A Critical Analysis of Workmen’s Compensation Law in Sri Lanka : inadequacy of Sri Lankan workers’ compensation law

1. A Critical Analysis of Workmen’s Compensation Law in
Sri Lanka : inadequacy of Sri Lankan workers’
compensation law
Under the theme of
The Evolution and nature of the labour sector in Sri Lanka “Past , Present and Future”
A/12/LLB/025
Labour Law
Law 412

2. Workmen's Compensation Law In Sri Lanka
 Workers’ compensation law is a system of rules in every state for providing the
payment of compensation to employees who are harmed while performing their job-
related duties.
 The WCO was created and modeled on British Columbia’s Workmen’s Compensation Act of 1920
which established a similar system in the Canadian province.
 Before introduce this ordinance ,injured workers or their dependent survivors obtain
compensation by suing their employers in the courts.
 The WCO provided workers an easier and more automatic mechanism for obtaining
compensation.
 Now, The Workmen's Compensation Law in Sri Lanka is governed under The Workmen’s
Compensation Ordinance No.19 of 1934 and subsequent Amendments.
Amendments :
 No.31 0f 1957 ,
 No.22 of 1959,
 No.04 of 1966 ,
 No.15 of 1990 and
 No.10 of 2005.

3.  Since No.22 of 1959 amendment The administering authority of this Ordinance depend on
the Commissioner for Workmen’s Compensation and Deputy Commissioners is appointed
by the Judicial Service Commission. The Commissioner has the same jurisdiction as that of a
civil court.
 Circumstances of applying the Workmen’s compensation law
 To pay the compensation for workers who are injured in the course of their employment
by accident arising out of the and during the course of their work.
But, After the No.15 of 1990 amendment pay the compensations for the diseases which
are reasonably attributable to the nature of his employment .
 Under No.15 of 1990 amendment , If some employer do not pay the compensation within
30 days after ordered the compensation, that employer should pay 10% as fine
additionally to the prescribed compensation.

4. Covering area of this Act
 Before No.15 of 1990 Amendment, only permanent workers who are monthly get the wage
below Rs.500 were covered under this ordinance.
 But after that this limit was canceled and now a days, any person can get the
compensation who has entered into or works under a contract with an employer for the
purposes of his trade or business in any capacity, whether this contract can be 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.
Hence , All workmen, including government employees are covered under the Ordinance
Schedule II.
 But since No 15 of 1990 amendment ,the Ordinance following parties are excluded to
receive any compensation.
i. Armed Forces of Sri Lanka
ii. Members of the Police force of Sri Lanka
iii. Employees faced minor accidents that disable them up to a period of three (03) days only
iv. Employees faced with injuries, not resulting in deaths that are directly attributable to the
fault of employees
• a. under the influence of liquor or drugs
• b. Willful disobedience
• c. Willful removal of disregarding any safety guard or device

5.  In accident injuries ,Compensation is calculated according to the wage class of the employee
and the degree of the disablement he has suffered . According to No.15 of 1990
amendment part III the results of this accident should be
• Death
• Permanent total disablement
• Permanent partial disablement
• Temporary disablement
 The amount of compensation is differed according to each category of disablement.
 Also the compensation is provided for certain Occupational Diseases through the No.13 of
1957 amendment, further added new diseases through the 1990 amendments which are
reasonably attributable diseases result of nature of his employment in Schedule III mention
, such as Anthrax infection, poisoning by lead, nitrous fumes etc.
 Under s.10 of the Ordinance, where the injured workmen died due to his/her injuries, both
partial and total dependents are eligible to receive compensation on behalf of the workman.
 However if the dependent dies before a claim or a reward under this Ordinance, the
deceased dependent’s heirs, executors or administrators have no right of compensation.The
maximum payable is Rs.550,000/- in the case of death or permanent disablement.

6. Case law
 The State Distilleries Corporation Vs Mary Nona
• The died person is lorry driver and lorry driving being strenuous work causes tension and
long hours of driving can cause heart disease.
• But that person died even without being engaged on such work .
• According to the medical evidences was proved , the workman’s death was therefore due
to an "accident” within meaning of section 3 of the Ordinance arising -out of ” his
employment.
 Alice Nona Vs Wickremesinghe
• According to this case decision the death was caused by an accident arising out of and
during the course of employment within the meaning of section 3 of the Workmen’s
Compensation Ordinance, No. 19 of 1934.
 Kelaart Vs Piyadasa 44 NLR 485
• In this case employee slipped down and faced to some of accident . But this accident
occurred before he resumed the employment , hence the decision was this employee not
liable for the compensation.

7.  Psychological Injuries…… ?
 According to this Act, all these occupational diseases and accidents are focused
about the Physical Disablement of the workmen. But legislator did not concern
about the psychological injuries.
 It can be argued that ordinance was drafted back in 1930’s and that time , drafted
back in 1930’s and that time there was no need for the consideration of
psychological injury because the industries were not more develop and simply.
 Psychological injuries occurred from occupational stress and serious traumas of
nature of employment
 The main reason is psychological injuries are largely undervalued and
underestimated is the lack of physical symptoms or visible impact on the injured
Employees.
 According to the this new trend , measurement was introduced for determining
the psychological injury which is called Psychological Injury Risk Indicator (PIRI).

