Employer’s liability for compensation

Author – By Ankita Gaba and Ankit Gupta (Intern)



Every employee wants to be paid for the costs he has incurred and requires a stable work. Regardless of how big or small the organisation is, this is a need that must be met. After all, employees are what make a firm successful. Therefore, a company’s main goal is to defend its employees’ rights and ensure their safety. This page covers a wide range of topics, including who is eligible to file a claim for compensation, how much compensation is provided, and more. The “Employees Compensation Act, 1923” is a law that allows businesses to compensate employees for whatever injuries they may have sustained in an accident.[1]

The Workmen Compensation Act, 1923, was the previous name for this legislation. Imagine what would happen if an employee who is putting in great effort learned that they would not be receiving any benefits. After all, people frequently take actions in hopes of receiving a reward. When the vicarious liability rule is in effect, the employer is responsible for paying damages regardless of culpability. Although the employer expects it to be compensation for damages, the employees really feel relieved. When an employee is hurt while doing their job duties due to an accident or other unforeseen circumstances, the employer is held accountable. One could wonder if a part-time employee would still be eligible for Act benefits. The answer is -Yes, the Act’s benefits will continue to apply to the employer.

There are various prerequisites that must be met in order to qualify for Employees’ Compensation Act benefits:

  • You must work for the company or organization.
  • You must have been injured at the workplace or the job was as such that you have been injured.[2]


Doctrine of added peril

The employer is not responsible for covering the costs of injuries when an employee performs a task that is outside the scope of his or her job and poses additional risks. Devidayal Ralyaram v. Secretary of State is the matter at hand. The notion of additional risk was found to have been employed as a defence, and the employer was not held responsible for the compensation.

The adjudication is done by the commissioner in calculation of the amount of compensation.The quantum of compensation is calculated from the date of the accident.


Self-inflicted Injury

A self-inflicted injury is one that a worker inflicts on themselves. Whether the injury was caused on purpose or by accident, the employer is not held responsible. There are certain professions that carry a higher risk of self-inflicted injury, including:


  • Law enforcement
  • Medical employees
  • Farmers
  • Teachers
  • Salespeople


Contributory negligence

Employees have an obligation to exercise reasonable care while doing their duties in order to prevent mishaps and injuries. Employers are vicariously accountable for the negligence of their workers, but in some situations, they are also entitled to request a payment or compensation from the offending employee. Therefore, if both the employee and the employer were negligent, the employer would be responsible for paying damages to the amount of his own fault rather than that of the employee. As a result, since the employer won’t be held accountable for the employee’s negligence, the amount of compensation may decrease.


According to the Act, benefits are only given to employees and their dependents if the accident-related injuries include occupational disorders. The incident must have happened while performing work-related duties. The Employees Compensation Act also applies to those working as railway servants and in other positions as listed in Schedule 2. Schedule 2 covers those who work in industries, mines, plantations, cars, construction, and several other hazardous occupations. An employee’s life is lost or is in grave danger of being lost in a terrible accident. In the event of a deadly accident, the employee may pass away or sustain serious injuries and disabilities. Non-fatal accidents, on the other hand, are ones in which there is a low likelihood of fatality. Non-fatal accidents could result in permanent disability or other types of personal injuries for the worker or employee.

Accidents that result in the aforementioned contingencies in the act are covered by the Employees Compensation Policy, whether they are deadly or not. Accidents that cause death, permanent entire or partial disability, or fatal injuries are considered fatal accidents. If any of these scenarios materialises, the company’s claim would be covered by the employees’ compensation policy. However, the covered eventualities might not materialise in the case of non-fatal incidents.


Wilful disobedience of orders or safety devices, etc.

If the employee disobeys the order expressly given or denies to obey any rules. The rules are made for the safety of the workmen but if they disobey the accident might happen. The accident can take place if the employee wilfully disregards the safety guards or any other device. If the employee knew that he has been provided safety for the purpose of securing employees and still disregards it is said to be done wilfully.[3]


Notional extension of Employer’s Premises

According to the Employees Compensation Act, benefits are due for a person’s disability or death when there is a causal link between the accident and the workplace where the employee is employed. This is the workplace’s Doctrine of Notional Extension.

Compensation under Agreement

An employee’s payment for services rendered to a corporation as an employee is guaranteed by a compensation agreement. A compensation agreement guarantees that a person will be paid for the services they render to a company while working as an employee.


If an employee has filed a lawsuit for damages in a civil court about any injury against any employer, the employee cannot grant any right to compensation in relation to the accident. An employee may not file a lawsuit in a court of law for damages. The Act was primarily created for the benefit of the workers so that they might receive reimbursement from the employers for any costs associated with an accident-related injury. The act is subject to the fundamental principle of vicarious liability. Employees are servants to their employers, who are their master. Only when an injury occurs during the course of employment and at work does the employee receive compensation.



[3] https://www.coursehero.com/file/p672s37/Wilful-disobedience-of-orders-or-safety-devices-etc-Chaitram-v-Steel-Authority/


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