EPFO APFC 2023 General Studies · Question 29 of 120

Correct — A, (a) ₹ 14,38,200. The governing provision is Section 4(1)(b) of the Employees' Compensation Act, 1923: where permanent total disablement results from the injury, the compensation is an amount equal to sixty per cent of the monthly wages of the injured employee multiplied by the relevant factor, or one lakh forty thousand rupees, whichever is more. Three quantities go into that formula and the question supplies two of them, but it deliberately does not supply the third, which is where the mark is won or lost. The monthly wages that enter the calculation are not necessarily the wages the employee actually drew. Explanation II to Section 4(1) caps them: where the monthly wages exceed the amount notified by the Central Government, the wages are deemed to be that notified amount, and the figure in force is ₹15,000 a month, raised from the earlier ₹8,000 by a notification of January 2020. So a worker drawing ₹22,500 is compensated as though he drew ₹15,000. The arithmetic then runs: sixty per cent of ₹15,000 is ₹9,000; ₹9,000 multiplied by the relevant factor of 159·80 gives ₹14,38,200; and since that far exceeds the statutory floor of ₹1,40,000, it is the amount payable. The relevant factor itself is read from Schedule IV against the employee's completed years of age on his last birthday before the accident — younger workers carry higher factors, because the award is meant to stand in for a longer stream of lost earnings — and the paper hands it to you so that no table is needed. Note how the option set is built: every one of the four values is the product of the same factor with a different wage base, so the entire question is a test of whether you applied the ceiling and the percentage correctly. The booklet prints the factor with a raised middle dot, as 159·80, which is this paper's convention for a decimal point throughout.

• (b)₹ 23,97,000 — ₹ 23,97,000 is exactly ₹15,000 multiplied by 159·80. It is the answer of a candidate who remembered the wage ceiling — the harder half of the problem — and then forgot the percentage, multiplying the capped wage by the factor without first taking sixty per cent of it. The Act never awards the whole of the monthly wage multiplied by the factor: the percentage is the statute's way of expressing the share of earnings the scheme replaces, and it differs by contingency, being sixty per cent for permanent total disablement under Section 4(1)(b) and fifty per cent for death under Section 4(1)(a). Losing the percentage inflates the award by two-thirds, which is why this is the largest number on offer.
• (c)₹ 21,57,300 — ₹ 21,57,300 is sixty per cent of ₹22,500 multiplied by 159·80, that is, the correct formula applied to the wages the employee actually drew. It is the natural answer for a candidate who has learned Section 4(1)(b) but not Explanation II, and it is the option the question is really aimed at: the stem prints the actual monthly wages precisely so that this number is available. The ceiling exists because the Act is a social insurance measure with a defined liability rather than a damages action, and it is revised by notification from time to time — ₹8,000 from 2010, ₹15,000 since January 2020 — so the figure has to be carried in memory as a current number, not derived.
• (d)₹ 7,67,040 — ₹ 7,67,040 is sixty per cent of ₹8,000 multiplied by 159·80 — the correct method worked with the superseded wage ceiling. This is the trap for the well-prepared candidate whose notes are out of date, and it is a useful warning about how labour-law numbers behave: several of the most examinable figures in these statutes sit in notifications rather than in the bare text, and they move. The wage ceiling under Explanation II to Section 4(1) went from ₹8,000 to ₹15,000 with effect from January 2020, so any calculation done on the older figure yields a little over half the correct award.

Compensation under the Employees' Compensation Act, 1923 is computed, not litigated. Section 3 fixes liability on a no-fault basis for personal injury caused by an accident arising out of and in the course of employment, and Section 4 then converts that liability into a number through a single formula: a percentage of monthly wages, multiplied by a relevant factor taken from Schedule IV against the employee's age, subject to a statutory minimum, with the wages themselves capped at a notified ceiling. The percentages are fifty per cent where death results and sixty per cent for permanent total disablement, with minimums of ₹1,20,000 and ₹1,40,000 respectively. Permanent partial disablement is dealt with proportionately: for an injury specified in Part II of Schedule I the compensation is the percentage of loss of earning capacity given there applied to what would have been payable for permanent total disablement, and for an unspecified injury it is the percentage of loss of earning capacity permanently caused by the injury as assessed by a qualified medical practitioner. Temporary disablement attracts a half-monthly payment. Section 4(2A) requires reimbursement of the actual medical expenditure incurred for treatment of injuries caused during the course of employment, and Section 4(4) provides for funeral expenses where death results. The design is deliberate: a formula produces a predictable award quickly, which suits a beneficial statute, at the price of ignoring the individual's true loss above the ceiling.

