HR Services1

HR Services1

Sunday, 26 May 2013

8 common mistakes most of HR Professionals make!!




Today, I want to share some of the mistakes which HR professionals make at various stage of their career. 

Yes, I am also one of them who has made such mistakes . Hope this post will help all those who are about to do a lot in their HR career. Why to make mistakes if you can learn for others. Better learn from them, evaluate and take your own decision.

Not knowing about law and rules / regulations set by Government 


It is very important for all of us to have knowledge of laws and rules / regulation set by government i.e. Central and State Governments. These are the basics when it comes to articulate policies of your company for human resources. You cannot make any policy which is inferior than set rules and regulation by government. 

For example, you cannot give less leaves than prescribed by state government. There is no restriction on giving more. So if you are not aware about leave entitlement set by government which means you are setting a wrong policy which is not accepted. You should participate in various discussions happening on different HR forums to learn. Also you need to be updated about announcements / notification coming from time to time and accordingly take your decisions. One of such forum is HR SUCCESS TALK Forum where you can ask questions and get reply for other HR members and download recent notification given by government. Understanding of statutory laws is also necessary from compliance point of view. Small mistake can turn big and can even lock out the company especially in manufacturing industry or any other industry where labour is involved.

Copy paste of policies and procedures


Well, I have made this mistake myself at early stage of my career. I think it was due to my impatience to implement so many HR things without understanding my company needs. Such implementations do not benefit organization and at end, it is waste of time and money. So it is very important to understand your company and then make policies and procedures. There is no harm in referring policies and procedures set in other companies but do not simply copy and paste them. Better tailor made them for your company requirement. For example, you have to work on building matured performance management system in your company but there are majority of employees are workers and the procedure you choose is best suited for executives and above then it will not benefit company and employees. In fact, it will make situation worse.

Also be careful when you are making policies of company. You should think 360 degree before you submit it for final approval to management.  You should also know Do’s and Don’t while making or reviewing Company HR Policies


Not giving due importance to informal communication channel


We all know, what is formal way of communication? It is in form of written material which is available as hard copy, soft copy or on company web. These are approved and well known to all. We as HR, keeps sending formal communications to employees, by way of circular and email. But informal communication channel is more effective than our formal communication channel. As HR, we should know how to make best use of this channel? If you are leading a HR department, you cannot be present at every place to know what are the informal talks going on? 

In my experience, I have exercised a method to get best out of informal communication channel. I along with my HR team members use to come to know about pain areas of an individual or group of employees through informal communication channel. Example, let’s say one employee, during lunch hour, mention to one of my team member that he feel that his salary transferred is less than expected. This information or grievance can be communicated to payroll executive handling salary issues.  I would expect my payroll team member to quickly have a look at it and call or send email to that employee and clarify his doubt. There could be a possibility that error is at our end so we better rectify it and communicate to employee that it will be paid as arrears in next month and ensure it get paid. 

Here role of each HR team member is very important to keep interacting with employees and communicate such grievances and information to concern team member in HR. If you as HR, exercise this sort of practices, you will see a drastic dip in your formal grievance registered by employees and increase in satisfaction level of employees from HR department. 

You can also use informal communication channel to understand usefulness of any change in policy which you have made recently, happiness of employees from recent appraisals etc.

Not communicating quicker


One of biggest mistake you can make as HR, when you don’t communicate with employee or delay in your communication. If an employee has sent you a request for advance approval and you have not taken action on it for another two days, then there are high chances of this being an escalation and later on you will spend a lot of your time managing such escalations. 

There could be two types of requests which will come to you and my views on how do you handle it.

Normal Requests where we have the information: Request like demand of salary slip, leave balance, information on any policy etc are some of the requests which are well known or we have information available. In such cases there should be no reason why we should not reply to such request immediately? Hence do so. In case you receive any request, which are not concerned with you, you can forward that request to concern person in your HR team or other department cc to employee, so that employee should know that his request has been sent to concern person and in future he can direct such request to correct HR representative or representative of any other department to get immediate response.

Request where you need further discussion or approval: In case, you come across a request where current policies are not clear or you need to take further approval, you should do it and inform employee about the timelines to get back. Lead the discussion and inform employee about the final outcome. Don’t leave it unattended.

