The justification for compensation to the employee rests on the accepted principle that the employer has a duty of care, a duty to protect the health, welfare and safety of workers in his work environment.


6/2/20223 min read


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The Employees’ Compensation Act enacted on the 17th day of December 2010 is a social or welfare scheme that compensates employees who have suffered from or sustained injury arising from an accident that occurred in the course of their employment. It was basically enacted to address the inherent flaws of the Workmen’s Compensation Act, 1987 as it made adequate provisions for the compensation that will accrue to an employee or his dependant, in the case of death, for injury, illness or any disability suffered in the course of his employment.

The justification for compensation to the employee rests on the accepted principle that the employer has a duty of care, a duty to protect the health, welfare and safety of workers in his work environment. This is based on the belief that whenever there is a worker-employee relationship, whether express or implied, the employer owes certain duties to the employee, one of which is to care for his employees. It includes but not limited to providing necessary safety equipment, providing a safe and conducive work environment, ensuring that all safety measures are taken.

Early industrial employment conditions saw men and women workers receiving low wages, working long hours, serving in hazardous work environments and suffering from various forms of discrimination including sexual harassment. Child labour was also prevalent. When issues arise, victims are often left to be compensated at the discretion of their employer, who in most situations, treat their welfare with levity. This led workers to consequently organize protests to mitigate the hardship of their situation as well as negotiate for just rewards and safe work environments. This was however not enough to strictly hold employers liable to the responsibilities they owe their workers.

Due to the flaws of the Workmen’s Compensation Act, 1987, its effectiveness in securing compensation for injured employees was hampered, thus necessitating its review.This led to the enactment of the Employee’s Compensation Act in 2010.

The notable features of the Act include:

1. The substitution of the term ‘workman’ to ‘employee’, which covers a wider spectrum of persons employed and paid, for the execution of specific or general duties posed by the employer. The enlarged definition also includes independent contractors and sub-contractors.14

2. The empowerment of the National Social Insurance Trust Fund Management Board15 to administer and manage employees compensation and the employee compensation funds established by Section 56 of the Employees Compensation Act.

3. The establishment of a specific fund, as provided for in Section 56(2)(a)- (f) of the Act to compensate employees injured in the course of employment on application. The sole purpose of this fund is to ensure that employers are not left at the mercy of their employers but rather guarantees adequate compensation to injured employees upon certification that the claims are valid.

The purpose of the ECA is to impose a guaranteed fair compensation scheme for employees or their dependents as a form of social security along global practice. This is in line with its six Objectives contained in Section 1(a-f).

These objectives are to;

(a) Provide for an open and fair system of guaranteed and adequate compensation for all employees’ or their dependents for any death, injury, disease or disabilities arising out of or in the course of employment.

(b) Provide rehabilitation for employees’ for work related disabilities as provided in the Act

(c) Establish and maintain a solvent compensation fund managed in the interest of the employees and employers

(d) Provide for fair and adequate assessment for employers

(e) Provide an appeal procedure that is simple, fair and accessible, with minimal delays, and

(f) Combine efforts and resources of relevant stakeholders for the prevention of workplace disabilities, including the enforcement of occupational safety and health standards.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact



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