Employer's Liability to Pay Compensation and the Defences — Labour Law II Notes

Employer’s Liability to Pay Compensation and the Defences

A workman drank on the job, fell, and died. The employer said: “He was drunk — I owe nothing.” The law’s answer is more careful than that, and it is exactly what this topic tests. Drink is a defence only in a narrow way — and never where the worker dies.

When the employer is liable — and the four exceptions

The rule is in Section 74 of the Code on Social Security, 2020. The employer is liable to pay compensation if personal injury is caused to an employee by an accident arising out of and in the course of his employment. That is the whole trigger — no need to prove negligence.

But the same section lists the situations where the employer is not liable:

where the injury does not result in total or partial disablement for more than three days; and
where the injury (not resulting in death or permanent total disablement) is directly attributable to the employee having, at the time, been — (a) under the influence of drink or drugs; or (b) in wilful disobedience of an order expressly given, or a rule expressly framed, for the purpose of securing the safety of employees; or (c) in wilful removal or disregard of a safety guard or device he knew was provided for safety.

🔑 Notice the built-in limit: the drink/disobedience/safety-guard defences apply only where the injury did not cause death or permanent total disablement. So if the drunk worker dies, the defence is gone — the employer still pays. This is the single most-tested point in the unit.

Section 74(1), Code on Social Security 2020: “If personal injury is caused to an employee by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation … save as provided … [the exceptions above].”

In Simple Terms: The default is: accident at work → employer pays. The employer escapes only in the listed cases, and even then never when the worker is killed or permanently and totally disabled.

🧩 WORKED EXAMPLE — the drunk workman who died

Facts. A workman, on the employer’s duty, dies in an accident; it is proved he was under the influence of drink at the time.

Rule. Section 74 makes the employer liable for accidents arising out of and in the course of employment. The intoxication exception applies only where the injury did not cause death or permanent total disablement.

Apply. The accident happened on duty (in the course of employment). The worker died, so the drink exception cannot be used, even though he was drunk.

Decoy. “He was intoxicated” is planted to make you deny compensation — resist it; drink is irrelevant once death results.

Conclusion. The employer is liable to pay compensation to the dependants.

flowchart TD
    A["Accident arising out of & in course of employment"]:::root
    A --> B{"Did it cause death or permanent total disablement?"}:::q
    B -->|"Yes"| PAY["Employer LIABLE — defences barred"]:::pay
    B -->|"No"| C{"Was it caused by drink / wilful disobedience / removing a safety guard?"}:::q
    C -->|"Yes"| NO["Employer NOT liable"]:::no
    C -->|"No"| PAY
    classDef root fill:#FFF8DC,stroke:#000,stroke-width:1px,color:#000;
    classDef q fill:#FFF0D0,stroke:#8a5a00,color:#000;
    classDef pay fill:#E7F6E7,stroke:#217a21,color:#000;
    classDef no fill:#FBE3E3,stroke:#a11,color:#000;
    linkStyle default stroke:#888,stroke-width:1px;

Case Laws

Mackinnon Mackenzie & Co. v Ibrahim Mahmmed Issak (1969) — once the accident and its connection with employment are shown, the burden shifts; the workman need not prove the exact cause.
Jyothi Ademma v Plant Engineer, Nellore (2006) — where the stress and strain of the work materially contribute to a heart attack on duty, the death can be held to arise out of employment on the facts.

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