Report No. 134

Removing Deficiencies in Certain Provisions of the Workmen's Compensation Act, 1923

Chapter I

Introduction

1.1. Concern for the workers who sweat for the 'immediate' benefit of the employer and the 'ultimate' benefit of the Nation is understandable. There is greater reason for concern when workers engaged in hazardous occupations sustain injuries resulting in temporary, partial, or permanent disablement or 'lose' their lives in the course of and arising out of such employment. That is the raison d'etre for the Workmen's Compensation Act of 1923.

1.2. The Act in its entirety was taken up for revision by the Law Commission of India (L.C.I.) at the initiative of the Government upon a reference being made to it. The L.C.I. presented its report in October, 1974 after the survey and scrutiny of the Act as a whole. That is the main reason why the present exercise has been restricted to the scrutiny of only some of the provisions which call for attention in the light of the felt need to remove the deficiencies which were noticed, erase the creases which came to light, and to update the provisions.

1.3.1. On May 12, 1984, nearly ten years after the 62nd Report was presented by the L.C.I., the Act was amended with the evident object of making it more benevolent. Coverage was extended even to workmen whose monthly wages exceeded Rs. 1000 (who were till then not protected by the Act). Apparently, this was done upon realising that the plight of the workman who sustained injuries rendering him temporarily, partially, or permanently incapable to work, or of the dependants of a deceased workman earning Rs. 1000 plus, could not be less pathetic than that of a workman earning Rs. 1000 or less. A great stride was thus taken in the area of social and economic justice by so amending the definition of "workman" embodied in section 2 in conformity with the recommendation made in the 62nd report of the L.C.I.

1.3.2. Another measure adopted was that of substituting a new section 4 with an appropriate schedule based on the age of the concerned workman and a multiple factor to be applied to his monthly wages for computing compensation. But while extending coverage to workmen earning monthly wages of Rs. 1000 plus, and defining the quantum of compensation on the basis of the relevant factor, a rider was added in the form of Explanation II creating a fiction that the concerned workman's wages would be "deemed" to be only Rs. 1000 even if the wages in actuality were in excess of Rs. 1000.

1.3.3. It needs to be mentioned that the rider added as per Explanation II in 1984 was not mooted or inspired by the L.C.I. in its 62nd Report made in 1974.

1.4. The stream of time has rapidly flown and has in the course of its journey revealed a number of deficiencies in the existing provisions of the Act and also the need for improving and updating the same. Hence this suo motu exercise.

1.5. We hope and trust that the recommendations being made by this report will ameliorate the distress of the injured workman, and of the dependants of the deceased workman who loses his life in the course of and arising out of the employment covered by the Act. At the same time these recommendations will not cast any unreasonable burden on the employer even if the employer has not made arrangements for 'self-insurance' or insurance with an insurance company.

1.6. We accordingly proceed to identify the provisions which need overhauling and to examine the issues involved in the present exercise.