Labour Ministry Notifies Draft Rules For Compensation Under Code On Social Security


The labour ministry has notified draft Rules for providing compensation to workers under the Code on Social Security, 2020, a move aimed at ensuring payments are made within 30 days to the workers or to their families in case of death or disability.

In case the payments are delayed, the employer will be liable to pay interest at the rate of 12% per annum from the due date till the time the compensation is made, it said.

The proposed draft Rules will supercede the Employee’s Compensation Rules, 1924, the Employee’s Compensation (Transfer of Money) Rules, 1935 and the Employee’s Compensation (Venue of Proceedings) Rules, 1996 under the erstwhile Employee’s Compensation Act, 1923. The Act has been repealed by section 164 of the said Code on Social Security, 2020 passed by the Parliament in September 2020.

The labour ministry has sought comments from the stakeholders on the proposed draft Rules within 45 days following which it will be notified and become effective.

While the Centre is yet to notify the date of implementation of the Code on Social Security, 2020, it plans to notify and implement the compensation provision in the Code even before the Code to avoid any legal disputes arising over compensation to India workers, either working domestically or overseas, in case of loss of life due to the pandemic.

“If the amount of compensation payable under sub-section (3) of section 77 is not paid by the employer within the period of thirty days, the employer shall pay, from the date on which the compensation become payable to the date on which it is paid, simple interest at the rate of 12% per annum or any other rate notified by the Central Government from time to time,” labour ministry said in a draft notification.

Further, it has also notified Rules to give effect to arrangements with other countries for the transfer of money paid as compensation under section 159 of the Code.

“When any sum is transmitted by any authority in India to any other authority in accordance with these rules, the costs of such transmission may be deducted from the sum so transmitted,” it said, adding that such money shall be transmitted by remittance transfer receipt or by money order.

The ministry further said when the whole or any part of a lump sum deposited with a competent authority for payment as compensation under the Code is payable to any person or persons residing or about to reside in any other country, the competent authority may order the transfer to that country of the sum so payable.

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