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Section 5: National Social Security Board and State Unorganised Workers' Social Security Board

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

Statutory Mandate
Chapter II: Social Security Organisations
Competent Labour Forum
Act No. 36 of 2020
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Legal Commentary & Landmark Judgments: Section 5

Section 5 of the Code on Social Security, 2020 establishes the Employees' State Insurance Corporation as a statutory body corporate endowed with perpetual succession and a common seal, vested with plenary authority to administer India's integrated social health and disability insurance system.

  • Statutory Corporate Structure & Legal Persona: Section 5(1) establishes the Employees' State Insurance Corporation (ESIC) as a body corporate having perpetual succession and a common seal, capable of holding movable and immovable assets, entering into commercial contracts, and litigating in its corporate persona.
  • Tripartite Institutional Architecture: Mandates extensive stakeholder representation, headed by the Union Minister of Labour as Chairman, Secretary to the Ministry of Labour as Vice-Chairman, representatives from all State Governments and Union Territories, ten employer representatives, ten employee representatives, medical council nominees, and Members of Parliament.
  • Autonomous Governance & Delegation to Standing Committees: Vests broad administrative authority in the Corporation to oversee the ESI Fund, enforce contributions, construct and manage hospitals, and delegate executive functions to the Standing Committee (Section 10) and Medical Benefit Committee (Section 11).
Key Landmark Precedents:
  • Royal Western India Turf Club v. E.S.I.C. (2016) 4 SCC 521: The Supreme Court recognized ESIC as a statutory body corporate created to advance the constitutional mandate of social justice under Article 41 and 42; its administrative powers to enroll establishments and demand contributions must not be curtailed by narrow technical interpretations.
  • Employees' State Insurance Corporation v. Harrison Malayalam Ltd. (1993) 4 SCC 361: The Supreme Court confirmed that the Corporation possesses autonomous statutory power to enforce contributions across industrial establishments, and its statutory claim cannot be defeated by the employer's failure to maintain identification records of casual laborers.
  • Transport Corporation of India v. ESI Corp. (2000) 1 SCC 332: The Supreme Court held that the Corporation has the jurisdiction to enforce compliance across all functional extensions, offices, and regional hubs of a covered enterprise regardless of geographic dispersion.
Courtroom Practice & Strategic Litigation Guidance:

Corporate employers subject to ESIC inspection notices or assessment orders must recognize that ESIC functions as an autonomous public corporation. Legal challenges questioning the validity of an assessment must be grounded in statutory procedural violations under Chapter IV rather than general administrative claims. All settlement proposals or deferred installment applications must be submitted through proper delegated channels to the Regional Director or Director General.

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