Section 30: Amount and Calculation of Compensation

Overview

Section 30 of the Code on Social Security, 2020, deals with Employees’ Compensation, a crucial benefit under social security law. This section specifically outlines the formula and process for calculating the amount of compensation payable to employees (or their dependents) who suffer injury, disability, or death arising out of and during the course of employment. It aims to provide financial security to workers affected by workplace incidents.

Who is Covered?

• The Code generally covers all employees engaged in any kind of work for hire or reward, with some exceptions for certain categories like members of the armed forces, and employees covered under other specific laws (like the Merchant Shipping Act).
• The Code applies to all establishments – factories, mines, plantations, construction sites, and other establishments employing a specified number of workers (the threshold varies based on the type of establishment).
• Eligibility for compensation under Section 30 arises when an employee suffers an injury, disability, or death ‘out of and in the course of’ their employment. There is no specific length of service requirement to be eligible for compensation in case of an accident.

Benefits and Contributions

• Benefit to Employee: The primary benefit is financial compensation for loss of earning capacity due to injury, permanent disability, partial disability, or, in the case of death, support for dependents. The amount is calculated as per the formula detailed in Section 30.
• Contribution Responsibilities: Unlike schemes like Provident Fund or ESI, Employees’ Compensation is primarily funded by the employer. There are no direct contributions from the employee or the government. The employer is responsible for securing the compensation through insurance or self-insurance.

Procedure and Compliance

Here’s a simplified overview of the process:

1. Accident/Injury: An accident or injury occurs during the course of employment.
2. Reporting: The employee (or their representative) must report the injury to the employer.
3. Employer’s Responsibility: The employer is obligated to report the injury to the Employees’ Compensation Commissioner and initiate the compensation process.
4. Investigation & Determination: The Commissioner investigates the claim and determines the extent of the injury/disability and the applicable compensation amount based on Section 30’s formula.
5. Payment: The employer (or their insurer) pays the compensation to the employee or their dependents.
6. Delayed Payment: If payment is delayed, interest accrues on the compensation amount as prescribed by the Code.

Practical Examples

• Example 1: Employee Eligible for Benefit – A factory worker suffers a leg injury due to a machine malfunction. The injury results in a 30% permanent disability. Based on their monthly wages and the disability percentage, compensation is calculated as per Section 30, providing financial support for their reduced earning capacity.
• Example 2: Non-Compliance by Employer – An employee dies in a workplace accident due to the employer’s negligence (e.g., lack of safety measures). The employer fails to report the incident or pay compensation to the employee’s family. The family can approach the Employees’ Compensation Commissioner, and the employer may face penalties, including enhanced compensation and legal prosecution.

Disclaimer

This article is for basic understanding of the Code on Social Security, 2020, and specifically Section 30 relating to Employees’ Compensation. It should not be treated as legal advice. For specific legal guidance, please consult with a qualified legal professional.