Employees Are Important?
Every business in any economy is said to be incomplete without the presence of its employees. Be it small or large firms, employees are the backbone of every business. So, the stronger the workforce, the stronger the business is.
Therefore, it is important for any business to create a healthy relationship with its employees as greater happiness and productivity of the workforce certainly leads to higher profits for the business.
Factors for Superior Employer-Employee Relationship
To develop a healthy relationship, the company must focus on meeting the necessary needs and requirements of the employees, be it on the job or after retiring or even in the case of an accident or any death of its employees.
One of such scenarios in which the business can prove the importance of their workforce is by compensating the workmen for their loss while carrying out their work. Even the government has found it necessary for every business to follow such human responsibility towards the employee’s loss thereby creating the Workmen Compensation Act, 1923.
The Workmen Compensation Act
The monetary compensation had always been a contentious issue between the workers and their employers. Even though the company would want to pay and would like to see the worker out of any financial hardship, the upper and lower limits were always an issue of the contest.
In 1923, the Workmen Compensation Act was passed to pave the way for a formula to determine the compensation payable to workers by their employer, if they are injured, die or contact disease affecting their financial capabilities.
By definition, Workmen Compensation Act, 1923 is defined as an act to provide for the payment by certain classes of employers to their workmen of compensation for injury by accident. It came into force on the first day of July 1924 and was introduced as the first measure of social security, and also it extends to the whole of India.
What all is Covered Under this Act?
The workmen’s compensation act helped create a very simple procedure for both the parties to arrive at a reasonable settlement amount in the event of an accident. It only states the employee is declared to be entitled to the benefit of the law regardless of negligence if the personal injury/death of the workmen is caused while performing the work assigned to him by the employer.
The Act ensures that workers of the establishment are covered for:
- Any temporary injury which forces them to stay away from work for more than three days
- Permanent Disability of any kind which can have the following effects:
- Affecting the income of the worker as he/she will not be able to do the same job anymore
- Not affecting the earning ability
- Death due to a work condition, an accident at the workplace
- Any occupational disease contracted
One fact to notice here is that all injuries etc. should be contracted either at the workplace or during an activity that is related to their work. Therefore, the act does not provide any relief to the workers for injuries sustained in their daily life outside of work.
Who is an Employer in the Act?
According to the Act, the employer can be:
- A body of persons whether incorporated or not,
- Any managing agent of an employer or
- The legal representative of a deceased employer
- The contractor is considered ‘an Employer’ if a person employed by him/her is sent to work for another employer (a client of the contractor).
The workmen who come under the Schedule 2 of Act 1923 are eligible for the workmen’s compensation like manufacturing workers, telephone line workers, transporting goods and equipment, handling equipment, drivers and even circus employees, etc.
How Does This Act Affect an Employer?
As Workmen Compensation Act is mostly about monetary compensation, it affects the business in financial terms. To summarise:
- Compensation will need to pay to the injured worker according to the act
- Work will be affected depending on the expertise level of the worker
A sudden accident in the work premises might cause a huge impact on the cash flow of the business also affecting the smooth running of the business, especially in SMEs, when it has to pay the amount eligible to the workmen as per the act.
What’s The Solution?
One must be prepared for unforeseen scenarios. Considering the nature of the compensation, a “Financial Liability Cover” for the worker’s compensation will help the business to tackle such kinds of situations.
The Worker’s Compensation Insurance protects the business from the burden of paying the amount of compensation under the act. Businesses might pay a nominal amount every year for such liability cover, but it would be worthwhile when such unanticipated accidents occur and have to be compensated accordingly.
How to Buy?
All top insurance providers in the market who provide insurance cover for business also have a policy for workmen’s compensation and other liability that any business may face depending on the nature of the firm.
With online insurance advisors like SecureNow, you can buy this insurance within minutes by entering your details online through their website. The greatest advantage of online insurance advisors is that you can compare multiple policies from multiple insurers online and get 24×7 support with your purchase and claim.