Under Section 3 of the Act, an employer is liable to pay compensation if personal injury is caused to an employee by accident arising out of and in the course of employment.
1. Core Liability Test
To establish liability, three primary elements must be proved:
- There must be a personal injury (physical or psychological).
- The injury must be caused by an accident (an unlooked-for mishap or untoward event).
- The accident must have arisen out of and in the course of employment (reflecting a causal connection between the work and the injury, during working hours).
2. Doctrine of Notional Extension
As a general rule, an employee's employment does not begin until they reach the place of work and ends when they leave it. However, the Doctrine of Notional Extension extends the concept of workplace in time and space:
The Supreme Court held that the employment of a workman does not strictly start only when they pick up their tools. If the employee is using transit provided by the employer or is traversing a path that is the only reasonable route of access to the workplace, the course of employment notionally extends to cover that period. If an accident occurs during this extended period, the employer is liable.
3. Employer's Statutory Defenses
Under Section 3(1), the employer is not liable in the following cases:
- If the injury does not result in total or partial disablement for a period exceeding 3 days.
- In case of non-fatal injuries caused by an accident which is directly attributable to:
- The employee being under the influence of drinks or drugs.
- The willful disobedience of the employee to an express safety rule or order.
- The willful removal or disregard of any safety guard or device provided for security.