Thursday, April 1, 2021

Workmen compensation claim - DCL decision on employment relationship

Misfortunes can occur at any workplace harming those at work. Duty is cast on the  Employer to pay compensation arising out of  personal injury  / death  caused to a workman at such workplace.  Employees Compensation Act  [ Workmen Compensation Act 1923] – provides for payment of compensation by the employer to his employees (or their dependents in the event of fatal accidents) in respect of personal injury due to accidents arising out of and in the course of their employment.   The beneficial enactment  aims not at compensating the workmen the wages,  but provides for  compensation for the injury or death.  The amount of compensation depends on the nature of the injury and the average monthly wages and age of workmen.



There are various labour laws having their own definition.   Under Industrial Dispute Act  'workman' means any person employed (including an apprentice) in any industry to do any skilled or unskilled, manual or clerical work for hire or reward and includes, for the purposes of any proceeding under this Act in relation to an industrial dispute, a workman discharged during that dispute, but does not include any person employed in the naval, military, or air service of the Crown." 

The one relevant to the topic – WC Act  defines "workman" as  any person (other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's trade or business) .  Thus it would mean that the person is not employed as a casual workman and that his employment is in connection with the employer’s trade and business.    The Act lists out various  categories of employees who would fall within the purview of workmen as specified.  

WC Insurance ie., providing coverage to the Employer against liability towards their workmen has been in vogue for decades.  The Insurance Policies can cover only the liability under WC Act or can cover the Act liability, Fatal Accidents Act and Common Law.  Recently, by  gazette notification CG-DL-E-04012020-215147 of 3rd Jan 2020 –Central Government hereby specified that for the purposes of sub-section (1) of the said section, the monthly wages,  would be “Fifteen thousand rupees”, thereby increasing manifold the value of compensation payable. -   perhaps not many of us would have noticed and fully understood the implications of one earlier  notification done with the assent of President on 22.12.2009 known as The Workmen’s Compensation (Amendment) Act 2009. 

The quintessential requirement is employment and such injury / death – ‘arising out of and in the course of employment’ – the causal connection between the injury/ accident and employment will have to be thoroughly established. In practice, WC cases are always handled sympathetically and Courts / Forums / Labour Commissioners tend to order payments once employment is established. Again, there may not be any pleadings by the employer at all – and hence issues would get settled easily.

In this background – here is an interesting case arising out of death of a cleaner working in a JCB insured with a leading Private Insurer  for the period 29.8.2012 to 28.8.2013 covering Caterpillar Backhoe loader under Motor Insurance Policy which obviously covers Third Party (Act Only liability) [also liability towards workmen engaged]

In 2014 – a petition was filed before Dy Commissioner of Labour, Salem claiming that on 3.10.2012, one Mr Govindasamy aged 19, travelled as a workman in the earth moving equipment (JCB) and was cleaning the vehicle in a water source. He allegedly fell down from the vehicle, was taken to a nearby hospital but succumbed to injuries not responding to treatment and died on 9.10.2012. FIR was filed and investigation too proved that the death was genuine and arising out of the said accident.  An amount of Rs.10,00,000/- was claimed against the Owner of the vehicle and Insurers as R2.  In simple terms, with death established related to a vehicle accident – the compensation would have been 12000 x50% x  225.32 = 13,51,920/-

It was ascertained that the victim had indeed travelled in the vehicle, was engaged in washing the vehicle, when he lost balance, slipped and fell down, eventually resulting in his death.  It was claimed that the victim was working in the vehicle employed by the owner of the vehicle.  The first opposite party did not appear and many a times, employment and other aspects would have been accepted as it is by the Commissioner.

However, in this case, it was pointed out and forcefully argued by the Insurer  that there was no employment – and the fact that the deceased was the son of the owner of the vehicle.  It was argued that the son had merely travelled with his father and was not under employment. The Commissioner concluded that there was ‘no employer – employee’ relationship and hence the petition was not maintainable.  The petition was dismissed, resulting in savings for the Insurer.

It is of concern to note that a petition pertaining to an accident on 3.10.2012 had taken almost a decade and was decided on 7.1.2021. There are learnings for all. It must be understood that there is legally no bar in employing the kith and kin of vehicle owner – and many a times, vehicles (such as autorickshaws registered in the name of mother / wife) with son / husband driving have been awarded under WC treating them as workplace related injuries. 

With regards – S. Sampathkumar
17.3.2021. 

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