Workers’ Compensation for Occupational Disease

Workers’ Compensation for Occupational Disease

Ravikant Sawant's avatar

Every workplace, whether it is a busy factory or a slick IT office, has risks that are not necessarily visible to the employees. Whereas accidents are short term and visible, occupational diseases usually sneak in silently- they develop following extended exposure to dangerous environments. Workers’ compensation for occupational disease is in place to cushion the employees against these hidden risks.

Occupational diseases are a sad truth in India where millions of workers work in industries that deal with chemicals, mining, construction, and manufacturing. These diseases such as respiratory diseases, dermatological disorders or musculoskeletal disorders may greatly affect the earning capacity and livelihood of a worker. The Government, via the Employees Compensation Act and other laws, provides proper compensation and medical assistance to the concerned employees in case such illnesses are attributed to their employment/occupation.

In this article, we will go into the depths of how occupational diseases are identified and compensation is ascertained. We will also throw some light on the rights of employees and employers, as dictated by the Indian law.

What Is an Occupational Disease?

An occupational disease refers to any illness or complication that occurs as a result of frequent contact with workplace hazards or the occupation of an individual. These diseases are not an overnight occurrence like an injury. Rather, they come about after months or years of exposure.

As an example, a coal miner working with dust all his life may develop pneumoconiosis, whereas a factory employee working with chemicals may suffer from dermatitis. On the same note, a prolonged exposure to machinery with extreme noise levels may cause hearing impairment, and typing or repetitive movement may result in carpal tunnel syndrome.

The main difference between a common disease and an occupational disease is the cause: an occupational disease is closely associated with the terms of work. This has been recognized in Indian law, pursuant to Schedule III of the Employees Compensation Act, 1923, which contains a list of known occupational diseases and their respective industrial groupings.

The legal system in India is very effective in offering maximum support to the workers who are victims of employment-induced diseases. The major legislations in this context include:

  1. The Employees’ Compensation Act, 1923 (previously called the Workmen’s Compensation Act):

This is the foundation of the compensation law in India. It requires employers to pay workers compensation in case of injuries or diseases that occur out of and during employment. The Act specifically acknowledges occupational illnesses covered by Schedule III and establishes employer liability on such illnesses.

  1. The Employees’ State Insurance Act of 1948 (ESI Act):
     

Under this Act, medical care and financial relief are offered under the Employees State Insurance Corporation (ESIC). Employees who are insured and diagnosed with occupational diseases are entitled to medical treatments, sickness benefits and disablement compensation.

  1. The Factories Act of 1948:
     

This law focuses on health and safety guidelines and mandates that workers go through regular medical examinations. It also looks to ensure that the workplace is free of any substances that can result in health hazards.

Collectively, these laws provide the basis of the law to combat occupational health risks and compensate employees in the event of any failure to prevent such risks.

Eligibility Criteria for Workers’ Compensation for Occupational Diseases

Not every illness qualifies for compensation under the law. The eligibility depends on several conditions:

  • Employee Status: The claimant must be classified as a “workman” or “employee” under the Employees’ Compensation Act or ESI Act.
  • Causal Connection: The disease must have been contracted due to the nature of employment and exposure at the workplace.
  • Recognition in Law: The disease should fall under the recognized list in Schedule III. However, courts have occasionally accepted claims even for unlisted diseases if direct proof of occupational linkage is established.
  • Exposure Duration: The employee should have worked in the harmful environment long enough for the disease to plausibly develop.

For example, a textile worker who develops byssinosis (a lung condition caused by cotton dust) would be eligible for compensation since the disease is recognized as occupational and directly related to textile manufacturing.

Workers’ Compensation Calculation for Occupational Disease

Workers’ compensation under the Employees’ Compensation Act is determined by specific formulas, ensuring fairness and uniformity. The amount of workers’ compensation depends on factors such as the nature of disability (temporary or permanent), the percentage of loss of earning capacity, the age of the worker, and the monthly wages.

The general formula is: Workers’ Compensation = 60% of Monthly Wages × Relevant Factor (based on age)

For death cases, the Workmen compensation equals 50% of the monthly wages multiplied by the relevant factor, or a minimum of ₹1,20,000—whichever is higher. For permanent total disablement, it is 60% of monthly wages multiplied by the relevant factor or ₹1,40,000—whichever is higher.