Calculation items are a distinctive feature of the APFC paper's labour block, and they are the closest the paper comes to the work of the post itself, where an officer must be able to produce the right figure from the right provision rather than describe the law in general terms. Two features of this item are worth carrying forward. First, the stem supplies the relevant factor in a bracketed hint, so the question is not about Schedule IV at all — the examiner has removed the part you could not be expected to memorise and kept the parts you should know, namely the percentage and the ceiling. Second, the four options are not scattered values but four different mistakes, each internally consistent, so an approximate answer is worth nothing: 'about fourteen lakh' identifies the right option only because the correct calculation lands exactly on it. The lesson for preparation is that the two numbers you must carry — the sixty per cent and the ₹15,000 ceiling — are more valuable than any amount of general familiarity with the Act, and that the ceiling in particular must be refreshed against the current notification because a stale figure is manufactured into a distractor here.

• Section 4(1)(b) of the Employees' Compensation Act, 1923 fixes compensation for permanent total disablement at sixty per cent of the monthly wages multiplied by the relevant factor, or ₹1,40,000, whichever is more; for death, Section 4(1)(a) uses fifty per cent and a floor of ₹1,20,000.
• Explanation II to Section 4(1) caps the monthly wages used in the calculation at the amount notified by the Central Government, which is ₹15,000 a month, raised from the earlier ₹8,000 by a notification of January 2020, so wages actually drawn above that figure are ignored in the computation.
• On the figures in this question the award is sixty per cent of ₹15,000, that is ₹9,000, multiplied by the relevant factor of 159·80, giving ₹14,38,200, which exceeds the statutory minimum of ₹1,40,000 and is therefore the amount payable.
• The relevant factor comes from Schedule IV and is read against the employee's completed years of age on his last birthday preceding the date of the accident; the younger the employee, the higher the factor, because the award substitutes for a longer stream of lost earnings.
• Section 4(2A) requires reimbursement of the actual medical expenditure incurred for treatment of injuries caused during the course of employment, and Section 4(4) provides for funeral expenses where the injury results in death.

• Multiplying the wages the employee actually drew instead of the capped wages; Explanation II to Section 4(1) deems monthly wages above the notified ceiling to be that ceiling, and the stem prints the higher figure precisely to invite the error
• Dropping the percentage and multiplying the whole monthly wage by the relevant factor, which inflates a permanent-total-disablement award by two-thirds
• Working with a stale ceiling: the ₹8,000 figure was replaced by ₹15,000 in January 2020, and the old figure appears as a fully worked option in this very question
• Forgetting to compare the computed amount with the statutory minimum of ₹1,40,000; the comparison does not change the answer when wages are high, but it decides the award for a low-wage employee with a small factor

The labour block of this paper reliably carries at least one worked-calculation item, and the Employees' Compensation Act is its favourite source because Section 4 is a formula with exactly the right number of moving parts. Expect the stem to supply the relevant factor and the monthly wages, and expect the options to be that same factor multiplied by four different bases so that the arithmetic alone cannot discriminate. The related variants ask for the death award at fifty per cent, for the minimum payable where the computed figure is small, or for the amount of funeral expenses, all of which come from the same section.

No directly related past PYQ was found.

• practice — not a real PYQ

  Under Section 4 of the Employees' Compensation Act, 1923, compensation payable where death results from the injury is an amount equal to what percentage of the monthly wages multiplied by the relevant factor?

  • (a)Forty per cent
  • (b)Fifty per cent
  • (c)Sixty per cent
  • (d)Seventy-five per cent

  Answer(b) Fifty per cent — Section 4(1)(a) fixes the death award at fifty per cent of the monthly wages multiplied by the relevant factor, or one lakh twenty thousand rupees, whichever is more, while Section 4(1)(b) uses sixty per cent and a floor of one lakh forty thousand rupees for permanent total disablement. Both calculations use monthly wages capped at the ceiling notified under Explanation II to Section 4(1).

• practice — not a real PYQ

  For the purpose of computing compensation under Section 4 of the Employees' Compensation Act, 1923, the monthly wages of an employee are deemed not to exceed

  • (a)₹8,000
  • (b)₹15,000
  • (c)₹21,000
  • (d)₹25,000

  Answer(b) ₹15,000 — Explanation II to Section 4(1) provides that where the monthly wages exceed the amount notified by the Central Government, the wages are deemed to be that amount, and the notified figure is ₹15,000 a month, raised from ₹8,000 with effect from January 2020. The ₹21,000 figure belongs to the wage ceiling for coverage under the Employees' State Insurance Act and is a common cross-statute confusion.