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Section 74: Amount of compensation

The Code on Social Security, 2020 (Act No. 36 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter VII: Employee's Compensation
Competent Labour Forum
Act No. 36 of 2020
Section 73 All 163 Sections of Code on Social Security, 2020 Section 75

Legal Commentary & Landmark Judgments: Section 74

Section 74 of the Code prescribes the statutory method for determining the amount of compensation under Chapter VII (Employees' Compensation) in cases of fatal accidents, permanent total disablement, and permanent partial disablement.

  • Statutory Multiplier Formula for Fatal Compensation: Calculates compensation in fatal accident cases at fifty percent of the monthly wages multiplied by the age-based relevant factor prescribed in the Fourth Schedule, subject to a statutory minimum floor.
  • Enhanced Multiplier for Permanent Total Disablement: Calculates permanent total disablement compensation at sixty percent of the monthly wages multiplied by the relevant factor, ensuring lifelong financial support for incapacitated workers.
  • Proportionate Compensation for Partial Disablement: Determines compensation for permanent partial disablement by applying the percentage of loss of earning capacity certified by a medical practitioner to the total disablement amount.
Key Landmark Precedents:
  • K. Sivaraman v. P. Sathishkumar (2020) 4 SCC 594: Supreme Court held that compensation under the Employees' Compensation Act must be computed based on the statutory formula and relevant factors applicable on the date of the accident, not the date of adjudication.
  • National Insurance Co. Ltd. v. Mubasir Ahmed (2007) 2 SCC 349: Supreme Court clarified that compensation falls due on the date of the accident and liability to pay interest arises from the expiry of one month from the date of the accident.
  • Oriental Insurance Co. Ltd. v. Siby George (2012) 12 SCC 540: Three-Judge Bench reaffirmed that employer liability to pay compensation and statutory interest accrues from the date of the accident, not the commissioner's final award.
Courtroom Practice & Strategic Litigation Guidance:

Upon occurrence of a fatal industrial accident, immediately compute the compensation using the Fourth Schedule age factor and last-drawn wage ceiling, depositing the amount with the Competent Authority within thirty days to pre-empt statutory interest and 50% penalty proceedings.

Section 73 All 163 Sections of Code on Social Security, 2020 Section 75