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Section 28: Employees' State Insurance Fund

The Code on Social Security, 2020 (Act No. 36 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter IV: Employees' State Insurance Corporation
Competent Labour Forum
Act No. 36 of 2020
Section 27 All 163 Sections of Code on Social Security, 2020 Section 29

Legal Commentary & Landmark Judgments: Section 28

Section 28 of the Code on Social Security, 2020 enacts the universal compulsory statutory insurance mandate under Chapter IV, requiring every eligible employee in a covered establishment to be insured from the first day of employment, irrespective of contract duration or probationary status.

  • Universal Compulsory Insurance Mandate: Section 28 dictates that all employees in factories or establishments to which Chapter IV applies shall be insured in the manner prescribed by the Central Government, establishing an absolute statutory duty on the employer.
  • Zero Waiting Period & Day-One Coverage: Statutory insurance coverage attaches on the very first day the employee reports for work; the employer is strictly prohibited from deferring insurance during probationary, temporary, or training periods.
  • Digital Registration & Identity Generation (Pehchan): Employers must electronically register every new employee on the ESIC portal within the prescribed statutory timeframe (ordinarily 10 days) to generate an Insurance Number and biometric Pehchan identity card for cashless medical access.
Key Landmark Precedents:
  • Royal Western India Turf Club v. E.S.I.C. (2016) 4 SCC 521: The Supreme Court held that the compulsory insurance mandate under the ESI Act applies to all employees regardless of whether their employment is regular, casual, temporary, or seasonal, rejecting managerial arguments that short tenure justifies non-insurance.
  • South India Flour Mills (P) Ltd. v. ESIC (1986) 3 SCC 238: The Supreme Court held that workers employed for casual maintenance, repair, or building expansion within factory premises are covered employees requiring compulsory statutory insurance.
  • Employees' State Insurance Corporation v. Harrison Malayalam Ltd. (1993) 4 SCC 361: The Supreme Court ruled that failure to identify individual workers does not relieve the employer of the mandatory statutory obligation to insure and remit contributions.
Courtroom Practice & Strategic Litigation Guidance:

HR onboarding protocols must mandate immediate digital registration of all new hires earning up to ₹21,000 per month (₹25,000 for persons with disabilities). If an unregistered worker suffers an accident on their first day of work, the employer faces catastrophic financial liability under Section 31 to reimburse the Corporation for the capitalized value of all medical and disablement benefits, alongside criminal prosecution.

Section 27 All 163 Sections of Code on Social Security, 2020 Section 29