Workmen’s /Employee Compensation Policy

Workmen’s /Employee Compensation Policy

It is an Act to provide for the payment by certain classes of employers to their [Employees] of compensation for injury by accident.

It is a welfare legislation and its object is that the compensation for injury or death sustained by the workman be paid to him or his family members without any delay.

The growing complexity of industry in this country, with the increasing use of machinery and consequent danger to employees along with the comparative poverty of the employees themselves renders it advisable that they should be protected as far as possible, from hardship arising out of  accidents. A legislation of this kind helps to reduce the number of accidents in a manner and that cannot be achieved by official inspection, and to mitigate the effect of accidents by provision for suitable medical treatment, thereby making industry more attractive to labour and increasing its efficiency. The Act provides for cheaper and quicker disposal of disputes relating to compensation through special tribunals than possible under the civil law

The employers’ legal liability under the E.C. Act, 1923 to pay compensation to employees not covered under E.S.I.Act’1948 for bodily injury or disease sustained / contracted out of and in the course of employment is covered by this policy. Liability to employees under Indian Fatal Accident Act 1855 and at Common Law are also covered under the policy.

Coverage limit for employees has been revised  w.e.f 31st May 10 by Ministry of Labour & employment through Gazette notification fixing Rs.8000/- as monthly wages.

EC /WC cost is calculated based on industry type, nature of duties, amount of risks involved & Gross salary of an employee. Rates are divided into  two slabs which determines the calculation  on the gross salary. Rates will be as per WC / EC Tariffs. First slab rate will  be applied on the first 8k of the salary and second slab rate will be  applied on the balance gross salary

Coverage

Covers all those who are under ESI and working in Non-ESI implemented      area employed in Mines, Ports, Factories, Construction projects, Shops & Establishment

Covers all those who are out of ESI bracket whether in an implemented or non-implemented zones

Why EC cover is required ?

To protect interest of employees through payment of Compensation for meeting any accident while on work. Since immediate funding of compensation may not be possible for an employer to arrange, subscribing the risk of funding compensation is desirable.

       

What is the benefit ?

If any death occurs while in course of  employment due to accident employer

will be liable to pay compensation to the beneficiary of the family. In the absence of ESI employee compensation  policy will come as a rescue and support for compensation to the employer by way of insurance policy placed. ( Employee  Compensation Policy).Basically it covers the  risk of  Employers’s liability.

What does EC cover ?

EC covers accidental death, permanent & temporaty (total & partial) disablement, occupational diseases arising out in the course of employment   as per Schedule I, II & III of the E.C. Act,1923.

       

Who should contribute ?

      

As the policy covers the risk of the Employer there can be contribution only from employer and not from employee as deduction from Salary.    

Do’s

Employees are to observe safety & security rules of the organization. Any deviation will disentitle them from the benefits

Employers to ensure that claimable compensation for any accidental injury or occupational diseases must have arisen out of & in the course of employment. Necessary documentation as per the EC Policy from Insurer has to be listed & kept ready for reference in the event of any accident.

     

Don’ts

1. Policy do not cover injuries which does not result total or partial disablement of the employee for a period exceeding three days
2. Injury  not resulting in death or permanent total disablement caused by an accident which is directly attributable the employee having been under influence of drink of drugs, or willful disobedience of the employee to an order expressly given or to a rule expressly framed for ensuring safety or willful removal or disregard of any safety guard or other device which he knew  to have been provided for the purpose  of securing the safety of employees
3. Heart attack will not be covered
4. To and fro to office/residence if any accidental claim triggers same will not be covered
5. Contribution to the  policy premium can only be from Employer and not from employee.
6. Medical extension is not covered.

Compensation

A. Death from Injury:

 

Min Compensation- Rs.1,20,000/- OR 50% Of monthly wages X applicable age multiplier whichever is higher.

B.Permananent Total Disablement (PTD):

Min Compensation- Rs. 1,40,000/- OR 60% Of monthly wages X applicable age multiplier whichever is higher.

C. Permananent Partial Disablement (PPD)

       As per % of loss of earning capacity it varies from  1% to 90% - as specified in Part II of Schedule I & if not mentioned in Sch-I such %age 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 cause by the injury

D. Temporary Disablement (TTD):

    As per Policy terms

Compensation  in case of Death

Death from Injury:

Amount = 50% of monthly salary X Age factor OR Rs 1,20,000/-,

      which ever  is more.

Example: Age -23,monthly Salary Rs 8000,

    (Age factor for age 23 is 221.37)

 

Amount-  4000(50% of Salary) X 221.37= 885480/-

Process on EC claim

•The death gets reported to the Employees’ Compensation Commissioner (Labour  Commissioner(LC))of that jurisdiction  by submitting             FORM EEE – report of fatal accident

•Employees’ Compensation Commissioner verifies and passed award of compensation ( =8000*50%* age multiplier)

•Once an award is passed within 30day the same has to be deposited with  the Employees’ Compensation Commissioner by way of DD

•Copy of the award and DD submission proof along with documents needs to be submitted to insurer to claim this as reimbursement

Documents required for settlement of claims

Intimation at the earliest

Claim form duly completed in every respect.

Medical Certificate

Wages Statement & Attendance register

Proof of age - as recorded by the employer

Original death certificate, FIR,PM report.

Other documents if required.