Section 4 of ECA : Section 4: Amount Of Compensation

Explanation using Example

Imagine an employee, John, who works in a factory and earns a monthly wage of 10,000 rupees. Unfortunately, John suffers an accident at work that leads to his death. According to Section 4 of The Employees Compensation Act, 1923:

• John's employer is required to pay compensation for his death. The amount would be either fifty percent of John's monthly wages multiplied by a relevant factor (as specified in Schedule IV of the Act) or one lakh and twenty thousand rupees, whichever is more.
• For example, if the relevant factor for John's age is 198.0 (assuming he is 30 years old), the compensation calculation would be 50% of 10,000 rupees multiplied by 198.0, which equals 990,000 rupees. Since this amount is more than one lakh and twenty thousand rupees, John's family would be entitled to receive 990,000 rupees as compensation.
• In addition to the compensation, John's employer must also deposit 2,500 rupees with the Commissioner for the funeral expenses, provided there is an eldest surviving dependent or someone who has incurred the funeral expenses.

This section ensures that John's family is financially supported after his tragic death due to a workplace accident.