Ministry of Labour and Employment appoints 15th May, 2017 as the effective date for Employee’s Compensation (Amendment) Act, 2017
As you must be aware that the Ministry of Labour and Employment (“Ministry”) had issued the Employee’s Compensation (Amendment) Act, 2017 (“Amendment Act”) on 12th April, 2017 thereby amending the Employee’s Compensation Act, 1923(“Principal Act”).
Now, by virtue of the notification no. S.O. 1545(E), the Ministry has appointed 15th May, 2017 as the date on which the Amendment Act will come into force.
The key highlights of the amendment are:
- Employers require to inform employees of their rights in English/Hindi/Vernacular language
The Amendment Act has inserted a new provision Section 17A.
By virtue of the insertion, employers now are required to inform their employees of their rights to compensation under the Principal Act, in writing as well as through electronic means. This information must be made available in English, Hindi or in the official language of the area of employment, as may be understood by the employees.
Prior to this, the employers were not required to follow this obligation.
- Enhancement of penalty
The Amendment Act has increased the penalty for contravention of various compliances under the Principal Act.
As per the Amendment Act, in case of contravention of various provisions of the Principal Act such as failure to maintain notice-book, filing of annual return, etc. the defaulter will be punishable with fine of not less than fifty thousand rupees but which may extend to one lakh rupees.
Prior to this, in case of default, a maximum fine of five thousand rupees was imposed.
- Introduction of penalty in case of default to inform the employees about their rights under the Principal Act
The Amendment Act has introduced new penalty provision in the event of the default by employers to inform their employees of their rights to compensation under the Principal Act.
As per the new provision [i.e. Section 18A(1)(e)], in case of failure of the employer to inform the employees about their rights under the Principal Act, the employer will be punishable with fine of not less than fifty thousand rupees but which may extend to one lakh rupees.
The new sub provision (e) has been added to Section 18A(1) pursuance to the introduction of new provision Section 17A relating to duty of employer to inform employee of his rights.
Prior to this, this aspect was not covered by the Principal Act.