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
- Policy do not cover injuries which does not result total or partial disablement of the employee for a period exceeding three days
- 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
- Heart attack will not be covered
- To and fro to office/residence if any accidental claim triggers same will not be covered
- Contribution to the policy premium can only be from Employer and not from employee.
- 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.
