Compensating workers

Almost all factory workers expose themselves to the hazards of machinery and other equipment required for the smooth operation of several manufacturing units.

With the Industrial Revolution in Britain in the 18th century, there was an increase in incidents of on-the-job accidents. Mechanically operated machinery such as the spinning jenny, cotton gin, steam engine and power loom expedited the manufacturing process of goods. In their craze to amass wealth, factory owners did not bother to make workplaces safer for those involved in producing the cloth.

The earliest Factories Act, primarily enacted in the UK for cotton factories in 1802 and 1819 respectively, prescribed working hours for children – 12 hours work per day for children aged 9–16 years. The act had provisions for the health and education of apprentices, but there were no sufficient regulations for the safety of workers.

In 1844, the British parliament passed another Factories Act, which, in effect, was the first health and safety act in Britain. All dangerous machinery was to be securely fenced off, and failure to do so, was regarded as a criminal offense. The commercial distribution of electric power started in 1882 when electricity was produced for electric lighting. Many entrepreneurs started switching over their factories’ manual or mechanical operations to electric processes, which improved both the quality and quantity of products. Due to an increase in hazards of industrial jobs, the use of electric power imposed a greater responsibility upon employers to adopt effective safety measures for their workers.

The evolution of social security legislation in the Subcontinent has been rather slow, sporadic, and on a selective basis. Although the need for protecting workers against even the common hazards of life such as injury, sickness, maternity and old age was realised soon after the wave of industrialisation in the country, no concrete measures were adopted for a long time.

After the First World War, the pace of industrialisation was accelerated, and many wage earners were employed in various industrial undertakings. The increasing hazards of industrial life led to dissatisfaction among the working class, which wanted protection against at least certain contingencies such as injuries and death.

By that time, workers had realised the utility of forming trade unions and resorting to concerted action for protecting their legitimate interests. Besides, the International Labour Organisation, which came into existence in 1919, also emphasised the need of protecting workers against hazards of industrial life. It was under these conditions that the question of workers’ safety received the attention of the government.

The first step, in this regard, was taken in 1923 when the Workmen’s Compensation Act was passed, which made an employer liable to pay compensation for industrial injuries and death. The act was patterned after the 1897 British Workmen’s Compensation Act. It added that an employer shall be liable to pay compensation if personal injury is caused by an accident arising out of and in the course of a worker’s employment.

It is mandatory for employers to pay compensation in the case of on-the-job injuries or death caused to their workers. In a majority of countries including Pakistan, compulsory insurance by employers has also been provided for off-the-job injury or death caused to a worker. In such eventuality, the same amount of compensation is payable to a worker or his/her legal heirs, as under the 1923 Act.

The law always keeps going through an evolutionary process. It develops and sometimes even supersedes the existing laws based on the changed circumstances and social needs. Covid–19 has also resulted in the introduction of case law, which one could not have visualised before the pandemic.

Recently, Germany’s federal social court ruled that even if an employee is working from home, s/he can claim ‘workplace accident’ insurance. This judgment came in the wake of an ongoing case where a man who was working from home slipped and broke his back when he was on his way to the ‘work desk’. The court held that he was technically commuting.

In Pakistan, a lot needs to be done with regard to workers’ compensation. Khyber Pakhtunkhwa, Punjab and Sindh pay Rs300,000, Rs400,000 and Rs500,000 respectively in the case of death or permanent total disablement of a worker. These amounts – especially in KP and Punjab – are quite low and need to be raised to one million rupees.

Sindh also gives Rs500,000 as a death grant under the Sindh Workers’ Welfare Fund Act, 2014. But since this fund has been constituted under a different law, the eligibility of workers under the 2014 Act to receive the additional amount of Rs500,000 is determined using different parametres. Therefore, Sindh, too, should raise the amount to one million rupees, which should be independent of the grant from the welfare fund.

The writer is a consultant in employee relations at the Aga Khan University Hospital. He can be reached at: parvez.rahim1947@gmail.com