Sections 34-35 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.
Sections 34 and 35 of the Code on Social Security, 2020 decide when an accident is treated as arising out of and in the course of an employee's employment for the ESI benefits in Chapter IV. Section 34 sets a presumption and three deemed situations: emergency rescue, commuting and employer-arranged transport. Section 35 keeps an accident covered even if the employee was breaking a law or an employer's orders.
An accident in the course of employment is presumed, unless there is evidence to the contrary, to have arisen out of that employment (s.34(1)). Rescue acts in an emergency at the workplace (s.34(2)), a commuting accident where a nexus is established (s.34(3)), and travel as a passenger in an employer-arranged vehicle not run as ordinary public transport (s.34(4)) are deemed to arise out of and in the course of employment. Under s.35, breach of law or orders does not take the cover away, if the act was for the employer's trade or business.
Why these sections matter
For disablement benefit and dependants' benefit, the Code asks whether the injury was an "employment injury", that is, one sustained in an accident arising out of and in the course of employment. These two sections settle the hard cases in advance. Employees and dependants benefit from the presumption; employers should know the boundaries because an employee who was not insured before an accident can leave the employer liable to the Corporation under section 42 (see sections 42 and 43). For a broader compliance review, see our labour law compliance service.
Section 34 at a glance
| Sub-section | Situation | Treatment |
|---|---|---|
| 34(1) | Accident arising in the course of employment | Presumed, absent contrary evidence, to have arisen out of that employment |
| 34(2) | Accident in or about premises where the employee is employed for the employer's trade or business, while taking steps in an actual or supposed emergency to rescue, succour or protect persons thought injured or imperilled, or to avert or minimise serious damage to property | Deemed to arise out of and in the course of employment |
| 34(3) | Accident while commuting from residence to place of employment for duty, or back after performing duty | Deemed so, if a nexus is established between the circumstances, time and place of the accident and the employment |
| 34(4) | Accident while travelling as a passenger, with express or implied permission of the employer, by a vehicle to or from work | Deemed so if the accident would have been so deemed had he been obliged to travel by it, and the vehicle is operated by or for the employer or by someone providing it under arrangements with the employer, and is not operated in the ordinary course of public transport service |
The Explanation to s.34 says "vehicle" includes a vessel and an aircraft.
The presumption in s.34(1)
The first sub-section shifts the burden. If an accident happened in the course of employment, it is taken to have arisen out of it "in the absence of evidence to the contrary". The Corporation or the employer who disputes the link must bring that evidence. The employee need not prove the causal link first.
Rescue in an emergency: s.34(2)
An employee who runs to save a colleague or limits serious property damage at the workplace is covered even if rescue is not part of the job. The text covers "an actual or supposed emergency", so a genuine mistake about the danger does not remove cover.
Commuting: s.34(3)
This sub-section brings the journey between home and workplace inside the benefit, but not automatically. The accident must have a nexus with the employment, judged by circumstances, time and place. A worker on the usual route at the usual time for a shift is on stronger ground than one who detours for a personal errand. The Code does not define "nexus" further in this section, so the facts of each case matter. We do not describe any decided cases here.
Employer-arranged transport: s.34(4)
The passenger in a company bus or a vehicle provided under an arrangement with the employer is covered even if he has no obligation to use it, as long as two conditions hold. First, the accident would have been covered had he been obliged to use it. Second, the vehicle was run by or for the employer, or by another person who provided it under arrangements with the employer, and was not running in the ordinary course of a public transport service. Example: a factory pays a private operator to run a staff shuttle; a worker injured in a crash on that shuttle on the way to work is covered. If the same worker were hurt on a city bus he took on his own, s.34(4) does not help; only s.34(3) and its nexus test could.
Section 35: acting in breach of law or orders
Section 35 answers a common employer defence: "he was breaking the rules." An accident is deemed to arise out of and in the course of employment even though the employee was:
- acting in contravention of any law applicable to him;
- disobeying orders given by or for the employer; or
- acting without instructions,
provided two things are true: (a) the accident would have been deemed to arise out of and in the course of employment had the act not been done in contravention or without instructions, and (b) the act was done for the purpose of and in connection with the employer's trade or business.
Both conditions must be met. A worker who bypasses a safety guard to speed up a batch is acting for the business, so the accident stays covered. A worker who stops work to run a personal errand and is hurt fails condition (b).
Practical points for employers
- Record where and when an accident happened, and the route and transport used in a commuting case, as soon as it is reported.
- If you provide transport, be aware that s.34(4) treats it as an extension of the workplace for accident cover.
- Breaches of safety rules still carry their own consequences under other laws. Section 35 concerns benefit entitlement only.
- How an accident is reported, and the compensation side, are covered in Chapter VII; see sections 73 to 75 for reporting and liability.
For the benefits that follow, see our existing posts on disablement benefit under ESI and dependants' benefit.
Which rules apply
The Code text decides these questions. Where a scheme or rule needs procedure, the Central Rules, 2026 apply where the Central Government is the appropriate Government, and the State's own rules where the State Government is.
Need help with accident reporting and labour compliance?
When an accident happens, the first few hours decide how well the record stands up later. If you want a policy for accident recording, transport arrangements and ESI follow-up, our labour law compliance team can help you put one in place.
Key takeaways
- An accident in the course of employment is presumed to arise out of it, unless contrary evidence is shown (s.34(1)).
- Emergency rescue at the workplace is covered even though it is not part of the job (s.34(2)).
- Commuting accidents are covered only if a nexus is established (s.34(3)).
- Employer-arranged transport not run as ordinary public transport is covered (s.34(4)).
- Breach of law or orders does not remove cover if the act was for the employer's trade or business (s.35).
Read next
- Sections 32 and 33: ESI benefits
- Sections 36 and 37: Occupational diseases and the medical board
- Disablement benefit under ESI: temporary and permanent
- Common ESI violations and how to avoid them
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.