Rule 38: Gross misconduct
Reviewed by Finin2min Editorial Desk · Last reviewed 30 August 2026
Rule 38 — Governs gross misconduct and the rights, duties, powers or procedure expressly stated in this rule. Key operative text: (1) The following acts shall constitute gross misconduct for the purposes of second proviso to sub-section (1) of section 68, namely:— (a) wilful destruction of employer‘s goods or property;
Social Security (Central) Rules, 2026 were finally notified under G.S.R. 344(E), 8 May 2026. The Central Rules must be read with the Code and any later amendment/corrigendum.
Finin2min analysis — operative rule mechanics
Operative clauses
- (1) The following acts shall constitute gross misconduct for the purposes of second proviso to sub-section (1) of section 68, namely:— (a) wilful destruction of employer‘s goods or property;
- (2) (a) An appeal under sub-section (2) of section 68 shall be preferred to the competent authority in Form-XII;
- (b) The appeal may be made in writing and either handed over personally or sent under a registered cover or electronically to the competent authority.
- (c) When an appeal is received, the competent authority shall furnish a copy of the memorandum of appeal to the employer, call for his reply thereto and also ask him to produce documents connected with the issue of the appeal by fixing a date.
- (d) The competent authority may ascertain further details, if necessary, from the employer as well as from the appellant, and he shall consider the facts presented to him, if any, and shall give his decision.
Provisos / explanations
- Provided that the Competent Authority shall dispose of the appeal within three months from the date of receipt of the appeal:
Thresholds & timelines
- Provided that the Competent Authority shall dispose of the appeal within three months from the date of receipt of the appeal:
- Provided further that the Competent Authority may, for reasons to be recorded in writing, extend the said period for a further period not exceeding three months.
Mapped Code sections
Full notified text — Rule 38
38. Gross misconduct.–(1) The following acts shall constitute gross misconduct for the purposes of
second proviso to sub-section (1) of section 68, namely:—
(a) wilful destruction of employer‘s goods or property;
(b) assaulting any superior or co-employee at the place of work;
(c) criminal offence involving moral turpitude resulting in conviction in a court of law;
(d) theft, fraud, or dishonesty in connection with the employer‘s business or property; and
(e) wilful non-observance of safety measures or rules on the subject or wilful interference
with safety devices or with firefighting equipment.
(2) (a) An appeal under sub-section (2) of section 68 shall be preferred to the competent authority in
Form-XII;
(b) The appeal may be made in writing and either handed over personally or sent under a registered
cover or electronically to the competent authority.
(c) When an appeal is received, the competent authority shall furnish a copy of the memorandum of
appeal to the employer, call for his reply thereto and also ask him to produce documents connected
with the issue of the appeal by fixing a date.
(d) The competent authority may ascertain further details, if necessary, from the employer as well as
from the appellant, and he shall consider the facts presented to him, if any, and shall give his decision.
Provided that the Competent Authority shall dispose of the appeal within three months from the date
of receipt of the appeal:
Provided further that the Competent Authority may, for reasons to be recorded in
writing, extend the said period for a further period not exceeding three months.
(e) In case the employer fails to submit his reply or produce the required documents within the
specified period, the competent authority may give his decision ex-parte.Application and evidence
- Primary statutory test — (1) The following acts shall constitute gross misconduct for the purposes of second proviso to sub-section (1) of section 68, namely:— (a) wilful destruction of employer‘s goods or property;
- Additional operative limb — (2) (a) An appeal under sub-section (2) of section 68 shall be preferred to the competent authority in Form-XII;
- Qualification / exception to test — Provided that the Competent Authority shall dispose of the appeal within three months from the date of receipt of the appeal:
- Numerical or timing control — Provided that the Competent Authority shall dispose of the appeal within three months from the date of receipt of the appeal:
- Code Section mapping — 68, 70. Read the mapped provision together with this text rather than treating the concordance as a substitute for it.
- Prescribed-form link recorded in the corpus — XII. Confirm the current notified form/version before filing.
Cross-references & prescribed forms
Sections cited/mapped
Forms
XII
Worked example
For a worker/member seeking a benefit connected with gross misconduct, the file should show coverage, service/contribution facts, the rule/scheme and prescribed form, and the calculation/payment. One statutory point to test is: “Provided that the Competent Authority shall dispose of the appeal within three months from the date of receipt of the appeal:” Also test the express qualification/proviso before concluding the result. Reconcile the mapped Code Section(s) 68, 70. Use the current notified XII where the process requires it.
Illustrative only. Use the exact notified rule, prescribed form and competent authority.
Q&A — Rule 38
What is Rule 38 of the Social Security (Central) Rules, 2026?
Rule 38 — Governs gross misconduct and the rights, duties, powers or procedure expressly stated in this rule. Key operative text: (1) The following acts shall constitute gross misconduct for the purposes of second proviso to sub-section (1) of section 68, namely:— (a) wilful destruction of employer‘s goods or property;
What does Rule 38 require or permit?
A principal operative clause extracted from the notified rule is: “(1) The following acts shall constitute gross misconduct for the purposes of second proviso to sub-section (1) of section 68, namely:— (a) wilful destruction of employer‘s goods or property;” Read it with all sub-rules and provisos below.
Does Rule 38 contain a proviso or explanation?
Yes. One extracted qualification is: “Provided that the Competent Authority shall dispose of the appeal within three months from the date of receipt of the appeal:”
What deadline, period, percentage or amount appears in Rule 38?
The rule contains this numerical/time expression: “Provided that the Competent Authority shall dispose of the appeal within three months from the date of receipt of the appeal:” Apply it only in its notified context.
Which Code sections are linked to Rule 38?
The current concordance maps Rule 38 to Section(s) 68, 70.
Which form is connected with Rule 38?
The current corpus records: XII. Confirm the current notified version before use.
When did Rule 38 come into force?
The final Central Rules were notified as G.S.R. 344(E), 8 May 2026; Rule 1 states that the Rules come into force on publication. Check any later amendment or corrigendum before reliance.
Primary sources
Social Security (Central) Rules, 2026 — official Gazette PDF ↗
Code on Social Security, 2020 — India Code ↗
Source check: 20 August 2026.