Taking data management lightly / automation


Never ever take your data management lightly. This is true for every department including HR. If you don’t maintain your data in proper way then you will not be able to answer employee / management queries properly. You will take more time to analyze the data and take decision basis on such analysis. Also it is important that only one person should be responsible for one data point. 

Example, one employee should be responsible for employee master maintenance and any modification, addition or deletion should be made by that employee only. In case any other HR team member come to know about anything which also require changes in employee master then it should be communicated to employee managing employee master. This employee should circulate employee master to all the concerned team members. This way there will be very less chances of missing any information and correctness of data will be more accurate. 

Managing records also one of part of managing your data. If you don’t manage personnel file of employees in better way then you will not have record when you need it for taking any action. So better ensure that records are managed well in time and not asked when you need it.

Automation can be a great help when it comes to managing HR operations. It can also take care of your data management part. Automation sound easy but it is one of toughest job. Once implemented successfully it gives huge benefits in all respects.


Exercising employee engagement activities without understanding impact of it



Well employee engagement is one of the most exciting things for HR professional but un fortunately, we exercise employee engagement activities without understanding impact of it. In early stage of my career, I use to think that fun activities on floor are employee engagement activities. May be most of us still thinks so. 

Employee engagement is not about fun activities, trip for employees etc, but is way ahead than this. Employee engagement means engaging employee with company and merely some fun activities will not be able to do so. It can be a part of employee engagement activity but not all.

Most of employee leaves company for better pay package hence as HR, we should always do internal and external salary benchmarks.

To ensure no difference between salaries of employee working on same profile and level, internal salary benchmark can be exercised. Also to understand that employees working on various profiles are being paid as per industry, HR can perform external salary benchmark. Now we know what could be impact of such exercises and what we want to achieve out of it. In this case, it makes sense and will help to achieve employee engagement. 

Similarly, other steps can be taken to ensure employees are happy with organization culture, there is no or less conflict between employee and superior, career path for employees, ample opportunities to learn etc.

Doing training for sake of doing it


Still a lot is to be learned in this segment by HR professionals. Many of us still do training for sake of doing training without understanding whether these training programs are helping us in any way? 

We make training calendar in the starting of the year and try to ensure that training mentioned in the calendar get executed. We take feedback from participants and some time from trainer, do some paperwork and close our files. We even don’t bother to understand whether a particular training program made any difference or we just wasted our time on it including trainer and participants. Hence we should learn ways to make effective training calendar, identifying training needs of company, better ways to execute training so that learning is more and ways to evaluate ROI (Return on Investment) of training programs executed.

Refer post "How to get best out of training programs conducted in your organization?"

Do not know about various business segments of organization


Now days, companies are into diverse product and services. Companies are spreading their wings to exposure new market and enter into new product and services. Hence we also need to explore ourselves to know about each and every business vertical we have. In absence of understanding a department or business unit, we will not be able to contribute fully. We will make mistakes during recruitment, performance management, framing policy etc, if we are not aware about business model and various profiles which are required to run this business model. Hence, we need to spend adequate time to know about functioning of our various departments and business units, the way we do to learn about HR. Then only you will be able to align HR practices to business growth and be partner to success of company.

I am sure there are many other mistakes which we can think of and made in our career. Please do share with all of us such experience and opinion. 






Wednesday, 22 May 2013

12 Facts about Leaves and Holidays in India!!



Q 1 : How many leaves should be applicable in a company?


Numbers of leaves entitlement in a company depends upon state you are in. Every state has different leave entitlement and leave policies which should be seen before you define leave policy of your company. Leave policy of your company can not be less than mentioned  in your State’s shop and establishment act.
You can refer below link to download some relevant attachments which describe leave entitlement in various states.

http://hrsuccesstalk.com/forum/Thread-Leave-entitlements-in-different-states-as-per-Act


Q 2: Whether an employer is bound to grant sick leave to an employee if employee submits medical certificate?


Technically speaking an employer is not bound to accept any sick leave even if it is accompanied with medical certificate in case employer is not satisfied with the certificate submitted. There is no act on this issue.
But normally when an employee submits medical certificate from a competent medical practitioner then employer should accept it otherwise it will be considered as illogical.

