Sections 159 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 159 lets the Central Government make rules for moving employee compensation money deposited with a competent authority to a person abroad, and for receiving compensation money from abroad. Section 160 requires rules, regulations, notifications and schemes to be laid before Parliament or the State Legislature.
Under s.159 the Centre may make rules for transferring to a foreign country compensation deposited with a competent authority under Chapter VII, but no sum deposited for a fatal accident is transferred without the employer's consent and only after the competent authority has ordered its distribution under s.81. Under s.160, Central rules, regulations, notifications and schemes are laid before each House of Parliament for 30 days in total; both Houses may modify them or agree they should not be made, without affecting anything already done. State rules, schemes and notifications are laid before the State Legislature.
Why it matters
Section 159 matters in cross-border employment: a worker or a dependant may be living abroad when compensation is awarded. Section 160 matters to everyone, because it is the democratic check on rules, regulations and schemes that shape obligations such as the Central Rules, 2026. For advice on how rules and notifications affect your establishment, see our legal consultation service. Compensation procedure itself is in sections 79 to 81.
Section 159: transfer of compensation money abroad
The rule-making power (s.159(1))
The Central Government may by notification make rules for:
- transfer to any foreign country of money deposited with a competent authority under Chapter VII which has been awarded to, or may be due to, a person residing or about to reside in that country; and
- receipt, distribution and administration in any State of money deposited under the law relating to employees' compensation in any foreign country, awarded or due to a person residing or about to reside in any State.
Safeguard for fatal accidents
Proviso: no sum deposited under Chapter VII for fatal accidents is transferred without the consent of the employer concerned, and only after the competent authority receiving the sum has passed orders determining its distribution and apportionment under section 81.
Effect of a transfer (s.159(2))
Where money has been transferred under these rules, the provisions of the Code on distribution by the competent authority of deposited compensation cease to apply to that money.
| Element | Requirement |
|---|---|
| Who makes rules | Central Government, by notification |
| Money covered | Compensation deposited with a competent authority under Chapter VII |
| Fatal accident sums | Need the employer's consent and a prior distribution order under s.81 |
| After transfer | The Code's distribution provisions stop applying to that money |
The Code's text and the Central Rules, 2026 that we have read do not spell out a separate country-by-country procedure beyond s.159; do not assume one exists.
Section 160: laying before Parliament and State Legislatures
Central rules, regulations, notifications and schemes (s.160(1))
Every rule, regulation, notification and scheme made or framed by the Central Government or the Corporation is to be laid as soon as may be after it is made before each House of Parliament, while it is in session, for a total period of thirty days, which may be in one session or two or more successive sessions.
If before the expiry of the session immediately following (the session or successive sessions above):
- both Houses agree to a modification, it has effect only in the modified form; or
- both Houses agree that it should not be made, it is of no effect.
Any such modification or annulment is without prejudice to the validity of anything previously done under it.
State rules, schemes and notifications (s.160(2))
Every rule and scheme made or framed, and every notification issued, by the State Government is to be laid as soon as may be before the State Legislature: if it has two Houses, before both; if one House, that House. Unlike s.160(1), sub-section (2) sets no 30-day period and no annulment mechanism.
What this means for employers
- Rules take effect on publication (for the Central Rules, 2026, rule 1(2) says on publication in the Official Gazette); laying before Parliament follows, it does not delay.
- A rule can later be modified or annulled by Parliament, but actions taken in the meantime stay valid.
- The Central Rules, 2026 were notified on 8 May 2026; the text in front of us does not show when or whether they were laid. Check the Parliament record if the point matters to a dispute.
A worked example
A worker employed by an Indian contractor is fatally injured, and the competent authority orders compensation to be distributed among the dependants under s.81. One dependant has returned to live abroad. If the Central Government has made rules under s.159 and the employer consents, the dependant's share can be transferred abroad; without the employer's consent the fatal-accident money cannot be transferred. Once it is transferred under the rules, the Code's distribution provisions stop applying to that money. (Illustrative.)
Need help with cross-border compensation or rule changes?
If an award involves a dependant abroad, or a newly notified rule affects your payroll obligations, specific advice can save delay. Our legal consultation team can help you check the applicable rule, the employer's consent step and the status of any modification.
Key takeaways
- Section 159: Central rules for moving Chapter VII compensation to or from foreign countries.
- Fatal accident sums need employer consent and a prior s.81 distribution order.
- After transfer, the Code's distribution provisions cease for that money.
- Section 160(1): Central rules, regulations, notifications and schemes are laid for 30 days in Parliament.
- Parliament can modify or annul, but past actions remain valid.
- State rules, schemes and notifications are laid before the State Legislature.
Read next
- Sections 161 to 163: Overriding effect, delegation and removal of difficulties
- Sections 156 to 158: State rules, Corporation regulations and prior publication
- Sections 79 to 81: Review, commutation and distribution of compensation
- 4 labour codes 2020: Wages, IR, OSH and Social Security
Disclaimer: Based on the Code on Social Security, 2020 (as enacted) and, where noted, the Code on Social Security (Central) Rules, 2026 (G.S.R. 344(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.