Bombay High Court, in Air India Charters Ltd. v. Ms. Tanja Glusica & Ors., F.A. No. 1854 of 2013, addressed the calculation of compensation under the Employee’s Compensation Act, 1923 (“EC Act “). The Court highlighted that the computation must align with the salary actually paid by the contractor to the employee, rather than the amount paid by the principal employer to the contractor. This distinction, the Court noted, is critical because employees are not privy to the terms of contracts between employers and contractors. Consequently, it concluded that compensation must be based on the employee’s actual earnings, ensuring fairness in determining dependents’ entitlements.
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