Q 3: Leave is right of an employee?


Leave is not right of an employee. An employee is given casual, sick and privilege leave for some purpose.

Casual leave is provided to an employee to take care of urgent and unseen matters like Parents teacher meeting called by kid’s school in short notice.

Sick leave is provided in case employee gets sick.

Privilege leaves are provided for planned long leaves for the purpose of travel, vacation etc.

Employee need to apply for each leave and take approval except in cases where approval could not be taken in advance. Employer can refuse the leave application, if not satisfied with the reason of leave. There is no set rule for which leave to be approved and not approved. It depends from reason to reason. Eg. If an employee ask for leave to watch cricket match, it can be refused.

Q 4: Mass casual leave applied by group of employees. What do an employer should do?


If the reason of mass casual leave by many employees is to hamper work intentionally, demonstrating against the employer etc then employer has all the rights to refuse such leaves and further if required taking disciplinary action.

Q 5: Do an employer can ask medical certificate for one day sick leave?


No, an employer should not ask for medical certificate for one day sick leave. In one of the case Supreme
Court has mentioned that an employee will not necessary go to see a doctor for treatment if illness is only for one day.

That is the reason most of the companies ask for medical certificate, if employee is on sick leave for 3 or more days.

Q 6: Holidays and weekly off to be included or excluded while calculating number of leaves when holidays falls in between leaves?


It is one of the questions which confuse many HR professional. Technically speaking, all leaves with pay are excluding weekly off and holidays which means even if an employee is on leave for whole month (30 days) which includes 4 weekly off and 1 holiday then employee should be considered on leave for 25 days only.
Similarly, if an employee take leave from Saturday to Monday where Sunday is weekly off then Sunday should not be counted as leave. Hence only 2 leaves should b counted.

Q 7: What is the concept for giving compensatory off on national holiday, holiday and weekly off?


Compensatory Off in case of National Holiday or Holiday : Compensatory off should be given within 90 days of national holiday or holiday for which employee has worked along with one day average daily wage

OR

Employee can choose for double rate of average daily wage.

This is as per Punjab Industrial Establishments (National and Festival Holidays and Casual and Sick Leave) Act 1965 which is extended to Delhi also.

Compensatory off in case of weekly off: Employee should be given weekly off 3 days before or after weekly off on which he worked so that worker should not work for more than 10 days consecutively without a weekly off.

Q 8: Please explain concept of Encashment of leave?


Under Factory Act there is no mention of leave encashment while in service even with consent of Management. An employee can take leave encashment while quitting services, superannuation, discharge, dismissal or death. Leave encashment should be as per average daily wage of employee. There are some companies which pay leave encashment on basic and DA, which is not correct.

Q 9:  Can employee take leave during notice period?


Yes, employee has right to take leave during notice period. In one of the case, Ghanshyam Vs Delhi Metro Rail Corporate, 2007, Delhi High court has confirmed the same.

Q 10: Can Leaves be clubbed together?


As per Delhi Industrial Establishments (National and Festival Holidays and Casual and Sick Leave) Rule 1973, Casual leave cannot be clubbed with any other leave.
That is the reason most of the companies do not club Casual leave with any other leave but Sick Leave and Privilege leave can be clubbed together.

Q 11: What should be leave policy of company?


Below is the draft which should be part of company leave policy. You can make changes are per your requirement.

Leave Policies

Commencement of Leave Period: 1st January to 31st December of every year. Grant of leave shall depend upon the exigencies of the work and shall be at the discretion of the manager/management.

All regular employees are entitled to 27 days leave in a year. There are three types of leave: Casual, Sick and Earned. The details are as follows:

Casual Leave

Maximum Limit: 6 Days

Leave Application: A formal leave application needs to be submitted at least one day (or earlier) before commencement of leave. Non-compliance will result in it been treated as “Absenteeism". No Casual leaves will be entertained without prior permission.

