Employer’s Liability

Employers were never under any obligation under common law to provide sustenance to an economically inactive worker. The employer was only liable to pay compensation for the damage caused to the worker by a personal act or negligence by the employer. In addition, the trend of decisions has been to increase the area of duty that the employer owes to his workers. Thus, the doctrine of volenti non-fit injuria was considerably negated by the requirement that the master is liable in negligence for violation of the primary duty:

  1. to provide the staff;
  2. to provide Suitable materials such as (proper machinery, installations, appliances, and other materials)
  3. Institute and maintain a proper and secure working system with effective supervision where necessary.[1]

The relationship between master and servant arises where one person, for payment or other consideration, enters the service of another and devotes his personal labor to him for an agreed period. This is a relationship where the employer may select the employee, the power to end and discharge the employee, and the right to control both what work is to be done and the manner in which it is to be done. This relationship has usually been replaced by the word “employer and employee.” Several statutes allow for the payment of compensation or damages to the worker or his or her family or dependents in the event of harm to the worker. The Employer’s Liability Act, 1938, excludes certain defenses arising from injuries sustained by workers, and the Employee’s Compensation Act, 1923, protects a worker against loss or damage incurred by an incident arising from and in employment.

The Employer’s Liability Act 1938

The Employer’s Liability Bill was passed and became an Act on 24-9-1938. The legislative history of the act – Under the common law of England, it is open to the employer to plead defences in civil suits for injuries sustained by workers.

  1. The doctrine of common employment –  according to which the employer is not normally liable to pay damages to a worker for injury resulting from the default of another worker;
  2. The doctrine of assumed risk – according to which an employee is presumed to have accepted risk if it is such that he’s already known that it is part of the risks of his occupation.

Both these doctrines were considered inequitable by the Royal Labor Commission and the majority recommended that a measure repealing these defenses be enacted.[2]

Section 2 of the act defines workman and employed as follows

  1. “workman”  means any person who has entered, or works on, a contract of service or apprenticeship with an employer, whether through manual labor, clerical work or otherwise, and whether the contract is expressed or implied, oral or written.
  2. “employer” includes any body of persons, whether incorporated, any managing agent of the employer, and the legal representatives of the deceased employer, and where the services of the worker are temporarily lent or lent to another person by the person with whom the worker has entered a contract of service or apprenticeship, means that other person while the worker works for him.

Section 3 of the Employer’s Liability Act excludes certain defenses arising from injuries sustained by workers:

  1. If such injury caused because of omission by the employer Or, omission by any person in the employer’s service who has been entrusted with the duty to see that such work, machinery or plant is in pleasant condition.
  2. If such injury caused because of the negligence of  any person to whom the employee has entrusted superintendence
  3. If the injury caused by negligence by any person in the employer’s service to whose order or direction, the worker was bound to comply at the time of the injury.
  4. If the injury caused by the act or omission of any person in the employer’s service
  5. In the normal performance of the duties of the worker.
  6. In obedience to any rule or bye-law made by the employer.
  7. In obedience to the specific instructions given by any other person to whom the employer has delegated authority.

The Employee’s Compensation Act 1923

The Worker’s Compensation Act of 1923 is one of the earliest pieces of labor legislation. It covers all cases of ‘accident resulting from and in the course of employment, and the rate of compensation to be paid for a lump sum shall be determined on a schedule that is proportionate to the extent of the injury and the loss of earning capacity.[3] The general principle is that compensation should generally be given to workers who have sustained personal injuries as a result of incidents arising from and in the course of their employment.

Section 3 of the Employee’s Compensation Act lays down certain essentials to be fulfilled in order to claim compensation under the act.

