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Chapter 01: Introduction

1.1-Background

The Workmen’s Compensation Act is the first piece of legislation towards social security. It deals with compensation for workers who are injured in the course of duty. The scheme of the Workmen’s Compensation Act is not to compensate the worker in lieu of wages.

The general principle is that a worker who suffers an injury in the course of his employment, which results in a disablement, should be entitled to compensation and in the case of a fatal injury his dependants should be compensated. Under the Workmen’s Compensation Act it is the employer who is responsible to pay compensation.

The meaning of compensation in this Act is limited to compensation granted under the Act for employment injuries sustained during the course of work. It is also limited to specifically monetary compensation other than a salary, travel allowance, and any other form of remuneration that could be paid under normal circumstances of employment.To get an overall understanding of the Act it is useful to look at the “Statement of Objects and Reasons’ published with the Act when it was first passed in 1923.

An additional advantage of a legislation of this type is that by increasing the importance for employers of adequate safety devises, it reduces the number of accidents to workmen in a manner that cannot be achieved by official inspection. Further, the encouragement given to employers to provide adequate medical treatment for their workmen should mitigate the effects of such accidents as does occur. The benefits so conferred added to the increased

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sense of security, which he will enjoy, should render industrial life more attractive and thus increase the available supply of labour. At the same time a corresponding increase in the efficiency of the average workmen may be expected.”

Nowadays the government (State of Central) may extend the application of this Act to other establishments of an industry that may not be organised.

The whole area of compensation of a worker for injury by accident was dealt with by the Workmen’s Compensation Act, 1923 which is now repealed by the provisions of the Bangladesh labor code 2006. This provisions have their roots in the theory that a State can’t be muted spectator to the sufferings of the working class engaged in factories of establishments who are exposed to the varies risk to their limbs and lives. Due to technological innovations and automation introduced in industries the working class operating these sophisticated mechanical devices are invariably exposed to the risk of being involved in accidents for no fault of theirs.

The Workmen’s Compensation Act, 1923 provides for payment of compensation to workmen and their dependants in case of injury and accident (including certain occupational disease) arising out of and in the course of employment and resulting in disablement or death. The Act applies to railway servants and persons employed in any such capacity as is specified in Schedule II of the Act. The schedule II includes persons employed in factories, mines, plantations, mechanically propelled vehicles, construction works and certain other hazardous occupations.

The amount of compensation to be paid depends on the nature of the injury and the average monthly wages and age of workmen. The minimum and maximum rates of compensation payable for death (in such cases it is paid to the dependents of workmen) and for disability have been fixed and is subject to revision from time to time.

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1.2-Obejective of study:

Broad objectives:

To determine the Workmen's Compensation Act, 1923 which aims at

providing financial protection to workmen and their dependants in

case of accidental injury by means of payment of compensation by the

employers.

Specific objectives:

To identify in case of death compensation.

To find out in case of permanent total disablement compensation.

To identify in case of permanent partial disablement compensation.

To identify in case of permanent temporary disablement

compensation.

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1.3-Methodology:

Primary Data:

Information of factory.

Secondary Data:

Web information.

Relevant Books & magazine.

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1.4-Limitation of Study:

Some limitations of the present study were as follows:

1. Inability of the respondents to provide information.

2. Time constraints.

3. Limitation regarding resources of information.

4. Restraint to enter some factories.

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1.5-Scope of Study:

The Act extends to the whole of Bangladesh.

The Workmen's Compensation (Amendment) Act, 2000 has brought all the workers within its sphere irrespective of their nature of employment i.e. whether employed on casual basis or otherwise than for the purposes of the employer's trade or business.

Establishments which are covered by the Employees State Insurance Act, are outside the preview of this Act. The coverage of this act is also to cooks employed in hotels and restaurants.

Every employee including those employed through a contractor and also casual employees, who suffers an injury in any accident arising out of and in the course of his employment, shall be entitled for compensation under the Act.

A person employed in a factory which is yet to commence production would not be deprived of the benefit of the provisions of the Act.

The workman employed in a premise where manufacturing process is intended to be carried on is not necessarily required to be actually connected with manufacturing process.

Any person engaged in such premises who is contributing for the intended manufacturing process would be deemed to be workman for the purpose of the Act.

Government makes rules for ensuring that the provisions of the Act are complied with.

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Chapter 02: Body of the Report

2.1-Reason for doing the Study:

Section 3 (1) of the Workmen Compensation Act, 1923 says that-

“If personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be to pay compensation in accordance with the provision of Chapter (II).”

There are three components in the definition which are – (1) personal injury (2) accident (3) arising out of and in the course of the employment. This last point is the key of this section. More over these two phrases has been subjected to different kind of judicial interpretation and in varieties of cases the court has given their opinion about the meaning of these two phrases. The originality of these two phrases is an English Act of 1897 which was followed in different countries legislation including India. The term “scope of employment” was replaced by “in the course of employment” in nineteenth century. With advancement in the field of industry workmen have become more insecure with regard to their employment and as a result of that many social security legislation has come up. This Act is also among them. The judiciary has also realized this purpose of the act and interpreted the terms widely and gave birth to doctrine of notional extension.