Rules:
1. CL can be taken for minimum 0.5 to maximum 3 days. In case of more than 3 days leave, it should be taken as EL.
2. There are no casual leave carry-forwards. At the closing day of financial year any available leave under this head will lapse automatically.
3. Can not be appended with EL/SL.
4. Need to apply atleast a week before for 3 days leaves.
5. Pro rata entitlement for new joinee & resigned emloyees
6. All employees who worked for total of 10 days in a month would be eligible for prorate leave for that month.

Sick Leave

Maximum Limit: 6 Days.

Leave Application: Submission of leave application or intimation to office is expected.

Rules:

1. SL can be taken for minimum 0.5 to maximum 7 days (paid) .
2. There are no sick leave carry-forwards. At the closing day of financial year any available leave under this head will lapse automatically.
3. For all absences exceeding 3 days, medical certificate needs to be enclosed. For all absences exceeding 7 days, every additional day beyond the 7th day will be adjusted against Earned Leave in credit of the employee, subject to production of aforesaid medical papers.
4. SL can be appended with EL.
5. Pro rata entitlements for new joinee & resigned employees
6. All employees who worked for total of 10 days in a month would be eligible for prorate leave for that month.

Earned Leave/ Privilege Leave

Maximum Limit: 15 Days

Leave Application: Leave application needs to be submitted and approved by immediate manager, at least 15 days before commencement of leave.
Rules:

1. EL can be taken for minimum 3 to maximum 15 days . PL cannot be taken for less than 3 days.
2. EL are carried forward subject to maximum limit of 60 days. Any accumulation beyond 60 days, will lapse automatically at the end of the financial year
3. Pro rata basis for new joinee cannot be normally granted. It can be granted only if there are exceptional situations as given below with due approval from Reporting Manager:--
a. Death in Immediate Family (Spouse/Child/Parents)
b. Child Birth
c. Self marriage
d. Accidental Hospitalization.

4. Earned Leave will be credited in the beginning of Calender Year to every employee’s account, but the entitlement will be proportional to the number of months worked. E.g. For every month completed in the pay roll of the company 1.25 days will be credited to the employee’s entitlement.
5. For resigned employees their leaves entitlement would be calculated pro rata i.e. till their last day of work. Any excess leave taken would be adjusted in F& F.

Q  12: Share abstract from Factory act and Delhi Shop and Establishment Act which describe about leaves?


