Compensation – A Landmark Judgement

A judgement of Madras High Court has called for amendment to The Workmen’s Compensation Act, 1923. It is indeed a landmark judgement.

The Act says “Compute compensation presuming a maximum wage of Rs. 4,000 pm in case it exceeds that amount.” This effectively limits the compensation payable in the case of death or disability. Justice Kirubakaran’s judgement states that the limit should be revised substantially or there should be no limit for computation of compensation at all.

In an era when even the minimum wage is exceeding Rs. 4000 pm, the limit is undoubtedly ridiculous and needs revision. The Government’s negligence in updating labour laws is now notoriously legendary. The Industrial Disputes Act and The Payment of Bonus Act are examples of how the labour laws are completely outdated. The former puts the wage ceiling of Rs. 6,500 pm to disqualify a supervisor from being a ‘workman’ under the Act, meaning thereby that he cannot claim the protection that Act provides to workmen. This makes it irrelevant. Who is able to recruit a supervisor at a salary lower than that today?

Justice Kirubakaran has quoted a recent judgement of the Supreme Court that emphasises interpretation of welfare legislation in accordance with the purpose of the Act. The Supreme Court says, “….Court should make an effort to protect the rights of the weaker sections of society in view of the clear constitutional mandate discussed above.”

While one can easily see that the recommendation of revision of wage limit is justified and surely welcome, what will cause worries to employers is whether there is going to be a flood of ‘populist’ judgements as in the past.

Well, let us see. It is interesting that nobody expects the Governments, Central and State both, to be responsive to changing times and keep the labour laws updated. By the way, do you remember the name of the Union Labour Minister?