Section 74: Employer’s liability for compensation

Finin2min analysis — what the section actually does

Full statutory text — Section 74

74. Employer’s liability for compensation.—(1) If personal injury is caused to an employee by
accident or an occupational disease listed in the Third Schedule arising out of and in the course of his
employment, his employer shall be liable to pay compensation in accordance with the provisions of this
Chapter:
    Provided that the employer shall not be so liable—
        (a) in respect of such injury which does not result in the total or partial disablement of the employee
    for a period exceeding three days; and
        (b) in respect of such injury, not resulting in death or permanent total disablement caused by an
    accident which is directly attributable to—
        (i) the employee having been at the time thereof under the influence of drink or drugs, or
        (ii) the wilful disobedience of the employee to an order expressly given, or to a rule expressly
    framed, for the purpose of securing the safety of employees, or
       (iii) the wilful removal or disregard by the employee of any safety guard or other device which he
    knew to have been provided for the purpose of securing the safety of employee.
    (2) An accident or an occupational disease referred to in sub-section (1) shall be deemed to arise out of
and in the course of an employee's employment notwithstanding that he is at the time of the accident or at
the time of contracting the occupational disease, referred to in that sub-section, acting in contravention of
the provisions of any law applicable to him, or of any orders given by or on behalf of his employer or that
he is acting without instructions from his employer, if—
         (a) such accident or contracting of such occupational disease would have been deemed so to have
    arisen had the act not been done in contravention as aforesaid or without instructions from his employer,
    as the case may be; and
        (b) the act is done for the purpose of, and in connection with, the employer's trade or business.
    (3) If an employee employed in any employment specified in the Second Schedule contracts any disease
specified in the Third Schedule, being an occupational disease peculiar to that employment whilst in the
service of an employer in whose service he has been employed for a continuous period of not less than six
months, then, such disease shall be deemed to be an injury by accident within the meaning of this section
and unless the contrary is proved, the accident shall be deemed to have arisen out of and in the course of
the employment.
    (4) An accident occurring to an employee while commuting from his residence to the place of
employment for duty or from the place of employment to his residence after performing duty, shall be
deemed to have arisen out of and in the course of employment if nexus between the circumstances, time
and place in which the accident occurred and his employment is established.
    (5) The Central Government or the State Government, after giving, by notification, not less than three
months' notice of its intention so to do, may, by a like notification, modify or add any description of
employment to the employments specified in the Second Schedule, and occupational diseases specified in
the Third Schedule and shall specify in the case of employments so modified or added, the diseases which
shall be deemed for the purposes of this section to be occupational diseases peculiar to those employments
respectively, and thereupon the provisions of sub-section (2) shall apply, in the case of a notification by the
Central Government, within the territories to which this Code extends or, in case of a notification by the
State Government, within that State as if such diseases had been declared by this Code to be occupational
diseases peculiar to those employments.

     (6) Save as provided by sub-sections (2), (3) and (4), no compensation shall be payable to an employee
in respect of any accident or disease unless the accident or disease is directly attributable to a specific injury
by accident or disease arising out of and in the course of his employment.
    (7) Nothing herein contained shall be deemed to confer any right to compensation on an employee in
respect of any accident or disease if he has instituted in a civil court a suit for damages in respect of the
accident or disease against the employer or any other person; and no suit for damages shall be maintainable
by an employee in any Court of law in respect of such accident or disease—
       (a) if he has instituted a claim to compensation in respect of the accident or disease before a
    competent authority; or
       (b) if an agreement has been made between the employee and his employer providing for the
    payment of compensation in respect of the accident or disease in accordance with the provisions of this
    Chapter.

How to apply this provision

1. Primary statutory test — (1) If personal injury is caused to an employee by accident or an occupational disease listed in the Third Schedule arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter:
2. Additional operative limb — Provided that the employer shall not be so liable— (a) in respect of such injury which does not result in the total or partial disablement of the employee for a period exceeding three days; and (b) in respect of such injury, not resulting in death or permanent total disablement caused by an accident which is directly attributable to— (i) the employee having been at the time thereof under the influence of drink or…
3. Qualification / exception to test — Provided that the employer shall not be so liable— (a) in respect of such injury which does not result in the total or partial disablement of the employee for a period exceeding three days; and (b) in respect of such injury, not resulting in death or permanent total disablement caused by an accident which is directly attributable to— (i) the employee…
4. Numerical or timing control — Provided that the employer shall not be so liable— (a) in respect of such injury which does not result in the total or partial disablement of the employee for a period exceeding three days; and (b) in respect of such injury, not resulting in death or permanent total disablement caused by an accident which is directly attributable to— (i) the employee…
5. Central Rule mapping — 63. Read the mapped provision together with this text rather than treating the concordance as a substitute for it.
6. Evidence file — retain facts and records proving the role/status of: Employer, Employee / worker, Central Government, State Government, Authority / officer.

Rules, forms and cross-references

A direct concordance is not exhaustive. Central/State jurisdiction, schemes, authority appointments, saved instruments and later notifications may change the practical route without changing the section wording.

Worked example

Q&A — Section 74

Source & verification trail