a Pension Fund into which there shall be paid, from time to time, in respect of every employee who is a member of the Pension Scheme:

(a) such sums, not exceeding one-fourth, of the amount payable to the Fund under sub-section (1) of Section 10-D as the employer’s contribution as well as the employee’s contribution, as may be specified in the Pension Scheme;

(b) such sums as the Central Government may, after due appropriation made by Parliament by law in this behalf, specify;

(d) any other contribution which may be made to the Pension Fund with the previous approval of the Central Government.

(3) On the establishment of the Pension Fund, the Family Pension Scheme (hereinafter referred to as the ceased scheme) shall cease to operate and all assets of the ceased scheme shall vest in, and shall stand transferred to, and all liabilities under the ceased scheme shall be enforceable against, the Pension Fund and the beneficiaries under the ceased scheme shall be entitled to draw the benefits, not less than the benefits, they were entitled to under the ceased scheme, from the Pension Fund.

(4) The Pension Fund shall vest in and be administered by the Board in such manner as may be specified in the Pension Scheme.

(5) A scheme framed under the provisions of sub-section (1) may provide for all or any of the matters specified in the Second Schedule.

3-F. Special grant by Central Government.

[xxvi][3-F. Special grant by Central Government. The Central Government shall, after due appropriation made by Parliament by law in this behalf, pay such further sums as may be determined by it into the [Pension Fund][xxvii] to meet all the expenses in connection with the administration of the [Coal Mines Pension Scheme] other than the expenses towards the cost of any benefits provided by or under the said scheme.]

3-G. Coal Mines Deposit-linked Insurance Scheme.

[xxviii][3-G. Coal Mines Deposit-linked Insurance Scheme. (1) The Central Government may, by notification in the Official Gazette, frame a scheme to be called the Coal Mines Deposit-linked Insurance Scheme for the purpose of providing life insurance benefits to such employees as are covered by the Coal Mines Provident Fund Scheme.

(2) There shall be established, as soon as may be after the framing of the Insurance Scheme, a Deposit-linked Insurance Fund into which shall be paid by the employer from time to time in respect of every such employee, in relation to whom he is the employer, such amount, not being more that one per cent of the aggregate of the basic wages, dearness allowance and retaining allowance (if any) for the time being payable in relation to such employee, as the Central Government may, by notification in the Official Gazette, specify.

Explanation. For the purposes of this sub-section:

(a) the expression “basic wages” has the meaning assigned to it in the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952);

(b) “dearness allowance” means all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living and shall be deemed to include also the cash value of any food concession allowed to the employee;

(c) “retaining allowance” means an allowance payable for the time being to an employee of any coal mine during any period in which the coal mine is not working, for retaining his services.

(3) The Central Government shall, after due appropriation made by Parliament by law, contribute to the Insurance Fund in relation to each employee covered by the Coal Mines Provident Fund Scheme, an amount representing one-half of the contribution which an employer is required, by sub-section (2), to make.

(4) (a) The employer shall pay into the Insurance Fund such further sums of money, not exceeding one-fourth of the contribution which he is required to make under sub-section (2), as the Central Government may, from time to time, determine, to meet all the expenses in connection with the administration of the Insurance Scheme other than the expenses towards the cost of any benefits provided by or under that scheme.

(b) The Central Government shall, after due appropriation made by Parliament by law, pay into the Insurance Fund such further sums of money representing one-half of the sums payable by the employer under clause (a), to meet all the expenses in connection with the administration of the Insurance Scheme other than the expenses towards the cost of any benefits provided by or under that scheme.

(5) The Insurance Fund shall vest in the Board and shall be administered by the Board in such manner as may be specified in the Insurance Scheme.

(6) Any scheme framed under the provisions of sub-section (1) may provide for all or any of the matters specified in the Third Schedule.

Fund to be recognised under Act 43 of 1961.

[xxix][4. Fund to be recognised under Act 43 of 1961. For the purposes of the Income Tax Act, 1961, the Fund shall be deemed to be a recognised Provident Fund within the meaning of Part A of the Fourth Schedule to that Act.]

Coal Mines Bonus Scheme.

Coal Mines Bonus Scheme. (1) The Central Government may, by notification in the Official Gazette, frame a scheme to be called the Coal Mines Bonus Scheme for the payment of bonus to [xxx][employees] and specify the coal mines to which the said scheme shall apply.

(2) A scheme framed under the provisions of sub-section (1) may provide for all or any of the matters specified in the [xxxi][Fourth Schedule].

[xxxii][(3) The employer shall pay the bonus in accordance with the Scheme as aforesaid.]

Retrospective operation of a scheme.

Retrospective operation of a scheme. A scheme framed under this Act may provide that any of its provisions shall come into force either prospectively or retrospectively with effect from such date as may be specified in this behalf in the scheme.
Modification of a scheme.
Modification of a scheme. The Central Government may, by notification in the Official Gazette, add to, amend or vary [xxxiii][either prospectively or retrospectively] a scheme framed under this Act.

7-A. Schemes to be laid before Parliament.

[xxxiv][7-A. Schemes to be laid before Parliament. Every scheme made under this Act shall be laid as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in [xxxv][two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid] both Houses agree in making any modification in the scheme or both Houses agree that the scheme should not be made, the scheme shall thereafter have effect only in such modified form or be of no effect, as the case may be; so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that scheme.