ABSTRACT FROM FACTORY ACT REGARDING LEAVE

79. ANNUAL LEAVE WITH WAGES. - (1) Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of - (i) if an adult, one day for every twenty days of work performed by him during the previous calendar year; 
(ii) if a child, one day for every fifteen days of work formed by him during the previous calendar year. 
Explanation 1 : For the purpose of this sub-section - (a) any days of lay off, by agreement or contract or as permissible under the standing orders; 
(b) in the case of a female worker, maternity leave for any number of days not exceeding twelve weeks; and 
(c) the leave earned in the year prior to that in which the leave is enjoyed; shall be deemed to be days on which the worker has worked in a factory for the purpose of computation of the period of 240 days or more, but he shall not earn leave for these days. 
Explanation 2: The leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave.
(2) A worker whose service commences otherwise than on the first day of January shall be entitled to leave with wages at the rate laid down in clause (i) or, as the case may be, clause (ii) of sub-section (1) if he has worked for two-thirds of the total number of days in the remainder of the calender year. 
(3) If a worker is discharged or dismissed from service or quits his employment or is superannuated or dies while in service, during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled to wages in lieu of the quantum of leave to which he was entitled immediately before his discharge, dismissal, quitting of employment, superannuation or death calculated at the rates specified in sub-section (1), even if he had not worked for the entire period specified in sub-section (1) or sub-section (2) making him eligible to avail of such leave, and such payment shall be made - (i) where the worker is discharged or dismissed or quits employment, before the expiry of the second working day from the date of such discharge, dismissal or quitting, and 
(ii) where the worker is superannuated or dies while in service, before the expiry of two months from the date of such superannuation or death. 
(4) In calculating leave under this section, fraction of leave of half a day or more shall be treated as one full day's leave, and fraction of less than half a day shall be omitted. 
(5) If a worker does not in any one calendar year take the whole of the leave allowed to him under sub-section (1) or sub-section (2), as the case may be, any leave not taken by him shall be added to the leave to be allowed to him in the succeeding calendar year: 
Provided that the total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty in the case of an adult or forty in the case of a child : 
Provided further that a worker, who has applied for leave with wages but has not been given such leave in accordance with any scheme laid down in sub-sections (8) and (9) or in contravention of sub-section (10) shall be entitled to carry forward the leave refused without any limit. 
(6) A worker may at any time apply in writing to the manager of a factory not less than fifteen days before the date on which he wishes his leave to begin, to take all the leave or any portion thereof allowable to him during the calendar year: 
Provided that the application shall be made not less than thirty days before the date on which the worker wishes his leave to begin, if he is employed in a public utility service as defined in clause (n) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947) : 
Provided further that the number of times in which leave may be taken during any year shall not exceed three. 
(7) If a worker wants to avail himself of the leave with wages due to him to cover a period of illness, he shall be granted such leave even if the application for leave is not made within the time specified in sub-section (6); and in such a case wages as admissible under section 81 shall be paid not later than fifteen days, or in the case of a public utility service not later than thirty days from the date of the application for leave. 
(8) For the purpose of ensuring the continuity of work, the occupier or manager of the factory, in agreement with the Works Committee of the factory constituted under section 3 of the Industrial Disputes Act, 1947 (14 of 1947), or a similar Committee constituted under any other Act or if there is no such Works Committee or a similar Committee in the factory, in agreement with the representatives of the workers therein chosen in the prescribed manner, may lodge with the Chief Inspector a scheme in writing whereby the grant of leave allowable under this section may be regulated. 
(9) A scheme lodged under sub-section (8) shall be displayed at some conspicuous and convenient places in the factory and shall be in force for a period of twelve months from the date on which it comes into force, and may thereafter be renewed with or without modification for a further period of twelve months at a time, by the manager in agreement with the Works Committee or a similar Committee, or as the case may be, in agreement with the representatives of the workers as specified in sub-section (8), and a notice of renewal shall be sent to the Chief Inspector before it is renewed. 
(10) An application for leave which does not contravene the provisions of sub-section (6) shall not be refused, unless refusal is in accordance with the scheme for the time being in operation under sub-sections (8) and (9). 
(11) If the employment of a worker who is entitled to leave under sub-section (1) or sub-section (2), as the case may be, is terminated by the occupier before he has taken the entire leave to which he is entitled, or if having applied for and having not been granted such leave, the worker quits his employment before he has taken the leave, the occupier of the factory shall pay him the amount payable under section 80 in respect of the leave not taken, and such payment shall be made, where the employment of the worker is terminated by the occupier, before the expiry of the second working day after such termination, and where a worker who quits his employment, on or before the next pay day. 
(12) The unavailed leave of a worker shall not be taken into consideration in computing the period of any notice required to be given before discharge or dismissal. 
80. WAGES DURING LEAVE PERIOD. - (1) For the leave allowed to him under section 78 or section 79, as the case may be a worker shall be entitled to wages at a rate equal to the daily average of his total full time earnings for the days on which he actually worked during the month immediately preceding his leave, exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the worker of foodgrains and other articles : 
Provided that in the case of a worker who has not worked on any day during the calendar month immediately preceding his leave, he shall be paid at a rate equal to the daily average of his total full time earnings for the days on which he actually worked during the last calendar month preceding his leave, in which he actually worked, exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the workers of foodgrains and other articles. 
(2) The cash equivalent of the advantage accruing through the concessional sale to the worker of foodgrains and other articles shall be computed as often as may be prescribed, on the basis of the maximum quantity of foodgrains and other articles admissible to a standard family. 
Explanation 1: "Standard family" means a family consisting of a worker, his or her spouse and two children below the age of fourteen years requiring in all three adult consumption units. 
Explanation 2: Adult consumption unit means the consumption unit of a male above the age of fourteen years; and the consumption unit of a female above the age of fourteen years and that of a child below the age of fourteen years shall be calculated at the rates of 0.8 and 0.6 respectively of one adult consumption unit. 
(3) The State Government may make rules prescribing - (a) the manner in which the cash equivalent of the advantage accruing through the concessional sale to a worker of foodgrains and other articles shall be computed; and
(b) the registers that shall be maintained in a factory for the purpose of securing compliance with the provisions of this section. 


