Verdict for the worker

A Madras High Court judgment calls for an amendment of the Workmen’s Compensation Act, 1923, to benefit the worker.

A Judgment of the Madras High Court has raised the hopes of lakhs of workers, particularly those in the unorganised sector, of getting a fair deal in case of an accident at the workplace or a fair compensation to their dependants in case of death. The judgment calls for the amendment of the Workmen’s Compensation Act, 1923, which fixes a ceiling of Rs.4,000 a month as the maximum wage of a labourer while calculating the “employment injury compensation” to an injured workman or while arriving at the compensation to dependants in case of death.

Against the backdrop of criticism in trade union circles that the “judiciary has turned its back on the working people and the poor, particularly since the era of economic liberalisation”, Justice N. Kirubakaran, in his February 8 judgment, observes thus: “Minimum monthly wages can be fixed and there cannot be any ceiling on the monthly wages. Fixing maximum monthly wages is detrimental to the interests of the working class and would certainly affect the fundamental rights of the workers guaranteed under Articles 19 (1) (g) [Right to carry on occupation] and 21 [Right to life].” He said fixing Rs.4,000 as the maximum wage, under Section 4 (1) Explanation-II of the Act, went against the very object of the Act and it was high time the Act was amended.

The judgment comes in the wake of an appeal by the Oriental Insurance Company against the award of Rs.4,34,650 to a mason who suffered 80 per cent disability in an accident during the course of employment on August 20, 2003, and claimed Rs.3,00,000 as compensation. Going into two “substantial questions of law at the time of admission” of the appeal, the court upheld the decision of the Deputy Commissioner of Labour that the claimant was a “workman” who suffered injuries during the course of employment and confirmed his award fixing the compensation at Rs.4,34,650. The Centre of Indian Trade Unions (CITU) and the All India Trade Union Congress (AITUC) have welcomed the judgment.




Demanding better accident compensation, workers block the entrance to the Vedanta Aluminium factory at Lanjigarh in Orissa on February 22, a day after a colleague was killed in an accident in the factory.

Recalling that the Workmen’s Compensation Act, 1923, has its origins in the colonial period like many other primary and major Acts, the court pointed out that but for “cosmetic amendments”, the main statement of object and reasons for the enactment of the law remained the same. The object of the piece of legislation was to compensate for injuries arising out of accidents during the course of employment and resulting in disablement or death, the judge pointed out. He said that as the object was very laudable and the legislation had been enacted for the benefit of workmen, there should not have been a ceiling on the monthly wage of workers at Rs.4,000.

“Considering the rise in the earning capacity and spending power, inflation and cost of living, the monthly wage of workmen is bound to rise and change. Therefore, the maximum monthly wage of Rs.4,000 fixed in the Act is very meagre and requires reconsideration by way of enhancement or deletion of ceiling fixed under Section 4 (1) Explanation II of the Act,” the judge observed. He also wondered why labour forums and associations had missed the implications of the section and had not challenged the provision.

While passing the order, Justice Kirubakaran referred to the January 5 judgment of a two-judge Bench of the Supreme Court of India comprising Justice G.S. Singhvi and Justice Asok Kumar Ganguly in Harjinder Singh vs Punjab State Warehousing Corporation. The judges, in separate but concurring judgments, stressed the need to protect the rights of workers in the liberalised and globalised scenario (“Introspection time”, Frontline, February 26, 2010).

The Madras High Court judgment quotes Justice Singhvi’s observation as follows:

“Of late, there has been a visible shift in the courts’ approach in dealing with the cases involving the interpretation of social welfare legislation. The attractive mantras of globalisation and liberalisation are fast becoming the raison d’etre of the judicial process and an impression has been created that the constitutional courts are no longer sympathetic towards the plight of industrial and unorganised workers. In large number of cases like the present one, relief has been denied to the employees falling in the category of workmen, who are illegally retrenched from service by creating bylanes and sidelanes in the jurisprudence developed by this court in three decades.