Example:
Let us suppose a 35-year-old worker earning ₹15,000 per month develops an incurable occupational lung disease leading to total disability. In this instance, the workmen compensation  might be approximately ₹8–9 lakhs, depending on the statutory factor applied.

Additional benefits may consist of:

  • Healthcare costs of treatment and hospitalization.
  • Reimbursement of the re-employment costs incurred through rehabilitation and vocational training, where feasible.
  • IWorkmen compensation is also disbursed to the legal dependents of the worker, in case of death.

Claims Process for Workmen Compensation for Occupational Disease

There are several important stages in the process of claiming workers compensation due to occupational disease:

  1. Timely Notification: The worker or his/her family should notify the employer when diagnosed with an occupational disease.
  2. Medical Certification: Have a registered practitioner issue a medical certificate that the sickness is work related.
  3. Duty of the Employer: The employer should send the case to the Commissioner of Employees Compensation and keep proper records.
  4. Filing of Claim: The worker (or dependents) files a claim under the Commissioner of Employees Compensation within the prescribed period; typically two years from the time of diagnosis.
  5. Hearing and Decision: The Commissioner reviews evidence presented, employer liability and medical reports,  prior to issuing the  workmen compensation order.

In case the workmen compensation claim is rejected, employees can appeal to a superior authority or a court.

Responsibilities and Liabilities of Employers

Employers bear a statutory duty of care toward their workers’ health and safety. This includes:

  • Ensuring adequate ventilation, safety gear, and health monitoring.
  • Providing medical check-ups for employees exposed to hazardous substances.
  • Reporting cases of occupational diseases to the relevant authorities.
  • Purchasing Workmen’s Compensation Insurance to cover liability risks.

Non-compliance can lead to severe penalties, including fines and imprisonment. Moreover, employers who fail to report or delay  workmen compensation can be held liable for additional damages and interest.

By maintaining a transparent and proactive health policy, employers not only comply with the law but also build trust and goodwill within their workforce.

Insurance Coverage for Occupational Diseases

To mitigate financial risks associated with  workmen compensation claims, businesses in India typically opt for Workmen’s Compensation Insurance (WC Insurance).

The  Workmen’s Compensation Insurance Policy typically covers:

  • Compensation payable under the Employees’ Compensation Act.
  • Medical expenses and legal costs arising from occupational disease claims.
  • Death and disability benefits for affected employees.

Workmen’s Compensation Insurance assists employers to meet the legal requirements without incurring disastrous financial damages. There are numerous insurers, both publicly and privately operated, which provide comprehensive Workmen’s Compensation Insurance policies with occupational hazards coverage that are applicable across industries.

For employers, the appropriate selection of coverage guarantees business continuity, adherence to the law and ethical obligation to employee welfare.

Measures to Prevent Occupational Diseases

Compensation is critical,  prevention forms the foundation of occupational health management. Employers must take the responsibility of developing safer workplaces through:

  • Frequent Safety Audits: The identification and reduction of possible hazards before they cause harm.
  • Protective Equipment: Availability and adequate use of masks, gloves, ear protection and safety uniforms.
  • Periodic Health Monitoring: Periodic medical check-ups to detect any occupational diseases at an early stage.
  • Proper Training and Awareness: Training of the employee in regard to safe handling of materials and ergonomics.
  • Environmental Controls: Ventilating, installing dust collectors and setting up noise control systems to minimize exposure.

Prevention not only saves lives but also reduces compensation costs, absenteeism, and employee turnover. Thus, it helps enhance productivity and morale across the organization.

Final Thoughts:

Occupational diseases may not feature in headlines, but they are silently harming the lives and health of millions of workers in India. The workers compensation system for occupational disease is a central pillar of justice. It appreciates the sacrifices of workers who put their well-being at risk in an effort to help the economy grow.

Compensation is, however, not the ultimate solution. Legal protections should be accompanied by a strong safety culture, prevention strategies, frequent health monitoring and a high level of responsibility by the employer. Both the employers and the policymakers should be alert and responsive as the industries modernize and new risks appear.

Finally, providing employees with safe and healthy working conditions is not only a legal requirement but also a moral one. The pillar of a healthy nation is a healthy workforce and enhancing workers’ compensation for occupational disease would be a decisive step towards that common future.

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