WORKMEN COMPENSATION INSURANCE
For calculation of Settlement for a Workmen Compensation Injury, the following guidelines should be noted:
The maximum Monthly Wage Allowed for the calculation of compensation under the Act is Rs. 8000
Workers from the age of 16 years and above are eligible for the compensation
A relevant Factor is an age-based multiplier defined in Schedule IV of the Act
- Compensation in Case of Death:
50% of the Monthly Wage x Relevant factor as per the age of the worker
Funeral expenses of Rs. 5000 are also payable
The minimum amount payable is Rs. 120,000
- Compensation in case of Permanent Total Disability (PTD)
60% of the Monthly Wage x Relevant factor as per the age of the worker
The minimum amount payable in this case is Rs. 140,000
- Compensation in case of Permanent Partial Disability (PPD)
A percentage of the compensation payable under PTD. But this percentage needs to be estimated based on the “extent of the reduction in earning capacity” of the worker.
- Compensation in case of Temporary Disability (Total or Partial)
25% of the Monthly Wage of the Worker payable every half month
The compensation is payable only if the worker is disabled for more than three consecutive days
The maximum tenure for the compensation is five years
Relevant Factor Schedule IV of Workmen (now Employee) Compensation Act
Age is the completed years of age, of the workman or employee on the last birthday. The last birthday is the latest birthday of the workman which immediately preceding the due date of compensation liability.
Case on Settlement in Workmen Compensation
Ramashankar Prasad was a part-time dump truck driver at R.J Construction Co. Last week, a lot of large water pipes that he was delivering fell on his vehicle, and he died on the spot.
Another worker was uploading the pipes from the truck, and Prasad was sitting beside him. However, during the unloading, the pipes became unsettled, and they fell over the truck and on Prasad who died due to internal head injuries. Being the breadwinner of the family, the death of Ramashankar puts a question mark on the future of his family of four people, including his senior-citizen mother. For relatives, also, the death of a 28-year-old Ramashankar came as a blow. Fondly called Rama by his friends, everyone worried about his family’s future.
Luckily, R.J Construction Co. had a workman compensation policy that paid compensation to Ramashankar’s family, in line with the provisions of the law. The worker courts decided the amount to be paid in line with their previous judgements. At the time of the accident, Ramashankar was earning only Rs 8,000. So as per the act, he was liable to get 50% of the Monthly Wage x Relevant factor as per the age. It means, his family got Rs 8,47,160 (4,000×211.79). This entire amount was immediately paid by the insurer and there was no burden on the company.