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Section 35: Principal employer to pay contribution in first instance

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 34 All 163 Sections of Code on Social Security, 2020 Section 36

Legal Commentary & Landmark Judgments: Section 35

Section 35 of the Code on Social Security, 2020 establishes a protective statutory doctrine declaring that an accident resulting in death or serious permanent disablement shall be deemed to arise out of and in the course of employment, even if the worker acted in breach of statutory regulations, employer orders, or without instructions, provided the act was done for employer business purposes.

  • Statutory Protection Against Disentitlement for Rule Breaches: Section 35 overrides common law contributory negligence, prohibiting the denial of social security compensation merely because the employee violated safety protocols, operated machinery without a formal license, or disobeyed managerial circulars.
  • Strict Gravity Threshold: Death or Serious Permanent Disablement: The statutory saving provision operates exclusively where the accidental injury results in death or serious and permanent disablement, preserving maximum social security protection for catastrophic injuries.
  • Mandatory Employer Business Nexus Requirement: The statutory deeming fiction applies only if the unauthorized or prohibited act was undertaken for the purposes of and in connection with the employer's trade or business, excluding purely personal pursuits.
Key Landmark Precedents:
  • ESIC v. Francis De Costa (1996) 6 SCC 1: The Supreme Court reaffirmed that acts done in breach of regulations or instructions remain protected where the underlying motive of the employee was to further the employer's operational business.
  • Padam Deb Sharma v. State of H.P. (1989) 1 LLJ 195 (HP): Held that violation of departmental safety rules does not extinguish statutory accident compensation when the employee acted bona fide in an operational emergency to safeguard plant operations.
  • General Manager, B.E.S.T. Undertaking v. Agnes (1964) 3 SCR 930: Emphasized that social welfare legislation must not be interpreted to deprive catastrophic accident victims or their families of statutory relief on technical grounds of regulatory infractions.
Courtroom Practice & Strategic Litigation Guidance:

In industrial manufacturing, plant heads must not suppress or reject internal accident reports merely because an injured worker bypassed safety interlocks or adjusted a moving conveyor without supervisor approval. If the worker's action was undertaken to clear an operational bottleneck or save production, Section 35 protects claim validity. Employers must file Form 12 (Accident Report) with ESIC within 24 hours to pre-empt statutory obstruction penalties.

Section 34 All 163 Sections of Code on Social Security, 2020 Section 36