Supreme Court Expands “Course of Employment” in Compensation Case: Daya Kishan Joshi vs. Dynemech Systems Pvt. Ltd. (9th August 2017)

Introduction

Date of the Judgment: 9th August 2017
Citation: (2017) INSC 722
Judges: R.K. Agrawal, J. and Mohan M. Shantanagoudar, J.

When does an employer’s responsibility for an employee’s safety extend beyond the workplace? The Supreme Court of India addressed this crucial question in a recent case concerning the scope of the Employees’ Compensation Act, 1923. The court examined whether an accident that occurred while an employee was traveling back home after a work assignment could be considered as arising “out of and in the course of employment,” thus entitling the employee’s family to compensation.

This judgment clarifies the boundaries of employer liability, particularly for employees whose jobs require them to travel. The bench, comprising Justices R.K. Agrawal and Mohan M. Shantanagoudar, delivered a unanimous decision, with the opinion authored by Justice Mohan M. Shantanagoudar.

Case Background

The case involves the unfortunate death of Shri Ravi Shekhar Joshi, an engineer employed by Dynemech Systems Pvt. Ltd. On September 8, 2007, Shri Joshi and a co-worker were assigned to test a filter installed at the Hero Honda Factory in Dharu Heda, Haryana. After completing their work, they began their return journey to Delhi at 4:30 PM. Tragically, they met with a road accident shortly after leaving the factory premises. Shri Joshi was declared “brought dead” at the hospital, while his co-worker received first aid.

The appellants, Shri Joshi’s family, sought compensation under Section 22 of the Employees’ Compensation Act, 1923. The Commissioner initially dismissed their claim, stating that the accident did not arise “out of and in the course of employment.” This decision was later upheld by the High Court of Delhi, leading the family to appeal to the Supreme Court.

Timeline

Course of Proceedings

The appellants initially filed a claim for compensation before the Commissioner under the Employees’ Compensation Act, 1923. The Commissioner dismissed the claim, holding that the accident did not arise out of and in the course of employment. The High Court of Delhi upheld this decision, leading to the appeal before the Supreme Court.

Legal Framework

The core of the legal framework is Section 3(1) of the Employees’ Compensation Act, 1923, which states:

“If personal injury is caused to [an employee] by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this chapter:”

Additionally, Section 4(1)(a) of the Act specifies the compensation amount in case of death resulting from the injury:

“Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:- (a) where death results from the injury : An amount equal to fifty per cent. of the monthly wages of the deceased *[employee] multiplied by the relevant factor; or an amount of *[one lakh and twenty thousand rupees], whichever is more; ”

The Supreme Court emphasized that the phrases “arising out of” and “in the course of employment” are distinct. “In the course of employment” refers to the time during which the employment exists, while “arising out of employment” requires a causal connection between the employment and the injury.

Arguments

The core issue revolves around whether the accident occurred “out of and in the course of employment.” The arguments from both sides are as follows:

• Appellants’ Submission:
  • The appellants argued that the deceased was on duty, traveling as part of his job, when the accident occurred.
  • They contended that the nature of his employment required him to travel to the Hero Honda factory, and the return journey was a necessary part of his job.
  • The accident was a direct consequence of his employment-related travel.
• Respondent’s Submission:
  • The respondent argued that the accident occurred on a public road, and the deceased was not on the employer’s premises or engaged in specific work at the time of the accident.
  • They relied on the principle that commuting to and from work is generally not considered “in the course of employment.”
  • The respondent contended that the accident was not causally linked to the nature of the employment.

Innovativeness of the argument: The appellants innovatively argued that the nature of the job required the employee to travel, thus making the travel an integral part of the employment, and not just a commute.

Issues Framed by the Supreme Court

The Supreme Court addressed the following issue:

1. Whether the accident of the deceased occurred during the course of and out of employment?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

