Workmen’s Compensation

Workmen's Compensation in Sri Lanka: The Workmen’s Compensation Ordinance of 1935 and subsequent Amendments is to provide for the payment of compensation to workers who are injured in the course of their employment by an accident arising out of the and during the course of their work.

The Workmen’s Compensation Ordinance of 1935 and subsequent Amendments is to provide for the payment of compensation to workers who are injured in the course of their employment by an accident arising out of the and during the course of their work.

Who is entitled to claim compensation under the Workmen’s Compensation Ordinance?

A workman is defined as “any person who has entered into or works under a contract with an employer for the purposes of his trade or business in any capacity, whether the contract is specified in writing or on an oral agreement, or whether it is a contract of service or apprenticeship or contracted personally to execute any work or labour”.

The payment is calculated by time done, or work done or otherwise. The Ordinance considers ‘period of service’ as a continuous period which has not been interrupted by a period of absence from work not exceeding fourteen days

The law applies to

  1. Government Department and local bodies.
  2. in the case of workmen who are masters of registered ships or seamen subject to certain modifications detailed in Section 25 (As per Part IV of the Ordiance)

However, persons working as members of the Armed Forces of Sri Lanka, other than those persons employed in a civilian capacity in those Forces, and members of the Police Force are not included under this Ordinance.

When can a worker claim Compensation?

If any worker contracts a disease that could be reasonably attributed to the type of work he/she is doing while employed in any process or contracts an occupational disease as described in Schedule III, such as Anthrax infection, poisoning by lead, nitrous fumes etc., (please see Schedule III for the entire list), then the compensation can be claimed under the terms of this Ordinance.

Is anyone else entitled to claim worker’s compensation?

The Ordinance also provides for compensation to be paid to the dependants of the worker, in the event of his/her demise as a result of a work related accident or occupational disease.

What is the amount of compensation that can be expected?

Part III of this Ordinance addresses the compensation payable in detail. The amount of compensation payable for injuries sustained to a worker is listed in the relevant Schedules under this Ordinance.

  • Schedule I - addresses permanent partial disablement as a result from injury. Where the injury is not listed therein compensation will be computed proportionately with the loss of earning capacity.
    In the event multiple injuries are caused by the same accident, the amount of compensation will be an aggregated amount, but it will not exceed the amount payable if permanent total disablement had been the result.
  • Schedule IV - addresses instances where death results from the injury and the worker was in receipt of monthly wages. It also addresses compensation for permanent total disablement as a result of the injury sustained. The maximum payable is Rs.550,000/- in the case of death or permanent disablement.

What is the process for the payment, distribution and recovery of compensation?

Under Section 11(1) the Ordinance stipulates that

  1. no payment of compensation in respect of a worker whose injury has resulted in death and no payment of a lump sum as compensation to a woman or person under legal disability (age of 18 years) can be made directly by the employer to the dependants other than by depositing the sum with the Commissioner.
  2. Any payments made directly to the dependants will not be deemed to be a payment of compensation.
  3. Upon deposit of the compensation sum with the Commissioner, the Commissioner will deduct the actual cost of the worker’s funeral expenses depending on the compensation payment.

As per Section 16 (1)

  1. all proceedings for recovery of compensation can be brought before the Commissioner, after notice of accident has been given in the manner detailed in the Ordinance.
  2. Such notice must be given as soon as is practicable and before the worker has voluntarily left the employment in which he was injured.
  3. The claim for compensation must be made within two years of the occurrence of the accident and in the case of death, within two years from the date of death.
  4. In the case of contracting a disease as a result of an accident, then the accident will deemed to have happened on the first day from which the worker was continuously absent from work.

Section 16 (2) states that

    1. the Commissioner may admit and decide upon a claim to compensation in the event notice required by the Ordinance has not been given or if the claim was not instituted within the stipulated timeframe, if he is satisfied that the failure to give notice or institute a claim was due to sufficient cause.

According to Section 20:

  1. In the event a Commissioner receives information that a worker’s death has been the result of an accident arising out of his/ her employment, the Commissioner is empowered to send a notice by registered post to the employer requiring the latter to submit within thirty days, a statement in the manner prescribed under the Ordinance.
  2. This information should contain the circumstances of the death of the worker and indicating whether in the opinion of the employer, he is or not liable to deposit compensation on account of the worker’s death.
  3. The employer is obligated by law, unless he disclaims liability to deposit compensation on any ground other than there are no dependants of the deceased worker, to make the deposit of compensation within thirty days after the notice was served.
  4. If the employer opines that he is not liable, then he must submit a statement indicating reasons for disclaiming liability. The Commissioner after an inquiry as he may deem fit, inform the dependents of the deceased worker, that it is open for them to prefer a claim for compensation and may give them further information as he thinks fit.
  5. If the employer fails to pay compensation awarded within a period of thirty days, then he is liable to a surcharge of ten percent of the amount awarded.

As per Section 21:

  1. where a worker has given notice of an accident, a worker must submit himself to a medical examination if the employer offers free medical examination.
  2. This must occur before the expiry of three days from the time of service of the notice of accident.
  3. If the worker accepts such offer but deliberately disregards the instruction of the registered medical practitioner or if the worker refuses to accept such offer and thereafter either fails to take treatment regularly and if the injury is aggravated as a result of deliberate disregard of medical advice, then compensation if any shall be payable accordingly.

What is the process that workers need to follow in order to claim compensation?

Form ‘A’ titled Application for Compensation by Workmen must be duly filled in, giving name and address etc. of the applicant, date of accident, cause of injury, type(s) of injury, monthly wages of worker, date on which notice of accident was served on employer, etc.

The worker in his/her application requests the Commissioner to determine whether he/she is considered a worker within the terms of the Ordinance, whether the accident arose out of or in the course of the applicant’s employment, whether the amount of compensation claimed or any smaller amount is due and whether the respondent is liable to pay such compensation as may be due, etc.

How does the Ordinance define an employer?

An employer includes the Republic of Sri Lanka and any body of persons whether corporate or unincorporated and any managing agent of any employer and the heirs, executors or administrators of a deceased employer and, when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him.

Are there any limitations on the liability of the employer provided for under this Ordinance?

Under Section 3, an employer is liable to pay compensation to a workman for any injury caused due to an accident arising out of the course of his work, or as stated above if the workman contracts any occupational disease as a result of the type and nature of the work done.

However, under the same section 3 (a), the liability of the employer does not extend to personal injury that does not result in the total or partial disablement of the worker for a period of three days. Similarly under (b) of the same Section, the Ordinance states that in respect of an injury not resulting in death caused by an accident directly attributable to negligence on the part of the worker, the employer is not liable to pay compensation. Negligence is defined as: if the worker had been at the time of the accident been under the influence of alcohol or drugs, if the worker willfully disobeyed an order expressly given or framed for the purpose of securing the safety of the workers, or the willful removal or disregard by the worker of any safeguards or safety devices which he/she was aware were provided for securing his/her safety.

The employer is not liable to pay compensation to a worker in respect of any disease unless the disease can be directly attributable to a specific injury by accident as a result of his/ her employment or if the disease is reasonably attributable to the nature of his/ her employment.

Who is responsible for administering the Workmen’s Compensation Ordinance?

The administering authority of this Ordinance lies with the Commissioner for Workmen’s Compensation who along with Deputy Commissioners is appointed by the Judicial Service Commission. The Commissioner has the same jurisdiction as that of a civil court.