“The stock plea raised by the public employer in such cases is that the initial employment/engagement of the workman-employee was contrary to some or the other statute or that reinstatement of the workman will put unbearable burden on the financial health of the establishment. The courts have readily accepted such plea unmindful of the accountability of the wrongdoer and indirectly punished the tiny beneficiary of the wrong, ignoring the fact that he may have continued in the employment for years together and that micro wages earned by him may be the only source of his livelihood. It needs no emphasis that if a man is deprived of his livelihood, he is deprived of all his fundamental and constitutional rights….

“Therefore, the approach of the courts must be compatible with the constitutional philosophy of which the Directive Principles of State Policy constitute an integral part, and justice due to the workman should not be denied by entertaining the specious and untenable grounds put forward by the employer – public or private.”

Justice Kirubakaran also referred to the observation of Justice Asok Kumar Ganguly, that the court “has a duty to interpret statutes with social welfare benefits in such a way as to further the statutory goal and not to frustrate it. In doing so, this court should make an effort to protect the rights of the weaker sections of society in view of the clear constitutional mandate discussed above.”

He further said that while awarding compensation under the Motor Vehicles Act, 1988, factors such as disability, loss of income, pain and suffering, loss of love and affection, loss of consortium, loss of damage to clothes and property and loss of estate are considered whereas under the Workmen’s Compensation Act, disability alone is considered for the purpose of calculating the loss of income.

Stressing the need to revamp the Workmen’s Compensation Act on a par with the Motor Vehicles Act, he said “… an ‘injury’ sustained is always an ‘injury’ and the ‘pain’ suffered is ‘pain’ with all elements and there cannot be any difference whether the victim gets relief under either of the Acts”.

Praising the judgment, A.K. Padmanabhan, president of the Tamil Nadu unit of the CITU, said very rarely had a judgment of this type been awarded by the Supreme Court or the High Courts. He described the High Court order and the judgment of the two-judge Bench of the Supreme Court as “exceptional” and said he hoped they would not continue to be exceptions for too long.

He said three years ago, in Chennai, the State unit of the CITU had submitted a memorandum to the Chief Justice of India expressing concern over the apex court’s decisions that had “consistently gone against the working class”. On the High Court order calling for the removal of the ceiling on wages for calculating compensation, he said: “This is one area where the government has been consistently taking a negative attitude towards the demands of workers and trade unions.” He alleged that the government had made changes in the various enactments on wages wherever it wanted to favour the employers, but nothing of much use to the workers had been done in this regard.

With regard to pieces of legislations such as the Workmen’s Compensation Act and the Bonus Act, the wage ceiling had not been amended for years, he said. Though it had been continuously pointed out by trade unions in various tripartite meetings including the Indian Labour Conference, the highest tripartite body in the country, that certain sections of the Bonus Act had become obsolete, the wage limits prescribed for the application of the bonus law remained, he added.

Pointing out that only recently the Union Cabinet decided to amend the Gratuity Act, which put a ceiling on the maximum amount payable to workers, he said, these were only a few examples to show how wage ceilings in the present inflationary situations took away the meagre amounts that workers were to get as a benefit or as compensation. At least in the wake of the High Court’s judgment, he said, the government should come forward to amend the Workmen’s Compensation Act on the lines of the Motor Vehicles Act.

Expressing similar sentiments, S.S. Thyagarajan, general secretary of the State unit of the AITUC, said trade unions had always demanded that the government lift the ceiling on the wages for all welfare schemes, including Provident Fund, Employees’ State Insurance, and bonus. According to him, the judgment of the High Court “has a tinge of humanitarian consideration”.

He pointed out that the governments had always been reluctant to effect an upward revision of wages that would benefit workers. Whenever amendments effected an enhancement of wages, the increases became virtually redundant owing to belated implementation, he said. “We hope the essence of the judgment will be taken into account and wages will be enhanced appropriately to benefit workers and their families,” he said.