ABSTRACT FROM DELHI SHOP AND ESTABLISHMENT ACT FOR LEAVE

Sub-section (16)—”Leave”
The expressions ‘leave means leave of absence, that is to say, the permission obtained by an employee from his employer relieving him from the duty of attending the work with or without pay. The dictionary meaning of the word ‘leave’ being permission, unless such permission is given or leave sought is granted, it cannot be said that the person seeking leave can absent himself from duty in an unauthorised manner; Industrial Tribunal v. Rabindra Nath Sen, 1963 I LLJ 582.

22. Leave.—(1) Every person employed in an establishment shall be entitled—
(a) after every twelve months’ continuous employment, to privilege leave for a total period of not less than fifteen days;
(b) in every year, to sickness or casual leave for a total period of not less than twelve days:
Provided that:
(i) an employee who has completed a period of four months in continuous employment, shall be entitled to not less than five days’ privilege leave for every such completed period; and
(ii) an employee who has completed a period of one month in continuous employment, shall be entitled to not less than one day’s casual leave for every month:
Provided further that a watchman or caretaker who has completed a period of twelve months in continuous employment and to whom the provisions of sections 8, 10, 11, 13 and 17 do not apply by virtue of an exemption granted under section 4, shall be entitled to not less than thirty days’ privilege leave.
(1A) (i) Privilege leave to which an employee is entitled under clause (a) of sub-section (1) or under any such law, contract, custom or usage, award, settlement or agreement as is referred to in section 3, or any part of such leave, if not availed of by such employee, shall be added to the privilege leave in respect of any succeeding period to which he is so entitled to, however, the total period of such privilege leave which may be accumulated by such employee shall not at any one time exceed three times the period of privilege leave to which he is entitled after every twelve months’ employment under that clause or under such law, contract, custom or usage, award, settlement or agreement.
(ii) Leave admissible under clause (b) of sub-section (1) shall not be accumulated.
(2) If an employee entitled to leave under clause (a) of sub-section (1) of this section is discharged by his employer before he had been allowed the leave, or if, having applied for and having been refused the leave, he quits his employment before he has been allowed the leave, the employer shall pay him full wage for the period of leave due to him.
23. Wages during Leave.—Every employee shall be paid for the period of his leave at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, exclusive of any earnings in respect of overtime but inclusive of dearness allowance.


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Wednesday, 8 May 2013

10 Facts you should know about Employee / Workmen Compensation Act in India


Q 1 : Whether contractual employee is eligible for claim under Employee Compensation Act?


Employee Compensation Act do not distinguish between types of employees- contractual, permanent, casual, daily wages and even employee working abroad- all types of employees comes under purview of this Act.

In case of contractual employee both contractor and principal employer are liable to pay compensation to employee in case of mishap defined in the act.




Q 2 : Can an employee or his dependent take claim under both ESI and Employee Compensation Act?


No, employee or his dependent can take claim under only one Act either ESI or Employee Compensation Act.

Q 3 : Can company take insurance policy to insure its liability under Employee Compensation Act?


Yes, there are insurance policies available to cover such liabilities and called WC-Workmen Compensation Policy. In case of any claim insurance company need to pay the same to claimant.

Also commissioner can direct insurance company to pay claim as per act even if claimant has claimed lesser amount.

Q 4 : Compensation calculation considering wage which is less than minimum wages of the state. Possible?


In one of the case, Karnataka High court has mentioned that in case workman wage is less than minimum wage of the state then minimum wage should be considered for calculation of Compensation.

Q 5: What type of events should be considered as Accident under the act?


As mentioned in my earlier post- What is Employee Compensation Act (Earlier known as Workmen Compensation Act), that Supreme court in one of its verdict mentioned that there must be a casual connection between the injury and the accident AND the accident and the work done in the course of employment for entitlement of compensation under the act.