7-B. Determination of moneys due from employer.

7-B. Determination of moneys due from employer. (1) The Coal Mines Provident Fund Commissioner or any other officer duly authorised in this behalf by the Central Government may by order determine the amount due from any employer under any provisions of this Act or of any scheme framed thereunder and for this purpose may conduct such enquiry as he may deem necessary.

(2) The officer conducting the enquiry under sub-section (1) shall, for the purpose of such enquiry, have the same power as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), for trying a suit in respect of the following matters, namely:

(a) enforcing the attendance of any person or examining him on oaths;

(b) requiring the discovery and production of documents;

(d) issuing commissions for the examination of witnesses;

and any such enquiry shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purposes of Section 196 of the Indian Penal Code, 1860 (45 of 1860).

(3) No order determining the amount due from any employer shall be made under sub-section (1), unless the employer is given a reasonable opportunity of representing his case.

(4) An order made under this section shall be final and shall not be questioned in any court of law.]

Protection against attachment.

Protection against attachment. (1) The amount of the provident fund standing to the credit of any member in the Fund shall not in any way be capable of being assigned or charged and shall not be liable to attachment under any decree or order of any court in respect of any debt or liability incurred by the member and neither the Official Assignee nor any Receiver appointed under the Provincial Insolvency Act, 1920, shall be entitled to, or have any claim on, any such amount.

(2) Any amount standing to the credit any member in the Fund at the time of his death and payable to his nominee under the Coal Mines Provident Fund Scheme shall, subject to any deduction authorised by the said scheme, vest in the nominee and shall be free from any debt or other liability incurred by the deceased or incurred by the nominee before the death of the member.

[xxxvi][(3) The provisions of sub-section (1) and sub-section (2) shall, so far as may be, apply in relation to the [pension][xxxvii] or any other amount payable under the [Coal Mines Pension Scheme] [xxxviii][and also in relation to any amount payable under the Insurance Scheme] as they apply in relation to any amount payable out of the Fund.]

Employers liability for Compensation (Sec 3 to 13)

by indiafreenotes01/01/202127/10/20241

Employer’s liability for compensation. (1) If personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter:

Provided that the employer shall not be so liable:

(a) in respect of any injury which does not result in the total or partial disablement of the workman for a period exceeding [three] days;

(b) in respect of any [injury, not resulting in death] [or permanent total disablement][, caused by] an accident which is directly attributable to:

(i) the workman having been at the time thereof under the influence of drink or drugs, or

(ii)the wilful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workmen, or

(iii) the wilful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of workmen.

[(2) If a workman employed in any employment specified in Part A of Schedule III contracts any disease specified therein as an occupational disease peculiar to that employment, or if a workman, whilst in the service of an employer in whose service he has been employed for a continuous period of not less than six months (which period shall not include a period of service under any other employer in the same kind of employment) in any employment specified in Part B of Schedule III, contracts any disease specified therein as an occupational disease peculiar to that employment, or if a workman whilst in the service of one or more employers in any employment specified in Part C of Schedule III for such continuous period as the Central Government may specify in respect of each such employment, contracts any disease specified therein as an occupational disease peculiar to that employment, the contracting of the disease shall be deemed to be an injury by accident within the meaning of this section and, unless the contrary is proved, the accident shall be deemed to have arisen out of, and in the course of, the employment:]

[Provided that if it is proved,

(a) that a workman whilst in the service of one or more employers in any employment specified in Part C of Schedule III has contracted a disease specified therein as an occupational disease peculiar to that employment during a continuous period which is less than the period specified under this sub-section for that employment, and

(b) that the disease has arisen out of and in the course of the employment;

the contracting of such disease shall be deemed to be an injury by accident within the meaning of this section:]

Provided further that if it is proved that a workman who having served under any employer in any employment specified in Part B of Schedule III or who having served under one or more employers in any employment specified in Part C of that Schedule, for a continuous period specified under this sub-section for that employment and he has after the cessation of such service contracted any disease specified in the said Part B or the said Part C, as the case may be, as an occupational disease peculiar to the employment and that such disease arose out of the employment, the contracting of the disease shall be deemed to be an injury by accident within the meaning of this section.

(2-A) If a workman employed in any employment specified in Part C of Schedule III contracts any occupational disease peculiar to that employment, the contracting whereof is deemed to be an injury by accident within the meaning of this section, and such employment was under more than one employer, all such employers shall be liable for the payment of the compensation in such proportion as the Commissioner may, in the circumstances, deem just.

(3) [The Central Government or the State Government][, after giving, by notification in the Official Gazette, not less than three months’ notice of its intention so to do, may, by a like notification, add any description of employment to the employments specified in Schedule III, and shall specify in the case of employments so added the diseases which shall be deemed for the purposes of this section to be occupational diseases peculiar to those employments respectively, and thereupon the provisions of sub-section (2) shall apply ] [in the case of a notification by the Central Government, within the territories to which this Act extends or, in case of a notification by the State Government, within the State] [as if such diseases had been declared by this Act to be occupational diseases peculiar to those employments.

(4) Save as provided by [sub-sections (2), (2-A)] and (3), no compensation shall be payable to a workman in respect of any disease unless the disease is directly attributable to a specific injury by accident arising out of and in the course of his employment.