To determine the scope of this term and lay down the test to determine what is “arising out of employment”. There were many attempts to construct a meaning of this term. It has been tried to explain by nature, condition, objects and incidents of employment.

“The words "in the course of the employment" mean "in the course of the work which the workman is employed to do and which is incidental to it." The words "arising out of employment" are understood to mean that during the course of the employment, injury has resulted from some risk incidental to the

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duties of the service, when, unless engaged in the duty owing to the master, it is reasonable to believe the workman would not otherwise have suffered.

To identify in case of death compensation, if the worker dies from a compensable injury, the surviving spouse and/or minor children, and lacking such, other dependents as defined by law, are entitled to weekly cash benefits. The amount is equal to two-thirds of the deceased worker's average weekly wage for the year before the accident. The weekly compensation may not exceed the weekly maximum, despite the number of dependents.

To find out in case of permanent total disablement compensation, the employee's wage-earning capacity is permanently and totally lost. There is no limit on the number of weeks payable. In certain instances, an employee may continue to engage in business or employment, if his/her wages, combined with the weekly benefit, do not exceed the maximums set by law.

To identify in case of permanent temporary disablement compensation, which are in delay status do not qualify for Workers' Compensation temporary disability until the claim is accepted. If there is a delay in acceptance of the claim, affected employees are encouraged to review and apply for short term disability benefits through Staff Human Resources.

The most important feature of the chapter is that it places the entire responsibilities for compensation on employers alone. The liability of the employer arises only when a personal injury is caused to the worker in the course of employment and the injury caused in the result of an accident. The liability for payment of compensation is not dependent upon the neglect or a wrongful act of the employer but a statutory compulsory obligation to compensate the workman for the loss of wage earning capacity before and after the injury is suffered by him. Therefore the act creates a new type of liability quite distinct from the liability of the employer under the law of tort but a liability flowing out of the relationship of master and servant. It is also different from the concept of vicarious liability based on the general principles of law of tort or doctrine of added peril based on the principles of tortious liability under the law of tort. The principle of added peril means that if a workman while engaged in employer’s work, track or business engages

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himself in some other work which is ordinarily he is not required to do and such work involves extra danger, he cannot hold the master liable for the risk arising therefrom. This is also not a contractual liability, even if there is contract to that effect not to claim compensation from the employer for an injury caused to workmen. An employer under the provisions of the act is liable to compensation at the rates fixed in the chapter itself to any workman incapacitated by an accident arising out of and in the course of his employment.

The act provides for compulsory payment by the employer of some compensation, calculated by reference to the wages, for death or disablement of a worker by accident while at work independently of any negligence or breech of duty on the part of the employer.

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2.2-Discussion:

Here, we discuss main 5 factors of compensation act, that provides for payment of compensation to workmen and their dependants in case of injury and accident (including certain occupational disease) arising out of and in the course of employment and resulting in disablement or death. Discuss it below:

Medical Benefits: Necessary and reasonable medical treatment, prescriptions, and hospital services related to the work injury are paid by the employer’s insurance carrier or directly by the employer if self-insured. The employer and/or its insurance carrier have the right to designate medical providers for all work-related injuries.

Temporary Total Benefits: If an injured worker is disabled for a period of more than seven days, he or she will be eligible to receive temporary total benefit, retroactive to the first day of lost time. The benefit will be paid at a rate of 70% of the worker’s average weekly wage, not to exceed the statutory maximum rate or fall below the statutory minimum rate established annually by the Commissioner of Labor and Workforce Development. These benefits are provided until the worker has returned to work, has reached maximum medical improvement, or has reached the statutory 400-week maximum.

Permanent Partial Benefits: When a job-related injury or illness results in a permanent bodily impairment, benefits are based on the individual’s functional loss. These benefits are paid weekly and are due after the date temporary disability ends.

Permanent Total Benefits: When a work injury or illness prevents a worker from returning to any type of gainful employment, he or she may be entitled to receive permanent total disability benefits. These weekly benefits are provided initially for a period of 450 weeks. Benefits continue beyond the initial 450 weeks provided that the injured worker is able to show that he or

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she remains totally disabled. The benefits are paid weekly and are based upon 70% of the average weekly wage, not to exceed the statutory maximum or fall below the statutory minimum.

Death Benefits: Dependents of a worker who dies as a result of a work-related injury or illness may be eligible to receive death benefits. The weekly benefits are 70% of the wage of the deceased worker, not to exceed the statutory maximum.

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2.3-Scenario of the chosen company:

Sinha Fabrics Limited and Sinha Wool Wears Limited started business as a Private Limited company in Bangladesh back in 1997, with a view to serve the world market as 100% export oriented readymade garments factory, that will produce all type of garments for gents, ladies, and children of all kinds, sizes designs made of cotton, rayon silk, jute polyester, and other fibrous products. Since then the company has gradually developed its knowledge, skills and abilities to perform efficient and effective production runs. The company is being managed by the well known SINHA family members mostly, who have well versed business knowledge from established businesses. The technical talents and skilled labor forcehas always been the core competence of the company. Technological advances are yet another to mention, that facilitate error free long productions runs. So far the company has always been successful to satisfy their commitment of Quality, Convenience and assurance. Quality aspects are assured through specified quality control measures at the end of each phases of production.

