Supreme Court Upholds Employer Liability for Workers' Compensation Delays

The Supreme Court ruled that employers are liable for penalties related to delays in compensation under the Employees' Compensation Act, 1923. This reinforces the law's role as a social welfare statute. The decision came following an insurance firm's challenge to a Delhi High Court order concerning an employer's compensation delay.

In a significant ruling, the Supreme Court has clarified the liability under the Employees' Compensation Act, 1923, holding employers accountable for delays in compensation payments. This decision emphasizes the act's purpose as a social welfare statute focused on swiftly addressing employees' grievances.

The case arose when a commercial driver died in an accident during employment in 2017, prompting his heirs to file for compensation. The Delhi government's labour department commissioner had ruled in favour of the heirs, fixing the compensation at Rs 7,36,680 with interest, compelling the employer to indemnify the amount through its insurance firm.

The Supreme Court's decision overruled the Delhi High Court by affirming that the onus of a 35% penalty for delays rests with the employer. This reiterates legislative intent and upholds the responsibility of employers under the amended Workmen's Compensation Act of 1995.