• Saurashtra Salt Manufacturing Co. v. Bai Valu Raja (AIR 1958 SC 881)*: The court distinguished this case, stating that the facts were different. In the present case, the employee’s travel was necessitated by his employment, unlike in the cited case.
• Pierce v. Provident Clothing and Supply Co. Ltd. [(1911) 1 KB 997]*: The court cited this case for the principle that an accident arises out of employment when it results from a risk incidental to the employment.
• John Stewart and Son Ltd. v. Longhurst [(1917) AC 249]*: The court cited this case to emphasize that whether a situation arises “out of or in the course of employment” must be determined on a case-to-case basis.
• Andrew v. Failsworth Industrial Society [(1904) 2 K. B. 32]*: The court cited this case to support the view that the accident need not be connected to the work itself, as long as the employee was in a position that arose out of the employment.
• Lawrence v. George Matthews Ltd. [(1929) 1 KB 1]*: The court cited this case to support the view that injuries to employees on their way back home can fall within those “arising out of employment” if the employment brought them to a place of danger.
• B.E.S.T. Undertaking vs Agnes(AIR 1964 SC 193)*: The court cited this case to highlight the principle of notional extension of time and space in determining the course of employment.
• Mackinnon Machenzie & Co. (P) Ltd. v. Ibrahim Mahmmed Issak [( 1969)2 SCC 607]*: The court cited this case to emphasize that “arising out of employment” means that the injury resulted from a risk incidental to the duties of the service.
• Regional Director Employees’ State Insurance Corporation v. Francis De Costa [(1996) 6 SCC 1]*: The court cited this case to highlight the three principles that must be proven for claiming compensation: accident, causal connection to employment, and suffered in the course of employment.
• Union of India v. Surendra Pandey [(2015) 13 SCC 625]*: The court cited this case for the principle of notional extension of employment, giving examples of when an employee is considered to be in the course of employment.
• Manju Sarkar v. Mabish Miah [(2014) 14 SCC 21)]*: The court reiterated the principles of notional extension of employment.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the understanding that the deceased’s travel was an integral part of his employment. The court emphasized that the nature of his job as a sales engineer required him to visit the Hero Honda Factory, and the return journey was a necessary component of that work. The court’s reasoning was based on the following points:

• The deceased was on duty and traveling for work.
• The return journey was a necessary part of his job.
• The accident was a direct consequence of his employment-related travel.
• The very nature of his employment made it necessary for him to be there.

Logical Reasoning:

The court considered alternative interpretations, such as the argument that commuting to and from work is generally not considered “in the course of employment.” However, it rejected this interpretation, emphasizing that the nature of the deceased’s job required him to travel, making the travel an integral part of his employment. The court’s final decision was based on the principle of “notional extension” of employment, which acknowledges that employment can extend beyond the physical workplace when an employee is engaged in activities directly related to their job.

The court’s decision was based on the principle of “notional extension” of employment, which acknowledges that employment can extend beyond the physical workplace when an employee is engaged in activities directly related to their job. The court held that the accident arose out of employment because the very nature of the employment made it necessary for him to be there.

“The words ‘arising out of’ and ‘in the course of employment’ are in fact two different phrases and have been understood as such.”

“The expression ‘out of employment’ is not confined to the mere nature of the employment: the expression applies to employment as such, to its nature, its conditions, its obligations and its incidents.”

“From the aforementioned, it is clear that the presence of the deceased on the road in question was incidental to his employment as a sales engineer.”

The court did not have a minority opinion and the decision was unanimous.

Key Takeaways

• Notional Extension of Employment: The Supreme Court reaffirmed the principle of notional extension of employment, which extends the scope of employment beyond the physical workplace.
• Travel as Part of Employment: When travel is an integral part of an employee’s job, accidents during such travel can be considered as arising “out of and in the course of employment.”
• Causal Connection: There must be a causal connection between the employment and the injury for compensation to be awarded.
• Case-Specific Analysis: Each case must be examined on its own facts and circumstances to determine whether an accident arose out of and in the course of employment.

Directions

The Supreme Court directed the matter to be returned to the Commissioner under the Employees’ Compensation Act, 1923, to decide the remaining issues framed by him.

Development of Law

The ratio decidendi of this case is that if the nature of the employment requires an employee to travel, then any accident during such travel can be considered as arising “out of and in the course of employment,” thereby entitling the employee to compensation under the Employees’ Compensation Act, 1923. This ruling expands the interpretation of “course of employment” beyond the traditional confines of the workplace, particularly for jobs that require travel. This case clarifies that the “course of employment” is not limited to the physical premises of the workplace but includes the travel undertaken as part of the employment. This is a significant development from the previous position of law.

Conclusion

The Supreme Court’s judgment in Daya Kishan Joshi vs. Dynemech Systems Pvt. Ltd. clarifies that an employer’s liability under the Employees’ Compensation Act, 1923 extends to situations where an employee is injured while traveling for work, provided that such travel is an integral part of their job. This decision reinforces the principle of notional extension of employment and ensures that employees are protected even when they are not physically present at their workplace.