Employees’ Compensation Act is an Act, which establishes a Social Insurance Scheme designed to provide compensation to employees who suffer from occupational diseases, sustain injuries or disability from accident at work place or in the course of employment, whether at usual place of work or outside of it. It also provides compensation to the next-of-kin of an employee who dies at or in the course of work.

Social Insurance is a method of Social Protection provision, which is financed by contributions made by either employer, employee or both and in some special cases by government, sustained through the pooling of risks and finances and benefits prescribed in the law.

Whereas, commercial insurance services which aim at profit maximization, serve the individual, companies and agencies that can pay the required premium; social insurance, is non – profit oriented and serves individuals who may not be able to pay the premium mandatory in commercial insurance.

The goal of ECA is to establish an Employee’s Compensation Scheme

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An employee is a person employed by an employer under oral or written contract of employment whether on a continuous, part-time, temporary, apprenticeship or casual basis and includes a domestic servant who is not a member of the family of the employer including any person employed in the federal, State and local Governments, and any of the government agencies and in the formal and informal sectors of the economy.

The Stakeholders are the three tiers of government (Federal, State and Local Governments), employers and employees in the formal and informal sectors.