(5) Nothing herein contained shall be deemed to confer any right to compensation on a workman in respect of any injury if he has instituted in a Civil Court a suit for damages in respect of the injury against the employer or any other person; and no suit for damages shall be maintainable by a workman in any Court of law in respect of any injury-

(a) if he has instituted a claim to compensation in respect of the injury before a Commissioner; or

(b) if an agreement has been come to between the workman and his employer providing for the payment of compensation in respect of the injury in accordance with the provisions of this Act.

4. Amount of compensation. (1) Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:

(a)

Where death results from the injury

An amount equal to ] [fifty per cent.][of the monthly wages of the deceased workman multiplied by the relevant factor;

an amount of ][eighty thousand rupees][, whichever is more;

(b)

Where permanent total disablement results from the injury

An amount equal to ] [sixty per cent.][of the monthly wages of the injured workman multiplied by the relevant factor,

an amount of ] [ninety thousand rupees][whichever is more.

Explanation I .For the purposes of clause (a) and clause (b), “relevant factor”, in relation to a workman means the factor specified in the second column of Schedule IV against the entry in the first column of that Schedule specifying the number of years which are the same as the completed years of the age of the workman on his last birthday immediately preceding the date on which the compensation fell due.

Explanation II .Where the monthly wages of a workman exceed ] [four thousand rupees][, his monthly wages for the purposes of clause (a) and clause (b) shall be deemed to be ][four thousand rupees][only;

(c) Where permanent partial disablement results from the injury	(i) in the case of an injury specified in Part II of Schedule I, such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by that injury, and
	(ii) in the case of an injury not specified in Schedule I, such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner) permanently caused by the injury.

Explanation I .Where more injuries than one are caused by the same accident, the amount of compensation payable under this head shall be aggregated but not so in any case as to exceed the amount which would have been payable if permanent total disablement had resulted from the injuries.

Explanation II .In assessing the loss of earning capacity for the purposes of sub-clause (ii), the qualified medical practitioner shall have due regard to the percentages of loss of earning capacity in relation to different injuries specified in Schedule I;

(d) Where temporary disablement, whether total or partial, results from the injury

a half-monthly payment of the sum equivalent to twenty-five per cent of monthly wages of the workman, to be paid in accordance with the provisions of sub-section (2).

[(1-A) Notwithstanding anything contained in sub-section (1), while fixing the amount of compensation payable to a workman in respect of an accident occurred outside India, the Commissioner shall take into account the amount of compensation, if any, awarded to such workman in accordance with the law of the country in which the accident occurred and shall reduce the amount fixed by him by the amount of compensation awarded to the workman in accordance with the law of that country.]

[(2) The half-monthly payment referred to in clause (d) of sub-section (1) shall be payable on the sixteenth day:

(i) from the date of disablement where such disablement lasts for a period of twenty-eight days or more, or

(ii) after the expiry of a waiting period of three days from the date of disablement where such disablement lasts for a period of less than twenty-eight days; and thereafter half-monthly during the disablement or during a period of five years, whichever period is shorter:

Provided that:

(a) there shall be deducted from any lump sum or half-monthly payments to which the workman is entitled the amount of any payment or allowance which the workman has received from the employer by way of compensation during the period of disablement prior to the receipt of such lump sum or of the first half-monthly payment, as the case may be; and

(b) no half-monthly payment shall in any case exceed the amount, if any, by which half the amount of the monthly wages of the workman before the accident exceeds half the amount of such wages which he is earning after the accident.

Explanation. Any payment or allowance which the workman has received from the employer towards his medical treatment shall not be deemed to be a payment or allowance received by him by way of compensation within the meaning of clause (a) of the proviso.

(3) On the ceasing of the disablement before the date on which any half-monthly payment falls due, there shall be payable in respect of that half-month a sum proportionate to the duration of the disablement in that half-month.]

[(4) If the injury of the workman results in his death, the employer shall, in addition to the compensation under sub-section (1), deposit with the Commissioner a sum of ][two thousand and five hundred rupees][for payment of the same to the eldest surviving dependant of the workman towards the expenditure of the funeral of such workman or where the workman did not have a dependant or was not living with his dependant at the time of his death to the person who actually incurred such expenditure.]

4A. Compensation to be paid when due and penalty for default. (1) Compensation under section 4 shall be paid as soon as it falls due.

(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim.]

[(3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner shall-

(a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent. per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due; and

(b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty per cent. of such amount by way of penalty:]

[Provided that an order for the payment of penalty shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed.

Explanation. For the purposes of this sub-section, “scheduled bank” means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934).]

[(3-A) The interest and the penalty payable under sub-section (3) shall be paid to the workman or his dependant, as the case may be.]

Method of calculating wages. [In this Act and for the purposes thereof the expression “monthly wages” means the amount of wages deemed to be payable for a month’s service (whether the wages are payable by the month or by whatever other period or at piece rates) and calculated] as follows, namely:

(a) where the workman has, during a continuous period of not less than twelve months immediately preceding the accident, been in the service of the employer who is liable to pay compensation, the monthly wages of the workman shall be one-twelfth of the total wages which have fallen due for payment to him by the employer in the last twelve months of that period;

[(b) where the whole of the continuous period of service immediately preceding the accident during which the workman was in the service of the employer who is liable to pay the compensation was less than one month, the monthly wages of the workman shall be ][the average monthly amount which, during the twelve months immediately preceding the accident, was being earned by a workman employed on the same work by the same employer, or, if there was no workman so employed, by a workman employed on similar work in the same locality;]

[(c)][in other cases including cases in which it is not possible for want of necessary information to calculate the monthly wages under clause (b)], the monthly wages shall be thirty times the total wages earned in respect of the last continuous period of service immediately preceding the accident from the employer who is liable to pay compensation, divided by the number of days comprising such period.

