“Workmen/Employees Compensation Act is not applicable in case of employment under MNREGA” - HC
Recently, the Himachal Pradesh High Court ruled that persons engaged under MNREGA cannot be considered in the employment of the State for claiming rights under the Workmen/Employees Compensation Act.
The High Court also clarified that once it is clear that MNREGA worker is not covered under the definition of Employees’ Compensation Act/WC Act, there is no right to claim compensation under WC Act for death of a person employed under MNREGA/Scheme under MNREGA even if the said death has occurred during the course of employment.
Facts of the case:
On February 7, 2009, Ramesh Chand, a labourer under the MNREGA scheme, died after a boulder struck his chest while on duty. His legal heirs sought compensation, interest, and a 50% penalty under the Workmen Compensation Act, 1923 (hereinafter referred to as “WC Act”), claiming he was a workman and the accident occurred during employment. The respondents denied the employer-employee relationship, stating that he was casually engaged by the Gram Panchayat and had already been compensated with ₹25,000. The Commissioner rejected the claim, holding that the deceased was not proven to be a workman. The appellants then approached the High Court.
Submissions of the Appellant:
The counsel for the appellants submitted that the Government of India has formulated and circulated the Guidelines for the mechanism, to provide ex-gratia payment to eligible e-Shram registrants by launching the e-Shram portal on 26th August, 2021, for the creation of a comprehensive ‘National Database of Unorganized Workers’ seeded with Aadhaar. As per eligibility criteria, those unorganized workers will be eligible to initiate a claim, who were registered on the e-Shram portal on or before 31st March, 2022, and are covered within the definition as mentioned in Guidelines.
Referring to the Guidelines, the counsel submitted that the deceased was also an unorganized labourer and, therefore, on account of his death, during the course of employment, the appellants must be provided financial help/ex-gratia grant.
Submissions of the Respondent:
The counsel for respondents submitted that all unorganized workers, who were registered on e-Shram on or before 31st March, 2022, will be eligible to initiate a claim for payment of ex-gratia/compensation, and deceased was not so registered. Referring to the case of Rirasatnai Halam vs. State of Tripura (2018), has submitted that deceased was not workman/employee within the meaning of Section 2(dd) of the Employees’ Compensation Act, 1923 and therefore, appellants are not entitled for any compensation under WC Act/Employees’ Compensation Act.
Observations of the Court:
The Court observed that MNREGA was enacted to provide the enhancement of livelihood security of the households in rural areas of country by providing at least 100 days of guaranteed wage employment in every financial year to every household whose adult members volunteer to do unskilled manual work and for matters connected therewith or incidental thereto.
Within the said entitlement, all adult members of household can register and apply for work, provided that they are local residents and willing to manual work, and they may apply as an undivided or a household to the Gram Panchayat at village level, added the Court.
Observing that this Scheme notified under MNREGA provided for 100 days guaranteed employment/wages for the household or individual registered under the Act/Scheme and 100 days entitlement of household may be shared amongst the members of that household, the Court emphasized that this scheme is not an employment to a particular person but is a Scheme to provide work for 100 days in a financial year to the household.
At the same time, while explaining that though Section 28 of the MNREGA and Schemes originated therefrom, shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force, the Court clarified that the Scheme has rendered the definition of workman or employer and employees or other provisions of Workmen/Employees Compensation Act redundant.
The Court noted that Clause 12 of the Rural Employment Guarantee Scheme 2006, which was formulated under Section 4(1) of MNREGA by the Himachal Pradesh Government, provides entitlement to receive payment of compensation as per provisions of the Payment of Wages Act 1936 for non-payment of wages.
This Clause explicitly excluded applicability of the Workmen/Employees Compensation Act in case of employment under MNREGA and/or the Scheme framed thereunder, added the Court.
Finding that the deceased was not registered on e-Shram portal and there was no such scheme to provide ex-gratia payment to unorganized workers under Pradhan Mantri Suraksha Bima Yojana (PMSBY) or any other scheme at the time of his employment and death, the Court concluded that benefit under WC Act cannot be granted to the appellants.
The decision of the Court:
In view of discussion that Workmen/Employees Compensation Act is not applicable in case of employment under MNREGA, the Court dismissed the appeals.
Case Title: Geeta Devi and Ors. vs Deputy Commissioner, Shimla & Another
Case Number: FAO No. 07 of 2014
Coram: Hon’ble Justice Vivek Singh Thakur
Counsel for the Appellant: Senior Advocate Balbir Singh Chauhan and Advocate Abhishek Thakur
Counsel for the Respondent: Advocate Seema Sharma
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