Amendments in the Workmen’s Compensation Act

Labour Law India : Amendments in the Workmen's Compensation Act in India

Workmen's compensation Act has been amended on 9th January 2010.

Given below are the synopsis of the changes.

(1) THE WORKMEN'S COMPENSATION (AMENDMENT) ACT, 2009 is now renamed as THE EMPLOYEE'S COMPENSATION (AMENDMENT) ACT, 2009 and wherever "workman" or "workmen" is mentioned in the entire Act the same needs to be read as "Employee"


(2) The compensation payable on death from the injury, is (i) minimum of Rs.80000 is increased to Rs.120000 or (ii) 50% of the monthly wages of deceased multiplied by the relevant factor.


(3) The compensation payable on Permanent Total Disablement from the injury, is (i) minimum of Rs.90000 is increased to Rs.140000 or (ii) 60% of the monthly wages of deceased multiplied by the relevant factor.


 (4) Definition of wages remains unaltered.


(5) For the purpose of claims settlement actual monthly wages have to be calculated without ceiling of Rs.4000/- which will lead to multifold increase in claim outgo. The maximum amount of claim compensation payable was Rs. 4.56 lakh in the case of death and Rs. 5.48 lakh in the case of permanent total disablement. *(Refer to table and calculation below).

With the ceiling of Rs.4000/- being removed, the claims outgo will increase.


(6) Definition of workmen replaced by "Definition of Employee"- also now includes CLERICAL employees.


* Maximum claim outgo in case of death when ceiling of Rs.4000 was there is calculated as below:

50% of 4000* 228.54 (if age of employee was 16 years from table below) =  Rs.4.56 lakhs        


Revised monthly wage ceiling limit of 50% of Rs.4000 increased to Rs.8000-Employees Compensation Act for maximum compensation calculation.


Now, a new monthly wage-ceiling limit of Rs. 8000 is introduced for the purpose of calculation of 50% of it during computation of Maximum compensation under the Act. Hence, the maximum compensation can go UPTO 50% of 8000 which comes to Rs. 4000/- that shall be multiplied by Age factor. Thus, effectively it was erstwhile 50% of Rs.4000 and now it is 50% of Rs.8000/-. This amendment is notified vide Central Government Notification No. S.O. 1258(E) vide Ministry of Labour & Employment dated 31st May 2010.


Source: Labour Law Reporter, January, 2009. “Workmen’s Compensation Act to be Employees’ Compensation Act.” Page No. 17