Explanation. A period of service shall, for the purposes of [this][section], be deemed to be continuous which has not been interrupted by a period of absence from work exceeding fourteen days.

Review. (1) Any half-monthly payment payable under this Act, either under an agreement between the parties or under the order of a Commissioner, may be reviewed by the Commissioner, on the application either of the employer or of the workman accompanied by the certificate of a qualified medical practitioner that there has been a change in the condition of the workman or, subject to rules made under this Act, on application made without such certificate.

(2) Any half-monthly payment may, on review under this section, subject to the provisions of this Act, be continued, increased, decreased or ended, or, if the accident is found to have resulted in permanent disablement, be converted to the lump sum to which the workman is entitled less any amount which he has already received by way of half-monthly payments.

Commutation of half-monthly payments. Any right to receive half-monthly payments may, by agreement between the parties or, if the parties cannot agree and the payments have been continued for not less than six months, on the application of either party to the Commissioner, be redeemed by the payment of a lump sum of such amount as may be agreed to by the parties or determined by the Commissioner, as the case may be.
Distribution of compensation. [(1) No payment of compensation in respect of a workman whose injury has resulted in death, and no payment of a lump sum as compensation to a woman or a person under a legal disability, shall be made otherwise than by deposit with the Commissioner, and no such payment made directly by an employer shall be deemed to be a payment of compensation:]

[Provided that, in the case of a deceased workman, an employer may make to any dependant advances on account of compensation ] [of an amount equal to three months’ wages of such workman and so much of such amount][as does not exceed the compensation payable to that dependant shall be deducted by the Commissioner from such compensation and repaid to the employer.]

[(2) Any other sum amounting to not less than ten rupees which is payable as compensation may be deposited with the Commissioner on behalf of the person entitled thereto.

(3) The receipt of the Commissioner shall be a sufficient discharge in respect of any compensation deposited with him.]

(4) On the deposit of any money under sub-section (1), [as compensation in respect of a deceased workman] the Commissioner shall, if he thinks necessary, cause notice to be published or to be served on each dependant in such manner as he thinks fit, calling upon the dependants to appear before him on such date as he may fix for determining the distribution of the compensation. If the Commissioner is satisfied after any inquiry which he may deem necessary, that no dependant exists, he shall repay the balance of the money to the employer by whom it was paid. The Commissioner shall, on application by the employer, furnish a statement showing in detail all disbursements made.

[(5) Compensation deposited in respect of a deceased workman shall, subject to any deduction made under sub-section (4), be apportioned among the dependants of the deceased workman or any of them in such proportion as the Commissioner thinks fit, or may, in the discretion of the Commissioner, be allotted to any one dependant.

(6) Where any compensation deposited with the Commissioner is payable to any person, the Commissioner shall, if the person to whom the compensation is payable is not a woman or a person under a legal disability, and may, in other cases, pay the money to the person entitled thereto.

(7) Where any lump sum deposited with the Commissioner is payable to a woman or a person under a legal disability, such sum may be invested, applied or otherwise dealt with for the benefit of the woman, or of such person during his disability, in such manner as the Commissioner may direct; and where a half-monthly payment is payable to any person under a legal disability, the Commissioner may, of his own motion or on an application made to him in this behalf, order that the payment be made during the disability to any dependant of the workman or to any other person, whom the Commissioner thinks best fitted to provide for the welfare of the workman.]

[(8)] Where, on application made to him in this behalf or otherwise, the Commissioner is satisfied that, on account of neglect of children on the part of a parent or on account of the variation of the circumstances of any dependant or for any other sufficient cause, an order of the Commissioner as to the distribution of any sum paid as compensation or as to the manner in which any sum payable to any such dependant is to be invested, applied or otherwise dealt with, ought to be varied, the Commissioner may make such orders for the variation of the former order as he thinks just in the circumstances of the case:

Provided that no such order prejudicial to any person shall be made unless such person has been given an opportunity of showing cause why the order should not be made, or shall be made in any case in which it would involve the repayment by a dependant of any sum already paid to him.

[(9) Where the Commissioner varies any order under sub-section (8) by reason of the fact that payment of compensation to any person has been obtained by fraud, impersonation or other improper means, any amount so paid to or on behalf of such person may be recovered in the manner hereinafter provided in section 31.]

