Labour Law & Hr Consultant
Prashant B Ingawale
1st March 2018 From India, Mumbai
HR & Labour Law Adviser
2nd March 2018 From India, Mumbai
4th March 2018 From India, Salem
In our company(Coal India Limited), all employees are covered under group gratuity insurance scheme in collaboration with LIC. If any employee dies in harness, his nominee will be eligible for normal gratuity up to his death and thereafter gratuity calculated on the basis of last wages drawn at the time of death till his notional superannuation date.
5th March 2018 From India, Pune
The policy and practice of your Company in respect of payment of gratuity to the employees dying in harness are, in fact, highly commendable. The P.G Act,1972 also upholds such a right of the employees to receive such better terms of gratuity under any award or agreement or contract with the employer u/s 4(5) of the Act.
However, your reply conveys that the normal gratuity payable up to death is by the Insurer and the rest up to notional superannuation date is by the Company on its own. Can you clarify, please?
6th March 2018 From India, Salem
I was not associated with the working of such scheme as my organisation didn't have it. However, I have been informed by some HR colleagues that some companies float such group gratuity scheme by tying up with LIC. As per the information I gathered from them, I understand that a company enters into an agreement with LIC to frame the Scheme in the company's name.The fund will be created by the premium deposited by the company every year. The premium will be calculated on the basis of the number of employees, their age and date of joining and their salary(basic+ DA). The LIC acts as a fund manager and invests the funds. It seems the LIC assess the fund liability every year on the basis of the claims settled during the year and the fresh list of employees with all the above details submitted every year which includes employees left and employees joined during that year. It seems any short fall in fund will be made up for by the employer.
The salient feature of this scheme seems to be that the liability of the employer to pay gratuity is born by the LIC and the employee in case of death during service, will be paid gratuity that could have accrued to him till retirement had he been alive.But It is not clear tome whether an employee is paid gratuity even if he leaves before completion of five years.
As you said the Gratuity Act permits any scheme with better terms.
Any one who is associated with actually working of the scheme can better elaborate it.
HR & Labour Law adviser
6th March 2018 From India, Mumbai
7th March 2018 From India, Mumbai
We calculate gratuity up to superannuation by adding 60 years to his date of birth on the basis of last wages drawn at the time of his death(say-A). Thereafter we calculate gratuity up to employees date of death(say B). We pay gratuity amount calculated as B and the amount A-B is being claimed from LIC. After receiving this amount from LIC we also pay it to the nominee of ex employee subject to the condition that total gratuity amount does not exceed Rs. 10 lakhs.
10th March 2018 From India, Pune