Fair payout based on ‘actual wage’: Kerala High Court upholds Rs 24 lakh relief to paraplegic

The order added that if an employee who draws monthly wages at a higher rate than that notified by the Centre under Section 4(1B) is deprived of compensation proportionate to his actual monthly wages, it cannot be said that just compensation was provided.

Background

• The respondent, Sudhish P S, a lineman (grade-II) for KSEB, sustained a severe spinal cord injury on April 4, 2015, when an electric post fell on his shoulder during a replacement operation.
• The injury resulted in paraplegia, leaving him bedridden and 100 per cent disabled.
• KSEB initially deposited Rs 7.17 lakh as compensation and provided medical reimbursements, arguing that since the respondent was accommodated in a supernumerary post with full benefits, he suffered no loss of earnings.
• However, the Commissioner for Employees’ Compensation, Alappuzha, rejected this, awarding a total of Rs 24.52 lakh by calculating compensation based on the respondent’s actual wages rather than the Rs 8,000 monthly cap applicable at the time of the accident.
• In the Kerala High Court, the appellant (KSEB) raised a procedural dispute regarding whether the Commissioner had the legal authority to suo moto award compensation that far exceeded the specific amount originally requested by the applicant in his claim.

Definition of wages

• The Employees’ Compensation Act defines ‘wages’ as including any privilege or benefit capable of being estimated in money, other than the allowances, contributions, etc, that are specifically excluded.
• The expression ‘wages’ would cover the remuneration earned by an employee as a whole, except for the excluded elements.
• It is also relevant to note that under Section 5, the provision providing for the method of calculating wages, no ceiling limit is contemplated.
• The opening part of Section 5 is emphatic that the expression “monthly wages” in the Act, for the purposes thereof, shall be understood as provided in Section 5.
• Section 3 of the Act places liability on the employer if personal injury is caused to an employee by accident arising out of and in the course of his employment.

‘Large section of workforce in unorganised sectors’

• In various sectors of employment in our country, employees are engaged under diverse arrangements.
• A large section of the workforce in our country is engaged in the unorganised sectors.
• In many of the employments in the unorganised sectors, there may not be any proper system of keeping records regarding the wages.
• Hence, in many situations, the employee/dependents may not be in a position to provide authentic evidence to the commissioner regarding the wages in the peculiar nature of engagement.
• Under such circumstances, the commissioners can rely on the amount notified by the central government under Section 4(1B) to calculate the compensation.

Court’s findings

• The expression ‘monthly wages’, as applicable to various situations, is specified under Section 5 (method of calculating wages) of the Employees’ Compensation Act.
• If the legislature intended to fix a uniform rate as monthly wages for the purpose of determining the compensation, Section 5 would not have been incorporated in the Act.
• Fixing a cap on the matter of monthly wages was deleted by the Amendment Act of 2009. The manifest intention was therefore to remove the cap.
• If the construction suggested by the senior counsel for the appellant is adopted, it would amount to re-introduction of a ceiling in the matter of monthly wages.
• Such an interpretation would not be in tune with the legislative intention, affirmed by the Amendment Act of 2009.
• If the provisions of Section 4(1B) and Section 5 of the Act are construed harmoniously, it can certainly be held that the provisions of Section 4(1B) enable the government to fix the monthly wages from time to time to ensure that employees/dependants seeking compensation under the Act would be entitled to reasonable compensation.
• Even if they fail to adduce reliable evidence regarding the actual monthly wages. In various sectors of employment in our country, employees are engaged under diverse arrangements.