Compensation not to be assigned, attached or charged. Save as provided by this Act, no lump sum or half-monthly payment payable under this Act shall in any way be capable of being assigned or charged or be liable to attachment or pass to any person other than the workman by operation of law, nor shall any claim be set off against the same.
Notice and claim. (1) [No claim for compensation shall be entertained by a Commissioner unless notice of the accident has been given in the manner hereinafter provided as soon as practicable after the happening thereof and unless the claim is preferred before him within ] [two years][of the occurrence of the accident or, in case of death, within ] [two years][from the date of death:]

Provided that, where the accident is the contracting of a disease in respect of which the provisions of sub-section (2) of section 3 are applicable, the accident shall be deemed to have occurred on the first of the days during which the workman was continuously absent from work in consequence of the disablement caused by the disease:

[Provided further that in case of partial disablement due to the contracting of any such disease and which does not force the workman to absent himself from work, the period of two years shall be counted from the day the workman gives notice of the disablement to his employer:

Provided further that if a workman who, having been employed in an employment for a continuous period, specified under sub-section (2) of section 3 in respect of that employment, ceases to be so employed and develops symptoms of an occupational disease peculiar to that employment within two years of the cessation of employment, the accident shall be deemed to have occurred on the day on which the symptoms were first detected:]

[Provided further that the want of or any defect or irregularity in a notice shall not be a bar to the ][entertainment of a claim]:

[(a) if the claim is ][preferred][in respect of the death of a workman resulting from an accident which occurred on the premises of the employer, or at any place where the workman at the time of the accident was working under the control of the employer or of any person employed by him, and the workman died on such premises or at such place, or on any premises belonging to the employer, or died without having left the vicinity of the premises or place where the accident occurred, or

(b) if the employer ] [or any one of several employers or any person responsible to the employer for the management of any branch of the trade or business in which the injured workman was employed][had knowledge of the accident from any other source at or about the time when it occurred:]

Provided further that the Commissioner may [entertain] and decide any claim to compensation in any case notwithstanding that the notice has not been given, or the claim has not been [preferred], in due time as provided in this sub-section, if he is satisfied that the failure so to give the notice or [prefer] the claim, as the case may be, was due to sufficient cause.

(2) Every such notice shall give the name and address of the person injured and shall state in ordinary language the cause of the injury and the date on which the accident happened, and shall be served on the employer or upon [any one of] several employers, or upon any person responsible to the employer for the management of any branch of the trade or business in which the injured workman was employed.

[(3) The State Government may require that any prescribed class of employers shall maintain at their premises at which workmen are employed a notice book, in the prescribed form, which shall be readily accessible at all reasonable times to any injured workman employed on the premises and to any person acting bona fide on his behalf.

(4) A notice under this section may be served by delivering it at, or sending it by registered post addressed to, the residence or any office or place of business of the person on whom it is to be served, or, where a notice book is maintained, by entry in the notice book.]

[10A. Power to require from employers statements regarding fatal accidents. (1) Where a Commissioner receives information from any source that a workman has died as a result of an accident arising out of and in the course of his employment, he may send by registered post a notice to the workman’s employer requiring him to submit, within thirty days of the service of the notice, a statement, in the prescribed form, giving the circumstances attending the death of the workman, and indicating whether, in the opinion of the employer, he is or is not liable to deposit compensation on account of the death.

(2) If the employer is of opinion that he is liable to deposit compensation, he shall make the deposit within thirty days of the service of the notice.

(3) If the employer is of opinion that he is not liable to deposit compensation, he shall in his statement indicate the grounds on which he disclaims liability.

(4) Where the employer has so disclaimed liability, the Commissioner, after such inquiry as he may think fit, may inform any of the dependants of the deceased workman that it is open to the dependants to prefer a claim for compensation, and may give them such other further information as he may think fit.

10B. Reports of fatal accidents and serious bodily injuries. (1) Where, by any law for the time being in force, notice is required to be given to any authority, by or on behalf of an employer, of any accident occurring on his premises which results in death ][or serious bodily injury][, the person required to give the notice shall, within seven days of the death ][or serious bodily injury][, send a report to the Commissioner giving the circumstances attending the death ][or serious bodily injury][:

Provided that where the State Government has so prescribed the person required to give the notice may instead of sending such report to the Commissioner send it to the authority to whom he is required to give the notice.]

[ Explanation. “Serious bodily injury” means an injury which involves, or in all probability will involve, the permanent loss of the use of, or permanent injury to, any limb, or the permanent loss of or injury to the sight or hearing, or the fracture of any limb, or the enforced absence of the injured person from work for a period exceeding twenty days.]

[(2) The State Government may, by notification in the Official Gazette, extend the provisions of sub-section (1) to any class of premises other than those coming within the scope of that sub-section, and may, by such notification, specify the persons who shall send the report to the Commissioner.]

[(3) Nothing in this section shall apply to factories to which the Employees’ State Insurance Act, 1948 (34 of 1948), applies.]

Medical examination. (1) Where a workman has given notice of an accident, he shall, if the employer, before the expiry of three days from the time at which service of the notice has been effected, offers to have him examined free of charge by a qualified medical practitioner, submit himself for such examination, and any workman who is in receipt of a half-monthly payment under this Act shall, if so required, submit himself for such examination from time to time:

Provided that a workman shall not be required to submit himself for examination by a medical practitioner otherwise than in accordance with rules made under this Act, or at more frequent intervals than may be prescribed.

(2) If a workman, on being required to do so by the employer under sub-section (1) or by the Commissioner at any time, refuses to submit himself for examination by a qualified medical practitioner or in any way obstructs the same, his right to compensation shall be suspended during the continuance of such refusal or obstruction unless, in the case of refusal, he was prevented by any sufficient cause from so submitting himself.

(3) If a workman, before the expiry of the period within which he is liable under sub-section (1) to be required to submit himself for medical examination, voluntarily leaves without having been so examined the vicinity of the place in which he was employed, his right to compensation shall be suspended until he returns and offers himself for such examination.

