In a significant judgment delivered on July 29, 2025, the Supreme Court (SC) of India ruled that employees injured or killed while commuting to or from their workplace may be eligible for compensation under the Employees’ Compensation Act, 1923, provided a clear nexus exists between the accident and the employment.
The decision marks a pivotal shift in how workplace-related injuries are interpreted, especially in cases involving travel outside the physical premises of employment.
The ruling was passed by a division bench comprising Justice Manoj Misra and Justice K V Viswanathan in the case of Davishala & Ors vs Oriental Insurance Company Ltd & Anr.
The Court overturned a prior ruling made by the Bombay High Court. As a result, it restored the compensation originally granted to the family of the deceased worker.
SC Case Background: Tragedy During Early Morning Commute
The case centered on Shahu Sampatrao Jadhavar, a watchman employed at a sugar factory.
On April 22, 2003, Shahu set out from home on his motorcycle to report for his scheduled 3 a.m. shift.
Tragically, he was fatally injured in an accident about five kilometers away from the factory.
His family—including his widow, children, and mother—filed a claim under the Employees’ Compensation Act.
The Commissioner for Workmen’s Compensation awarded them ₹3,26,140 with 12% annual interest from May 22, 2003.
However, the Bombay High Court reversed the award, stating that the accident occurred outside the scope of employment.
The Supreme Court disagreed, emphasizing that the timing, nature of employment, and circumstances of the commute established a direct connection to the job.
Legal Interpretation: Expanding “Course of Employment”
The Court clarified the meaning of the phrase “accident arising out of and in the course of employment” under Section 3 of the Employees’ Compensation Act.
The ruling clarified that the definition covers accidents that happen during a reasonable commute to or from work.
Such incidents are included only when there is a clear connection in time, location, and purpose with the employee’s duties.
To support its interpretation, the bench referred to Section 51E of the Employees’ State Insurance Act, 1948, which explicitly deems commuting accidents as employment-related if a nexus is established.
Although Section 51E was introduced in 2010, the Court ruled it as clarificatory in nature, granting it retrospective effect.
Implications of SC Ruling for Workers and Employers
The ruling is expected to have wide-reaching implications, particularly for workers in shift-based roles, factory jobs, and remote locations.
The ruling reinforces the principle of notional extension in employment law.
This concept permits certain locations and timeframes beyond the traditional workplace to be regarded as part of employment, but only under specific conditions.
Legal experts see the decision as a strong reaffirmation of the protective intent behind compensation laws.
These laws are designed to shield workers and their families from the financial impact of injuries or fatalities that occur in the course of employment.
The Court emphasized that such laws must be interpreted liberally and purposively to fulfill their social welfare objectives.
Policy and Legislative Outlook
The judgment could lead to a comprehensive review of compensation policies across various sectors.
In response, employers may need to revisit their insurance coverage and rethink their risk management strategies.
It also sets a precedent for future cases involving commuting accidents, potentially influencing legislative amendments and administrative practices.
India’s workforce is evolving rapidly, with mobility and decentralization becoming more common.
This ruling highlights the urgent need for legal frameworks that align with the current landscape of employment.
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