Employer’s Liabilities Under Labour Laws


An employer is a person that controls or directs a worker under an expressive contract of employment and pays them salary or wages as compensation. In many of the nations, Governments are the single largest employers, but most of the workforce is employed in small and medium businesses in the private sectors.

According to Section 2(g) of the Industrial Disputes Act, the term employer as:

  1. About an industry carried on by or under the authority of any department of the Central or State Government, the authority prescribed in this behalf, where no authority is prescribed, the Head of the Department;
  2. About an industry carried on by or on behalf of a local authority, the chief executive officer of that authority.

And under the Workmen’s Compensation Act, 1923, section 3 of the Act talks about the liability of an employer to pay compensation to the employee in certain cases which includes:

  • If personal injury is caused to a workman by accident, arising out of and in the course of his employment, the employer shall be liable to pay compensation under the provisions of Chapter II of the Act:

This compensation is subject to the employer shall not be so liable –

  1. In respect of any injury which does not result in the total or partial disablement of the workman.
  2. In respect of an accident which is directly attributable to –
  3. The workman was under the influence of drinks or drugs, or
  4. The willful disobedience of the workman to the orders for the purpose of securing his safety, or
  • The wilful removal or disregard by the workman of any safety guard or devices for the purpose of securing the safety of workmen.

Amount of Compensation

Under the provisions of the Act, the amount of compensation provided by the employer in case of an accident to the employee will be as follows:

  • In case death results from the injury which, an amount which is equal to fifty percent of the monthly wages of the deceased workman, multiplied by the relevant factor; or an amount of fifty thousand whichever is more.
  • Where there is permanent or total disablement results from the injury, an amount equal to sixty percent of the monthly wages of the injured workman multiplied by the relevant factor; or an amount of sixty thousand or more.

Employers Liability Act, 1938

One of the main objectives of the Act was to provide certain defenses which shall not be raised in a suit for damages in respect to the injuries caused by the workmen while working. The Act makes provides provisions for the safeguard and good condition of work as well. Section 2(b) of the Act provides the term employer as well as certain other provisions of the Act, which also provides for certain liabilities of the employer in case of the injury or damages caused to the workmen. The objective of the Act was to rule out certain defenses to the employer which are arising out of the injuries and damages sustained by the workmen. The law also provides for the protection of workmen in safeguarding their interests which bring suits for damages that occurred to them during their operation.

Section 3 of the Act gives a defense of common employment barred in certain cases where employee causes personal injuries and its states that:

  1. By the omission of the employer to maintain good and safe conditions of work, machinery or plant connected to his trade or business, or the omission on the part of any person in the service of the employer with the duty if seeing that such works, plant, and machinery are in a good and safe condition, or
  2. Because of the negligence of any person in the service of his employer who has any superintendence entrusted in him, while in the exercise of such superintendence; or
  3. Because of the negligence of any person in the service of his employer to whose orders or directions the workman at the time of injury was bound to conform and did conform, where the injury resulted in his having so confirmed.

Certain other provisions of the Act provides that any suit for damages brought by any workman who has suffered from any personal injury due to non-maintenance of healthy conditions of work, good and sound machinery, equipment, etc., or by reason of the negligence on the part of the persons employed by the employer, such suit shall not be failed by any reason of employment of such workman with the employer.

Employer not Liable to Pay Compensation

The employer is not liable to pay compensation under some circumstances:

  • If the injury will not result in a permanent incapacity or incapacitates the workman from doing his normal works.
  • If the injury is self-inflicted.
  • The death or disablement resulted from the injury was falsely claimed by the employee to get free of to the employer.
  • If the injury was caused due to the consumption of alcohol or drugs by the employee during the time of his work.


Every employer-employee relationship comes with disputes among them as well. Sometimes, the above-stated enactments give certain guidelines to both of them in order to conclude a settlement. When looking into the liability of the employer to providing compensation to the employee, it is mandated that the employee has gone through certain injuries or damages. There are many companies which look after their employees properly with adequate facilities and provide compensations and rewards. But there are certainly other places wherein employees are being treated badly. All statutes stand for the smooth running of a business as well as for building up healthy relations among the employer and employee.


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