(4) Where a workman, whose right to compensation has been suspended under sub-section (2) or sub-section (3), dies without having submitted himself for medical examination as required by either of those sub-sections, the Commissioner may, if he thinks fit, direct the payment of compensation to the dependants of the deceased workman.

(5) Where under sub-section (2) or sub-section (3) a right to compensation is suspended, no compensation shall be payable in respect of the period of suspension, and, if the period of suspension commences before the expiry of the waiting period referred to in clause (d) of sub-section (1) of section 4, the waiting period shall be increased by the period during which the suspension continues.

(6) Where an injured workman has refused to be attended by a qualified medical practitioner whose services have been offered to him by the employer free of charge or having accepted such offer has deliberately disregarded the instructions of such medical practitioner, then, [if it is proved that the workman has not thereafter been regularly attended by a qualified medical practitioner or having been so attended has deliberately failed to follow his instructions and that such refusal, disregard or failure was unreasonable] in the circumstances of the case and that the injury has been aggravated thereby, the injury and resulting disablement shall be deemed to be of the same nature and duration as they might reasonably have been expected to be if the workman had been regularly attended by a qualified medical practitioner, and compensation, if any, shall be payable accordingly.

Contracting. (1) Where any person (hereinafter in this section referred to as the principal) in the course of or for the purposes of his trade or business contracts with any other person (hereinafter in this section referred to as the contractor) for the execution by or under the contractor of the whole or any part of any work which is ordinarily part of the trade or business of the principal, the principal shall be liable to pay to any workman employed in the execution of the work any compensation which he would have been liable to pay if that workman had been immediately employed by him; and where compensation is claimed from the principal, this Act shall apply as if references to the principal were substituted for references to the employer except that the amount of compensation shall be calculated with reference to the wages of the workman under the employer by whom he is immediately employed.

(2) Where the principal is liable to pay compensation under this section, he shall be entitled to be indemnified by the contractor, [or any other person from whom the workman could have recovered compensation and where a contractor who is himself a principal is liable to pay compensation or to indemnify a principal under this section he shall be entitled to be indemnified by any person standing to him in the relation of a contractor from whom the workman could have recovered compensation,] and all questions as to the right to and the amount of any such indemnity shall, in default of agreement, be settled by the Commissioner.

(3) Nothing in this section shall be construed as preventing a workman from recovering compensation from the contractor instead of the principal.

(4) This section shall not apply in any case where the accident occurred elsewhere that on, in or about the premises on which the principal has undertaken or usually undertakes, as the case may be, to execute the work or which are otherwise under his control or management.

Remedies of employer against stranger. Where a workman has recovered compensation in respect of any injury caused under circumstances creating a legal liability of some person other than the person by whom the compensation was paid to pay damages in respect thereof, the person by whom the compensation was paid and any person who has been called on to pay an indemnity under section 12 shall be entitled to be indemnified by the person so liable to pay damages as aforesaid.

Rules as to Compensation (Sec 4 to 9) (Sec 14A & 17)

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14A. Compensation to be first charge on assets transferred by employer: Where an employer transfers his assets before any amount due in respect of any compensation, the liability where for accrued before the date of the transfer, has been paid, such amount shall, notwithstanding anything contained in any other law for the time being in force, be a first charge on that part of the assets so transferred as consists of immovable property.

Special provisions relating to masters and seamen. This Act shall apply in the case of workmen who are masters of ships or seamen subject to the following modifications, namely:

(1) The notice of the accident and the claim for compensation may, except where the person injured is the master of the ship, be served on the master of the ship as if he were the employer, but where the accident happened and the disablement commenced on board the ship it shall not be necessary for any seaman to give any notice of the accident.

(2) In the case of the death of a master or seaman, the claim for compensation shall be made within [one year] after the news of the death has been received by the claimant or, where the ship has been or is deemed to have been lost with all hands, within eighteen months of the date on which the ship was, or is deemed to have been, so lost:

Provided that the Commissioner may entertain any claim to compensation in any case notwithstanding that the claim has not been preferred in due time as provided in this sub-section, if he is satisfied that the failure so to prefer the claim was due to sufficient cause.

(3) Where an injured master or seaman is discharged or left behind in any part of [India or] [in any foreign country], any depositions taken by any Judge or Magistrate in that part or by any Consular Officer in the foreign country and transmitted by the person by whom they are taken to the Central Government or any State Government shall, in any proceedings for enforcing the claim, be admissible in evidence:

(a) if the deposition is authenticated by the signature of the Judge, Magistrate or Consular Officer before whom it is made;

(b) if the defendant or the person accused, as the case may be, had an opportunity by himself or his agent to cross-examine the witness; and

(c) if the deposition was made in the course of a criminal proceeding, on proof that the deposition was made in the presence of the person accused, and it shall not be necessary in any case to prove the signature or official character of the person appearing to have signed any such deposition and a certificate by such person that the defendant or the person accused had an opportunity of cross-examining the witness and that the deposition if made in a criminal proceeding was made in the presence of the person accused shall, unless the contrary is proved, be sufficient evidence that he had that opportunity and that it was so made.

15A. Special provisions relating to captains and other members of crew of aircrafts. This Act shall apply in the case of:

Workmen who are captains or other members of the crew of aircrafts subject to the following modifications, namely:

(1) The notice of the accident and the claim for compensation may, except where the person injured is the captain of the aircraft, be served on the captain of the aircraft as if he were the employer, but where the accident happened and the disablement commenced on board the aircraft, it shall not be necessary for any member of the crew to give notice of the accident.

