Vaibhav Chadha
The Lok Sabha on August 9, 2016, unanimously passed the Employee’s Compensation (Amendment) Bill, 2016, to reduce litigation in cases of disputes arising over compensation to workers. The Bill was introduced in Lok Sabha by Bandaru Dattatreya, Minister for Labour and Employment, and around 26 Members of the House took part in discussion on the Bill. Before introducing the bill, the Minister said “Labour is a big component in the nation building activity as their role and participation is very high. India has got a huge human resource and that is why, the labourers or the workers play a significant role in building the nation.”
The Bill seeks to amend the Employee’s Compensation Act, 1923 to rationalise the penalties and strengthen the rights of the worker under the Act. It also provides compensation to be paid to employees and their dependents in the case of injury by industrial accidents, including occupational diseases.
A major impact of amendment of the Employees Compensation Act, 1923, is that it will act as deterrence against the Employers who take the rights of Employees for granted and thus, will now lead to better compliance of the provisions of the Act as the penalties have been enhanced. With the new act, much litigations are now likely to be closed at the level of Commissioner only as the amount of dispute for appeal to High Court has been raised from Rs 300 to Rs 10, 000.
The Bill makes mandatory for employers to inform the employee of his right to compensation under the Act. Information in this regard must be given by employer in writing in Hindi, English, or the relevant official language at the time of employing him. The Bill also states provisions for penalising the employer if he fails to inform his employee of his right to compensation, penalty for such contravention may be between Rs. 50, 000 to Rs. 1 lakh.
Any dispute related to an employee’s compensation will now be heard by a Commissioner (with powers of a civil court) if the amount in dispute is ten thousand rupees and amendment also allows the Union Government to further raise this amount. Appeals from the order of Commissioner, related to a substantial question of law, will now lie before the High Court. Earlier any payments towards the employee could be temporarily withheld if an employer had appealed against a Commissioner’s order in the High Court. This provision has now been removed.
The Labour Minister also reiterated in the House, “This Government is pro-worker and pro-labour. We are actively considering all labour issues.” The main focus area of Modi Government now is unorganised sector and high priority is given to this sector to better the conditions of the unorganised workforce. The Amendment of the Employees’ Compensation Act, 1923, is considered to be a great step taken by the present Government to improve the state of crores of workers in the country.
A major impact of amendment of the Employees Compensation Act, 1923, is that it will act as deterrence against the Employers who take the rights of Employees for granted and thus, will now lead to better compliance of the provisions of the Act as the penalties have been enhanced. With the new act, much litigations are now likely to be closed at the level of Commissioner only as the amount of dispute for appeal to High Court has been raised from Rs 300 to Rs 10, 000.
Under the new stringent law, the Employer will not be able to withhold compensation of Employees, unless there is a stay by the High Court. The Amendments in the Employees’ Compensation Act, 1923, is likely to benefit three crore workers in the country.
(The writer is Research Associate at Dr Syama Prasad Mookerjee Research Foundation, New Delhi)