In this company, payment system is available for short-term disability, sickness and accident and also payment system is available for long-term, total permanent disability. There payment system are provided based on the government rules under the act of workmen’s compensation. They offer provident funds who involves more than 10 years with the company and also offer pension plan. Company has better sick level management system and also has proper health and safety arrangement. The wage board has followed 5% yearly increment on the basic and the workers get promotion opportunity for their work performance.

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Chapter 03: Conclusion & Recommendation

3.1 Conclusion:

There must be a causal connection between the injury and the accident and the work done in the course of employment;

The onus is upon the applicant to show that it was the work and the resulting strain which contributed to or aggravated the injury; It is not necessary that the workman must be actually working at the time of his death or that death must occur while he was working or had just ceased to work; and Where the evidence is balanced, if the evidence shows a greater probability which satisfies a reasonable man that the work contributed to the causing of the personal injury it would be enough for the workman to be entitled. But where the accident involved a risk common to all humanity and did not involve any peculiar or exceptional danger resulting from the nature of the employment or where the accident was the result of an added peril to which the workman by his own conduct exposed himself, which peril was not involved in the normal performance of the duties of his employment, then the employer will not be liable.

The expression in the course of his employment', connotes not only actual work but also any other engagement natural and necessary thereto, reasonably extended both as regards work-hours and work-place. It refers to the time during which the employment continues. . However, this is subject to the theory of notional extension of the employer's premises so as to include an area which the workman passes and re-passes in going to and in leaving the actual place of work. There may be some reasonable extension in both time and place and a workman may be regarded as in the course of his employment even though he had not reached or had left his employer's premises. This is also called as the Doctrine of Notional Extension. The doctrine of notional extension could not be placed in a strait jacket; it is merely a matter of sound

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common sense as to when and where and to what extent this doctrine could be applied.

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3.2 Recommendation:

Government also have some responsibility to improve the situation by implementing - proper policy to protect the labor. Must look for ways to improve the productivity of its labor force if it wants to compete regionally if not globally. Because of cheap labor if our country makes the labor productivity in the apex position, then we think the future of this sector is highly optimistic.

Government body must ensure that the factory fully comply with the factory act 1965 in order to construct a factory. The workers right and privileges must also be ensured.

Company must -

following the direct payment statutes, folling the english act, provide for the payment of the compensation by the employer to the employee.

following the actual medical expenditure incurred by him for treatment of injuries caused during the course of employment.

enforcing the law that requires employers to secure workers’ compensation insurance coverage from commercial insurance carriers or self-insurance programs.

providing certain benefit payments to injured workers who are totally and permanently disabled as a result of their last work-related injury combined with the worker’s pre-existing disabilities.

ensuring that workers receive fair and timely workers’ compensation benefits for work-related injuries from their employers and/or insurance carriers.

Governmental agencies are required to provide workers’ compensation benefits to their employees but are not required to purchase insurance or receive approval as a self-insurer. They generally either 1) obtain an insurance policy, 2) participate in an insurance pool, or 3) maintain a separate appropriation for workers’ compensation.

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3.3 References:

Bangladesh Labour Code 2006 (An Interpretative & Critical Study of the Lobour And Industrial Laws of Bangladesh) by MD. Abdul Halim.

The Bangladesh Labour Code, 2006 (With section-wise English Translation) by MD. Abdul Halim & Masum Saifur Rahman.

http://www.lawteacher.net/free-law-essays/contract-law/legal-obligation-on-employer-to-pay-compensation-contract-law-essay.php#ftn16#ixzz3XflSzrPy

http://lawcommissionofindia.nic.in/51-100/report62.pdf

http://labour.gov.in/upload/uploadfiles/files/Divisions/social_security/TheWorkmenAct1923.pdf

http://pblabour.gov.in/pdf/forms_procedures/procedure07_workmens_compensation_act_1923.pdf

http://www.prsindia.org/uploads/media/workmen/The%20Workmens%20Compensation%20Amendment%20Bill%202009.pdf

http://www.ngosindia.com/resources/wcact.pdf

http://www.theigc.org/wp-content/uploads/2015/01/Altaf-2014-Working-Paper1.pdf

http://www.labour.gov.hk/eng/public/ecd/HowToApplyECforDeath_Eng.pdf

http://laborcommission.utah.gov/media/pdfs/industrialaccidents/pubs/EEGuide.pdf

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http://lwd.dol.state.nj.us/labor/forms_pdfs/wc/pdf/WC-373.pdf

http://governor.nh.gov/media/news/2014/documents/2014-12-19-workers-compensation-report.pdf

http://www.tdi.texas.gov/reports/wcreg/documents/safetyrtw.pdf

http://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=47329