Compensation by the Employer

Go back to Tutorial

Compensation by the Employer

The meaning of “Compensation” has been defined under Section 2 of the Act. To mean compensation by the Employer as provided for by this Act. The meaning of the term will be clearer in the following points:

Amount of compensation:

The amount of compensation is payable in the event of an employee meeting with an accident resulting in temporary or permanent disability or disease. As stated in Schedule II and III in terms of Section 4 of the Act, read with Schedule IV.

Also, the schedule II contains a list of persons engaged in different employments/ operations specified therein. Who is covering under the definition of employee and entitlement to compensation? While the schedule III contains a list of occupational diseases. Which if contracted while in employment entitles an employee to compensation such as disease caused by lead, mercury, etc. Schedule IV lays down the relevant factor (a certain figure) relating to the age of the employee at the time of death, injury or accident by which wages multiply to arrive at compensation.

Compensation payable when due and the penalty for default

Time of payment of compensation: Section 4A of the Act provides that compensation under Section 4 is payable as soon as it falls due. Compensation becomes due on the date of death of an employee and not when Commissioner decides it.

Review of half-monthly payment

Section 6 of the Act provides that any half-monthly payment payable under this Act. Either under an agreement between the parties or under the order of a Commissioner under review by the Commissioner on the application.

Distribution of compensation

No compensation has to be paid in respect of an employee whose injury has resulted in death and no payment of lump sum compensation to a woman or a person under a legal disability except by deposit with the Commissioner. The employer cannot make payment of compensation directly to the deceased legal heirs. It is the Commissioner who decides on the distribution of compensation to the legal heirs of the deceased employee.

For certification in Labour Law Analyst visit –

Government certification

Go back to Tutorial