Below are considered as accident and compensation is applicable:


  • Employee fall in well while going to attend a call of the nature while on duty and died
  • Driver killed by co driver while taking company truck from one place to another
  • Employee got chest pain and died while on duty
  • Employee got died or permanent total disability while operating some one else machine.
  • Accident of driver while vehicle was not moving


Below are some examples which can not be considered as Accident under the act:


  • Employee suicide in the premises.
  • Employee found dead far from company premises during working hours.
  • Killing of an employee by her husband at work place.


Q 6: Is there any time limit to claim Compensation?


As per act claim should be made within 2 years from the date of accident but Commissioner can entertain if he is satisfied with reason of delay.

Q 7: What is the time limit of compensation payment by employer?


It should be within one month else 12% interest on amount should be paid by employer apart from 50% penalty.

Q 8 : From which date compensation should be calculated?

Compensation should be calculated from the date of accident incurred.

Q 9 : Who has the onus to prove an accident?


Employee

Q 10 : Educational institute fall under Employee /  Workmen Compensation Act?


Yes

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Tuesday, 7 May 2013

What is Employee Compensation Act (Earlier known as Workmen Compensation Act)?

Introduction


Employee Compensation Act which was earlier known as Workmen Compensation Act which supports employee and its dependents in case of mis-happening with employee during course of employment.  As per this act Employer is liable to compensate in case of death or major/ minor injuries to an employee and his dependents.

Downloads : 

Bare Act : Workmen Compensation Act
Notification by government to cover all employees under this act

How to calculate compensation in case of mis happening?


IN CASE OF DEATH

50% of the monthly wages  X  Relevant Factor OR Rs 120,000/- whichever is more.  Also Rs 2500 for funeral expenses.

IN CASE OF TOTAL PERMANENT DISABILITY 

60% of the monthly wages  X  Relevant Factor or Rs 1,40,000/- whichever is more.

IN CASE OF PARTIAL PERMANENT DISABILITY

Such percentage of the compensation payable in case of TOTAL PERMANENT DISABILITY above as is the percentage of the loss in earning capacity (Refer Schedule I)

IN CASE OF TEMPORARY DISABILITY

A half monthly installment equal to 25% of the monthly wages, for the period of disablement or 5 years whichever is shorter


Note:


  • Relevant Factor for the calculation of the amount of compensation has been mentioned in Schedule IV of the act.
  • In case where wage of an employee less than minimum wage of the state, minimum wage should be considered for the purpose of calculation of compensation.
  • Maximum of Rs 8000/- can be considered as wages for the purpose of calculation of compensation wherever wages of employee is more than Rs 8000/-. Download notification in this regards.
  • Monthly wages is the average of last 12 months wages.


Examples 1 : An employee whose age is 25 years and monthly wage is Rs 3,000/- died in an accident during work.

Calculation:

As the age of the employee is 25 years hence the relevant factor as per Schedule IV is 216.91
In case of death we take 50% of monthly wages i.e. Rs 1,500/- in this case
Hence total compensation under the act will be Rs 3,25,365/- which will be paid as lump- sum amount
Also employee family will be paid Rs 2,500/- for funeral expense

Examples 2 : An employee whose age is 25 years and monthly wage is Rs 3,000/- incurred and get total permanent disability.


Calculation:


As the age of the employee is 25 years hence the relevant factor as per Schedule IV is 216.91
In case of death we take 60% of monthly wages i.e. Rs 1,800/- in this case
Hence total compensation under the act will be Rs 3,90,438/- which will be paid as lump- sum amount

What does Accident means?


Any accident with employee while working will definitely fall under the definition of Accident under the act but there are some occasions which are doubtful hence below are some cases and verdicts by authority, sharing with you, which will help you to understand what does accident means under the act.
Supreme court in one of its verdict mentioned that there must be a casual connection between the injury and the accident AND the accident and the work done in the course of employment for entitlement of compensation under the act.

Below are considered as accident and compensation is applicable:


  • Employee falling in well while going to attend a call of the nature while on duty and died
  • Driver killed by co driver while taking company truck from one place to another
  • Employee got chest pain and died while on duty
  • Employee got died or permanent total disability while operating some one else machine.
  • Accident of driver while vehicle was not moving
Also see:

10 Facts you should know about Employee /  Workmen Compensation Act in India


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