Covid deaths at work: Questions over compensation

Without laws specific to the pandemic, compensation is left to the discretion of companies

As the Covid-19 pandemic rages on in India, firms are debating whether workers who die of the disease, should be treated as cases of “industrial death” and what compensation should be given to them. Contact tracing for such cases, firms say, is a challenge.

According to business responsibility advisors, since existing laws do not cover Covid-19, any compensation in this regard has to be left to the discretion of companies.

Though most companies are taking the necessary safety measures, multiple cases of Covid-19 infections have been reported at a number of industrial units. Companies are now formulating standard operating procedures for the accounting of Covid-19 deaths (due to infection picked up on the premises) and related compensation.

Some of the steps under consideration are extending medical insurance cover to contractual and temporary workers and providing compensation from death benevolence funds.

Yasir Ahmad, partner at PWC for Sustainability and Responsible Business Advisory, pointed out that compensation for workplace fatality or accident is covered under two laws — the Workmen’s Compensation Act and the Employees’ State Insurance Act. “Moreover, for the prevention of workplace injuries and areas of Occupational Health and Safety (OHS), there are laws and guidelines under the Factories Act,” he said.

And since Covid-19-related fatalities are not covered under the current regulatory structure, compensation for it would be at the discretion of companies, Ahmad added.

Therefore, in most cases, death due to the coronavirus is not being treated as an industrial death, even if the infection was contracted in the workplace. For example, Toyota Kirloskar Motor (TKM) has decided that Covid-19 infections and related deaths would be treated as a health issue. “At

TKM, we are treating fatality due to Covid-19 as a natural death caused by a disease,” said vice-chairman, Shekar Viswanathan.

Another executive from one of the Tata Group’s subsidiaries added, “Death may happen when the labourer is at home or in hospital, as he will be on leave with pay (when found infected), and very rarely on site. So we do not account for fatality, unless the government specifies that it has been accounted for differently.”

Part of the problem is that it may be difficult to decide that an employee who died of the coronavirus actually picked it up on the work premises.

“Unfortunately, contact tracing is not easy, so ensuring that the infection was due to the labour presence at the work site may also not be easy. But companies will surely be considerate,” the executive said.

At present, firms are working out different compensation measures. TKM has enhanced the limit of employee medical insurance coverage. “In the unfortunate event of the death of an infected employee, we are providing substantial compensation with contribution both from the company and the employees,” Vishwanathan said.

Others plan to extend the already existing benevolence funds to such cases. A top executive from a capital goods firm said, “We have a death benevolence fund in the company. We will compensate a worker from that.” The Tata executive added, “Whenever there is a loss of life, we compensate. Accident deaths attract a higher compensation, but even otherwise, a payment is made.” An immediate step taken by most companies is to increase medical insurance coverage and extend it to the contract and temporary workforce. Vishwanathan said that TKM had modified the medical insurance cover to include Covid-19 treatment for all employees and their family members. The Tata Group subsidiaries and the capital goods firm mentioned earlier have also extended the insurance cover to their contract workforce.

Ahmad from PWC said, “Several private companies provide insurance cover for medical emergencies and some also cover Covid-19 induced expenses for their employees. However, it’s the management’s prerogative whether they want to upgrade their existing insurance cover to include COVID19 induced expenses.”