  1. When a personal injury has been sustained by the employee:
  2. If such personal injury has been caused as a result of an accident:
  3. If such an accident has arisen out of and in the course of employment:
  4. If such injury resulted in a permanent or partial disability of the employee.
  5. If the accident resulted in the death of the employee[4]
  1. When a personal injury has been sustained by the employee:

If an employee has suffered any personal injury as a result of an accident while working in an establishment, the employer shall be liable to compensate that employee. Personal injury has not been defined by the Act. However, personal injury is an injury to the body, intellect, or reputation of a person due to negligence, recklessness, or illegitimate conduct.

  • If such personal injury has been caused as a result of an accident:

In order to claim compensation from the employer, the employee must prove that those personal injuries resulted from an accident while performing his indispensable duties. The term accident is not clearly given under the Act. An accident, in a normal way, can mean an unexpected event that causes harm to a person. An accident cannot be predicted to allow any person to save themselves from any kind of harm or injury. Likewise, the employee can not predict any accident that would have caused him injury. It is therefore the responsibility of the employer, as a principle, to pay any compensation to the employee in the event of such an accident.

  • If such an accident has arisen out of and in the course of employment:

The most essential requirement to be fulfilled for claiming compensation from the employer is to prove the fact that the accident was caused out of and in the course of employment. The employer is not entitled to compensate the employee on the basis of an accident on its own. It may be a circumstance where the injury has not been caused in the course of employment. The onus of proving is on the employee in this situation and not on the employer to prove that the damage is caused out of or during the course of employment. The employee must plead his case before a court of law. For instance in the case of the State of Rajasthan vs. Ram Prasad and ors. The bench held that –

“If the workman is injured because of natural force such as lightning though has no connection with employment, she can recover compensation by showing that such employment exposed her to such injury.” [5]

  • If such injury resulted in a permanent or partial disability of the employee

Section 2(g) of the act defines both partial and permanent disablement.[6]. If the injury caused to the employee in the event of an accident results in the employee being permanently or partially disabled for a period of more than three days, the employer shall be liable to compensate the employee. When a disability is of a permanent or temporary nature, such a disability reduces the employee’s earning capacity in any employment in which he or she was employed at the time of the accident

  • If the accident resulted in the death of the employee:

The last requirement that enables employees’ heirs to receive compensation is to prove that such an accident resulted in the death of the employee. If it is established before the court that the death was caused by an accident that occurred out of or in the course of employment, the heirs of the employee shall have the right to receive compensation.

Conclusion

In order for the company to operate, the employer needs the capital, business expertise, and labor of employees who are paid for their labor. When the machines are broken down, management will commit its finances to fix them. If this attention and care can be extended to machines, it must also be extended to the Human beings working in the same field that do need to be taken care of and consideration to the threats they face while employed in that industry. Social policies ensure that money is paid to the disabled or injured worker only if the person sustained injuries as a result of incidents arising from and in the course of their employment. Social policies such as these ensure that the rights and values of the workers are maintained. Henceforth,  Compensation paid to a worker by an employer in the event of an accident is a measure of relief and social security.

Frequently Asked Questions (FAQs)

  1. Which are the important employer’s liability enactments?
  2. What was the situation regarding employer liability before the enactment of the Employers’ Liability Act, 1938?
  3. What is the definition of  “workman” and “employer” as per the Employers’ Liability Act, 1938?
  4. Which are the defenses excluded under the Employers’ Liability Act, 1938
  5. What are the essentials to be fulfilled to claim compensation under the Employee’s Compensation Act, 1923?

References

[1] Pandey, K. (1969). Compensable Harm Under Workmen’s Compensation Act, 1923—a Comparative Study Of The Indian And English Decisions. Journal Of The Indian Law Institute, 11(4), 430-479.

[2]The Employers’ Liability Act, 1938. 

[3] Kulkanri, C. (2013). Employee Benefits In Industries. International Journal Of Research In Business Management

[4] Jain, P. (n.d.). Employer’s liability to render compensation to an employee. Legalserviceindia.com.

[5]  State of Rajasthan vs. Ram Prasad and ors, (2001) 9 SCC 395.

[6] THE EMPLOYEE’S COMPENSATION ACT,1923

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