Employees’ Compensation (Amendment) Act 2017: What is it?


It provides more rights to employees and safeguards their interests.

The Employees’ Compensation (Amendment) Act, 2017, introduced in the Lok Sabha in August, 2016 received the President’s approval last week. The amendment is to the Employees’ Compensation Act, 1923.

The details of the amended bill are as follows:

1. It is the employer’s responsibility and duty to inform an employee of his rights. According to the Act, “Every employer shall immediately at the time of employment of an employee, inform the employee of his rights to compensation under this Act, in writing as well as through electronic means, in English or Hindi or in the official language of the area of employment, as may be understood by the employee.

2. Failure to do so will make the employer liable to penalty. The Bill penalises an employer if he fails to inform his employee of his right to compensation. As per the amendment, the penalty amount has been increased from a maximum of Rs. 5000 to a definite penalty of Rs. 50,000 which may be further extended to Rs. 1 lakh.

3. As per the amended act, appeals can be made against orders related to compensation, distribution of compensation, award of penalty or interest, only if the amount in dispute is at least Rs 10,000. The same has been revised from the earlier minimum amount of Rs 300.

4. Any dispute related to an employee’s compensation will be heard by a commissioner who will have the powers of a civil court. Appeals from the commissioner’s order, related to a substantial question of law, will lie before the High Court.

5. In a further amendment, the Act has scrapped the rule as per which the employer could temporarily withhold any payments towards the employee in case the former had appealed against a commissioner’s order.