The Employee Compensation policy is a legal liability policy with unlimited liability, whereas Group Mediclaim (GMC) is an indemnity policy & Group Personal Accident Policy (GPA) is a defined benefit policy i.e. the quantum as well as triggers that lead to a claim are defined at the inception in both the GMC as well as the GPA policies.

While having a GMC & GPA policy for your employees is indeed a good practice, there are some claims that would fall outside the purview of both your GMC as well as GPA. Here’s why you need to insure yourself under the WC policy

• Claims under the WC act are awarded by a Commissioner, and could vary for every single employee. Quantum of claim settlement under Group Personal Accident policy is predefined. If you have insured your employee for 2 Lakh under the GPA but the award comes out to 3 Lakh, that is additional money you will have to shell out of pocket.
• Occupational diseases are outside the purview of a GPA and therefore any liability that may arise out of such a claim would have to be paid out of pocket.
• The WC policy covers loss of wages which is not covered under GPA.

Employee compensation in Europe is largely classified into compensation paid via an insurance program or compensation financed through taxes. Liabilities and coverages are mostly similar to the ones offered in India. Most policies however cover commute related accidents by default. Rates of compensation vary from country to country.

Workmen Compensation policy is mandatory in the US as well. Since the US is a federation of states, the rate of payment made to the workman in case of death or disability, could vary from State to State. Something unique practiced in Canada is the concept of Workers’ Compensation Boards. Risks are spread among Employers of the same class. Employers liability is limited to their premium contribution. Something like what is practiced in administration of Motor Third Party claims in our country.

No, the act does not cover Employees when not on duty.
The scope of the act is to provide for adequate protection to Employees when they suffer any injury or losses caused by an accident during the course of employment. The Employer is therefore not liable when the Employee is not on duty.

The courts in India and abroad have at various times passed judgements that cases like these need to be considered on a case to case basis.
While a routine to and from work need not fall under the Employers liability, occasions where an Employee is commuting primarily for work, like traveling between two offices, would fall under the Employers liability.

A woman employee of a software company uses the voluntary pick and drop benefits that the company provides. On one of her rides back home, she is verbally harassed by the cab driver.

While she does sue the company under “common law” on the grounds that the company failed under its obligation of “duty of care”, can she also file a claim under the WC policy?

No, as far as the Employer is concerned, the service is being offered as a voluntary paid benefit and therefore not enforced by virtue of employment. Since the injury did not arise during the workplace or during the course of employment, it would not be covered under the Workmen’s compensation policy.

There are certain other injuries which lead to death or disability that can be covered under the Workmen’s compensation policy such as Overexertion, Slip & fall, Struck by an object, machinery accident injuries etc. For instance overexertion occurs when an employee working in a factory strains one or more muscles in the body or slips a disk from pushing the body to the extreme limits which would eventually lead to death or disability. The other example is when the employee slips and falls in the workplace resulting in death or disability. These cases can be claimed under the common law as the management is responsible for the well being of its employees and should provide a secure workplace failing which could lead to suing the employer under the common law. These accidents or injuries could be claimed under the common law as well as the Workmen’s compensation law.

Yes Employers can be held liable under fatal law when the family of a workman files a suit for compensation, for loss occasioned to it by the workman's death due to an actionable wrong by the Employer.

Employers also become liable whenever the death of a person shall be caused by a misdoing, neglect or default, and the misdoing, neglect or default is such as would (if death had not ensued) have entitled the party injured (the workman or his family) to maintain an action and recover damages in respect thereof; the party (the Employer) who would have been liable if death had not ensued shall be liable to an action or suit for damages, notwithstanding the death of the person injured, and although the death shall have been caused under such circumstances as amount in law to felony or other crime.

Every such action or suit shall be for the benefit of the wife, husband, parent and child.

Difference between WC and GPA Policy

An occupational disease is a health disorder that is caused by the work environment, normally because of working there for an elongated period of time. For instance employees working in lead related factories may inhale minimal amounts of lead over a period of time which would develop into a disease commonly known as occupational disease.
While not exhaustive, the Workmen Compensation Act does specify a list of diseases that would generally classify as occupational diseases.

Statutory liability is a legal term that refers to holding a person, company or other entity accountable for their actions or omissions thereof on account of a related law.
Companies can be held statutorily liable for violations of a variety of laws surrounding common business activities; examples include laws regarding the environment, workplace safety, consumer privacy, licensing, and permits.
Different types of statutory liability include professional liability, employee benefits liability, and medical malpractice liability etc. Employee Compensation policy is extended to cover Statutory Liability and the extent of this liability can be unlimited.

The following qualify as dependents

1. A widow, a minor legitimate son, an unmarried legitimate daughter, or a widowed mother; and
2. If wholly dependent on the earnings of the workman at the time of his death, a son or a daughter who has attained the age of 18 years and who is infirm;
3. If wholly or in part dependent on the earnings of the workman at the time of his death,
   • A widower
   • A parent other than widowed mother
   • A minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or illegitimate if married and a minor or if widowed and a minor,
   • A minor brother or a unmarried sister or a widowed sister if a minor,
   • A widowed daughter-in-law
   • A minor child of a predeceased son
   • A minor child of predeceased daughter where no parent of the child is alive
   • A paternal grandparent if no parent of the workman is alive

1. Permanent partial disability
2. Permanent total disability
3. Temporary partial disability
4. Temporary total disability

1. When an injury sustained by an employee does not result in the total or partial disablement of the workmen for a period exceeding 3 days
2. In respect of any injury (not resulting to death) which is directly attributable to the workmen been at the time thereof under the influence of drink or drugs or the wilful disobedience, the wilful removal or disregard by the workman of any safety guard or other device
3. If the workman institutes the case in a civil court for damages

The compensation to be paid in lieu of a workman's death or disability is decided by the Labor Commissioner in the Labor Court. The compensation amount is decided on a case to case basis after analyzing factors like the nature of injury, average monthly wages, workers age, the extent of service remaining and so on. While there is no upper limit to the liability, the Labor Commissioner relies on similar past judgements to decide on the compensation.