(2) In the case of the death of the captain or other member of the crew, the claim for compensation shall be made within one year after the news of the death has been received by the claimant or, where the aircraft has been or is deemed to have been lost with all hands, within eighteen months of the date on which the aircraft was, or is deemed to have been, so lost:

Provided that the Commissioner may entertain any claim for compensation in any case notwithstanding that the claim has not been preferred in due time as provided in this sub-section, if he is satisfied that the failure so to prefer the claim was due to sufficient cause.

(3) Where an injured captain or other member of the crew of the aircraft is discharged or left behind in any part of India or in any other country, any depositions taken by any Judge or Magistrate in that part or by any Consular Officer in the foreign country and transmitted by the person by whom they are taken to the Central Government or any State Government shall, in any proceedings for enforcing the claims, be admissible in evidence:

(a) if the deposition is authenticated by the signature of the Judge, Magistrate or Consular Officer before whom it is made;

(b) if the defendant or the person accused, as the case may be, had an opportunity by himself or his agent to cross-examine the witness;

16. Returns as to compensation: The [State Government] may, by notification in the Official Gazette, direct that every person employing workmen, or that any specified class of such persons, shall send at such time and in such form and to such authority, as may be specified in the notification, a correct return specifying the number of injuries in respect of which compensation has been paid by the employer during the previous year and the amount of such compensation together with such other particulars as to the compensation as the [State Government] may direct.

Contracting out: Any contract or agreement whether made before or after the commencement of this Act, whereby a workman relinquishes any right of compensation from the employer for personal injury arising out of or in the course of the employment, shall be null and void insofar as it purports to remove or reduce the liability of any person to pay compensation under this Act.

17A. Duty of employer to inform employee of his rights: Every employer shall immediately at the time of employment of an employee, inform the employee of his rights to compensation under this Act, in writing as well as through electronic means, in English or Hindi or in the official language of the area of employment, as may be understood by the employee.

The Doctrine of Assumed Risk

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The Doctrine of Assumed Risks: If the employee knew the nature of the risks he was undertaking when working in a factory, the employer had no liability for injuries. The court assumed in such case that the workman had voluntarily accepted the risks incidental to his work. The doctrine followed from the rule Volenti Non-Fit Injuria, which means that one, who has volunteered to take a risk of injury, is not entitled to damages if injury actually occurs.

The Doctrine of Common Employment: Under this rule, if a number of persons work together for a common purpose and one of them is injured by some act or omission of another, the employer is not liable to pay compensation for the injury.

The Doctrine of Contributory Negligence: Under this rule, a person is not entitled to damages for injury if he was himself guilty of negligence and such negligence resulted to the injury.

The three aforesaid defences and the rule of no negligence no liability made it almost impossible for an employee to obtain relief in cases of accident. The Workmen’s Compensation Act of 1923 completely changed the law. According to the Workmen Compensation Act, 1923 the employer is liable to pay compensation irrespective of negligence. The Act considers compensation as relief to the workman and not as damages payable by the employer for a wrongful act or tort. Hence contributory negligence by the employee does not debar him from relief. For the same reason, it is not possible for the employer to plead to the defence of common employment or assumed risks for avoiding liability. Thus, the Act makes it possible for the workman to get compensation for injuries, unhindered by the legal obstacles set up by the law of Torts.

Factories Act 1948 Meaning, Definition

by indiafreenotes01/01/202121/05/20242

Factories Act of 1948 is a comprehensive piece of legislation enacted by the Indian Parliament to regulate labor in factories. Its primary objective is to ensure adequate safety measures, promote the health and welfare of workers, and regulate working conditions in factories. This Act plays a crucial role in safeguarding workers’ rights and improving working environments across India.

Historical Background

The need for labor regulation in India emerged during the British colonial period due to the rapid industrialization and exploitation of workers. The first Factories Act was passed in 1881, focusing mainly on child labor. Subsequent amendments and new legislations, such as the Factories Act of 1911, expanded the scope to include women’s working hours and introduced measures for workers’ health and safety. The Factories Act of 1948 is the culmination of these efforts, incorporating various improvements and extending its applicability to a broader range of industries.

Key Provisions of the Factories Act, 1948

Factory:

Any premises where ten or more workers are employed with power, or twenty or more workers without power, to carry out a manufacturing process.

Worker:

A person employed directly or indirectly, with or without remuneration, in any manufacturing process, cleaning, or any incidental work related to the factory.

Manufacturing Process:

Any process involving making, altering, repairing, or ornamenting products.

Health Provisions

The Act mandates several health-related provisions to ensure a safe and healthy work environment:

Cleanliness:

Factories must be kept clean, including provisions for regular removal of waste and maintaining cleanliness of floors, walls, and workrooms.

Waste Disposal:

Effective arrangements for the disposal of waste and effluents are required.

Ventilation and Temperature:

Factories must have adequate ventilation and maintain a comfortable temperature for workers.

Dust and Fumes:

Measures must be taken to prevent the inhalation of dust and fumes.

Artificial Humidification:

Factories using artificial humidification must ensure it does not exceed prescribed levels.

Lighting:

Adequate natural or artificial lighting must be provided.

Drinking Water:

Safe and wholesome drinking water must be made available to all workers.