8.  The current WCO legislation suffers from several major weakness with respect to
ILO Convention standards of C121 and C17
The Employment Injury Benefits Convention, 1964 (No 121).
The Workmen's Compensation (Accidents) Convention, 1925 (No. 17).
 Lack of periodic payments of compensation for permanent and fatal workers.
• In the C121 specifically states , all compensation regarding permanent disabilities
and fatal accidents should be payable periodically.
But In Sri Lanka ,compensation is usually paid in one-off lump sum
• According to the convention guidelines the compensation could be paid in a lump sum way,
only if the authorities are convinced , the beneficiaries will use the money in a proper
manner.
 The wage replacement rate for temporary disability is set at 50% compared with the
convention standard of 60%.
• The Employment Injury Benefits Convention (C121) of 1964 directly relates with the
provision of benefits to employees injured cause of industrial accident‖.
• According to the Schedule II of C121, the minimum rate of wage replacement for
temporary disability is 60%. But under the WCO, this is set at approximately 50% of wage up
to a monthly wage level of Rs. 22,000. Above this level the rate of compensation is capped at
Rs. 11,000 a month, implying that the workers with higher wages receive rates less than
50%.

9.  Benefits are not adjust with cost of living , as required by the convention
• According to Article 21 of C121 states should has a mechanism to adjust the benefits in
parallel with substantial changes in the cost of living of beneficiaries.
• But such mechanism does not have in WCO of Sri Lanka.
 Too low a ceiling set on all benefits.
• According to the C121 should not to restrict or reduce the ability of the beneficiary get
benefits to provide for his dependants.
• But in Sri lanka benefits are restricted, hence our compensation system have too low a
ceiling system . especially this incident is happened workers who are faced to permanent
disability or death.
Example
According to the Schedule IV of the WCO in
Sri Lanka
he has lump sum compensation of Rs 550,000.
Life time compensation under current WCO = Rs 550,000
• .
Worker has suffered a total
permanent disablement ,
monthly earn 18000%, 35 years
old , retire at age of 60

10.  Hence In Sri lanka is Concerned about only
Amount Wage of worker and degree of disablement he / she suffered
But
 In ILO convention , it consider the worker who has remaining years of his
employment since his accident and consider the retirement age of worker ,
Life time compensation under ILO = 18,000 × 12 months × 60% × 25
His remaining years of
employment ,it calculate with retirement
age
his compensation under ILO compliance would have been Rs 3,240,000
 After that , it concern about inflation situation of the country ,hence finally
compensation calculated with inflation ajustments .
Hence, our volume of compensation is too low and compensation do not sufficient with total
earning of worker

11. Relative value of Employment Injury compensation benefits awarded in
Sri Lanka compared to ILO standards and other countries
ILO convention
Sri Lanka

12.  Sri Lanka provides the lowest level of benefits to covered workers in the Asia-Pacific region.
 The current WCO fails to protect workers and their families against the grievous financial
costs of severe injury.
 Their families who suffer various hardships as a result of inadequate compensation.
 On the other hand there is only a single statute substantial in nature in Sri Lanka for
addressing all industrial accidents.
 Hence, As recommendations
 Compliance with ILO standards will require
• increases in the value of compensation
• introduction of periodic payments for permanent disability and death, and
• the introduction of a mechanism to adjust benefits according to inflation of country.
 Should be concerned the psychological injuries of the workers.
 Should established separate legal statues in Sri Lanka for addressing different kind of
industrial accidents.

13. • References
• Sunimalee,M. (2013.). Dying to work?: Why Health and Safety in the workplace is an important
economic issue for Sri Lanka. In Talking Economics. Colombo: Institute of Policy Studies.
• Thowfeek,R.,Siriwardena,I.,Jayanthan,J.,(2014).”In depth Assesment of Emploement injury
compensation arregements in Sri Lanka”.Institution for health policy.
• Enwards,K.,(2011).”Labor and Employment Law : A career Guide”. Bernard Kotten office of Public
interest advising Harvard law School.
• Central Bank of Sri Lanka.( 2012). “Central Bank of Sri Lanka Annual Report 2012”.Colombo,Sri
Lanka: Central Bank of Sri Lanka.
• Adikaram, A. S. (2008). “Labour Law and Relations: A human resource management approach”. Sri
Lanka:Stamford Lake.
• Barret, B., Rhodes, E., & Beishon, J. (1975). Industrial Relations and the Wider Society. London:
Collier Macmillan London Ltd.
• De Silva, S. (2004). The transformation of labor law and relations. Sri Lanka: Stamford Lake.
• Magnavita, N., Garbarino , S., & Winwood, P. C. (2015). Measuring Psychological Trauma in the
Workplace: Psychometric Properties of the Italian Version of the Psychological Injury Risk Indicator
A Cross-Sectional Study. The Scientific World Journal.

14. Thank you………………..