Write a detailed note on Method Of Calculating Wages and Commutation Of Half-Monthly Payments

(1) Method Of Calculating Wages

In Workmen’s Compensation Act, following methods have been provided for calculation of wages:

(i) One twelfth of total wages

(ii) Average monthly amount

(iii) Thirty times the total wages

 

(i) One Twelfth Of Total Wages

When workman has been in service of that employer, who was liable to pay compensation, and workman has been in service during a continuous period of not less than twelve months, which preceded accident, monthly wages of this workman should be one twelfth of that total wages, which have fallen due for payment to him/her by employer in last twelve months of that period.

(ii) Average Monthly Amount

If whole of continuous period of service immediately preceded accident, and during which workman was in service of that employer, who was liable to pay compensation, which was less than one month, monthly wages of workman should be average monthly amount, which was being earned by a workman, who was employed on same work by same employer, and which was being earned during twelve months, which immediately preceded accident, or which was earned by a workman, who was employed on similar work in same locality, if no workman was so employed.

(iii) Thirty Times The Total Wages

In other cases, monthly wages should be thirty times total wages, which was earned in respect of last continuous period of service, which immediately preceded accident, and which was earned from that employer, who was liable to pay compensation, and such thirty times should be divided by number of days, which comprises such period

(2) Commutation Of Half-Monthly Payments

Here following points are important:

(i) Agreement between parties

(ii) In absence of agreement

 

(i) Agreement Between Parties

If there is agreement between parties and either of parties’ files application to Commissioner, any right to receive half-monthly payments can be redeemed by payment of lump-sum of that amount, which is agreed by parties.

(ii) In Absence Of Agreement

When parties cannot agree and payments have been continued for not less than six months, and either of parties files application to Commissioner, any right to receive half-monthly payments can be redeemed by payment of lump-sum of that amount, which is determined by Commissioner.

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