Latrines and Urinals:

Sufficient and clean latrine and urinal facilities must be provided separately for male and female workers.

Spittoons:

Sufficient spittoons must be provided and maintained in a clean and hygienic condition.

Safety Provisions

The Act outlines safety measures to protect workers from accidents and occupational hazards:

Fencing of Machinery: Dangerous parts of machinery must be securely fenced.
Work on or Near Machinery in Motion: Specific provisions are made for workers to safely work on or near machinery in motion.
Employment of Young Persons on Dangerous Machines: Young persons are prohibited from working on dangerous machines unless adequately trained and supervised.
Striking Gear and Devices for Cutting Off Power: Factories must have devices to safely cut off power in emergencies.
Self-Acting Machines: Restrictions are placed on the operation of self-acting machines.
Casing of New Machinery: New machinery must be suitably cased to ensure safety.
Prohibition of Employment of Women and Children Near Cotton-Openers: Women and children are prohibited from working near cotton-openers.
Hoists and Lifts: Hoists and lifts must be of sound construction, properly maintained, and tested periodically.
Lifting Machines and Tackle: Safe working loads must be marked on lifting machines and tackles, and they must be maintained and tested regularly.
Revolving Machinery: Safety measures must be taken to prevent accidents involving revolving machinery.
Pressure Plant: Safe operation and maintenance of pressure plants are required.
Floors, Stairs, and Means of Access: Safe construction and maintenance of floors, stairs, and access points are mandated.
Pits, Sumps, Openings in Floors: Pits and openings in floors must be securely covered or fenced.
Excessive Weights: Workers should not be required to lift excessive weights without proper aids.
Protection of Eyes: Adequate eye protection must be provided for processes involving risks to the eyes.
Precautions Against Dangerous Fumes, Gases, etc.: Measures must be taken to prevent workers from exposure to dangerous fumes and gases.
Precautions Regarding the Use of Portable Electric Light: Safe use of portable electric lights is ensured.
Explosive or Inflammable Dust, Gas, etc.: Precautions must be taken to prevent explosions or fires from flammable substances.
Precautions in Case of Fire: Adequate fire-fighting equipment and training must be provided.
Safety Officers: Factories employing a certain number of workers must appoint safety officers.

Welfare Provisions

The Act includes several welfare measures to enhance workers’ well-being:

Washing Facilities: Adequate washing facilities must be provided.
Facilities for Storing and Drying Clothing: Proper arrangements for storing and drying clothing must be made.
Facilities for Sitting: Suitable arrangements for sitting must be provided, particularly for workers who are required to stand.
First-Aid Appliances: First-aid boxes or cupboards equipped with prescribed contents must be available.
Canteens: Factories with more than 250 workers must provide and maintain canteens.
Shelters, Restrooms, and Lunch Rooms: Suitable shelters, restrooms, and lunch rooms must be provided for workers.
Creches: Factories employing a certain number of women workers must provide crèches for children.
Welfare Officers: Factories employing a certain number of workers must appoint welfare officers.

Working Hours and Annual Leave

The Act regulates working hours, rest intervals, and leave entitlements:

Working Hours: Adult workers should not work more than 48 hours a week and not more than 9 hours a day.
Weekly Holidays: Workers are entitled to one whole day of rest every week.
Overtime: Workers must be paid twice their regular rate for overtime work.
Intervals for Rest: Workers must have adequate intervals for rest during work hours.
Annual Leave with Wages: Workers who have worked for at least 240 days in a year are entitled to annual leave with wages, calculated based on the number of days worked.

Employment of Young Persons

The Act imposes restrictions on the employment of young persons to ensure their safety and welfare:

Prohibition of Employment of Young Children:

Children below the age of 14 are prohibited from working in factories.

Adolescent Workers:

Adolescents (aged 15-18) must obtain a fitness certificate from a certifying surgeon before being employed.

Working Hours for Young Persons:

Restrictions on working hours and conditions for young persons are specified to prevent exploitation and ensure their health and safety.

Hazardous Processes

The Act includes specific provisions for factories involving hazardous processes:

Site Appraisal Committees:

Factories involving hazardous processes must obtain site appraisals from designated committees.

Compulsory Disclosure of Information:

Employers must disclose information regarding hazards and measures taken for the safety of workers.

Permissible Limits of Exposure:

Permissible limits for exposure to hazardous substances are prescribed.

Workers’ Participation in Safety Management:

Workers must be involved in safety management through safety committees.

Right to Warn about Imminent Danger:

Workers have the right to warn about imminent danger and evacuate in case of emergencies.

Administration and Enforcement

Factories Act, 1948, is administered by both the Central and State governments. The primary responsibility for enforcing the provisions of the Act lies with the State Governments, which appoint Factory Inspectors to ensure compliance. The Act also provides for the appointment of certifying surgeons to conduct health check-ups and issue fitness certificates to workers.

Penalties

The Act prescribes penalties for non-compliance with its provisions, including fines and imprisonment for employers who violate health, safety, and welfare regulations. It also includes provisions for appeals and adjudication of disputes arising under the Act.

Amendments and Updates

Factories Act, 1948, has been amended several times to address emerging industrial challenges and align with evolving labor standards. Notable amendments include provisions for extending the applicability of the Act to newer industries, enhancing safety measures, and improving workers’ welfare.

Month: January 2021

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