Amendments to the Employee’s Compensation Act, 1923

July 17, 2017


It is a praiseworthy legislative trend, that whenever the central legislature enacts beneficial legislations for the relatively weaker sections of the society or economy, it constantly keeps on taking measures to provide more and more benefit to the beneficiaries under the Act by amending it.

One such instance is the amendment to the Employee’s Compensation Act, 1923 (hereinafter referred to as “the Act”). It is common knowledge that many of the tasks for which labourers or workmen are employed involve great physical hardships, risks of loss or injury to the employees which may even result in death. This Act assures that the employee or his dependents are to be compensated for injury or death caused to him during his employment. The Employee’s Compensation (Amendment) Act, 2017 (hereinafter referred to as “the amendment”) received the President’s assent in April 2017. Its salient features are enumerated below:

  1. Informing employees of their rights to Compensation:

    The amendment inserted a new section, Section 17 A whereby the employers are now under an obligation to inform the employee, at the time of employment, of his/ her rights to compensation under this Act, in writing as well as through electronic means. The employer should inform the same either in English or Hindi or in the official language of the area of employment, as may be understood by the employee.

    According to the amended Section 18 A, penalties have been prescribed even for failure to inform the employee of his rights to compensation as required under section 17A.

    1. Also, according to Section 18 A the amount of maximum fine which can be imposed has been increased from INR 5,000 to INR 50,000.
    2. Threshold limits for appeals against order of the Commissioner:

      According to Section 30 of the Act, an appeal can be preferred to the High Court from the orders of the Commissioner related to:

      • an order awarding as compensation a lump sum whether by way of redemption of a half-monthly payment or otherwise or disallowing a claim in full or in part for a lump sum; or
      • an order awarding interest or penalty, an order refusing to allow redemption of a half-monthly payment; or
      • an order providing for the distribution of compensation among the dependants of a deceased 153 [employee], or
      • disallowing any claim of a person alleging himself to be such dependant; or
      • an order allowing or disallowing any claim for the amount of an indemnity; or
      • an order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions.

      However, the threshold limit for appeals against an order refusing to allow redemption of a half-monthly payment was INR 300 and has now been increased to INR 10,000 or such higher amount as the Central Government may specify.

    3. Commissioner not to withhold payment during the pendency of an appeal by employer:

      Further, according to Section 30 A of the Act, during the pendency of an appeal made by the employer under Section 30, the Commissioner may upon his own discretion or if directed by the High Court, withhold payment of any sum in deposit with him. However, this power is no more available to the Commissioner as the Section has been omitted from the amendment of 2017.

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