hemumanuIf an employee met with a fatal accident outside the factory after 3 months of joining. Will He be eligible for Gratuity?
From India , Gurgaon
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Labour Law & Hr Consultant
PRABHAT RANJAN MOHANTY
Hr & Ir
Labour Laws & Ir
Advocate & Hr Professional
Aswath1302As per the gratuity act there is no qualifying tenure of continuous service of 5 years to be eligible for Gratuity in case of death or disablement. Hence you need to pay Gratuity to this employee.
From India, Chennai
R.N.KholaIf death occurred due to this accident then from where this employee will get gratuity. Moreover in this case the service period is only three months then from where the nominee or legal heirs will get gratuity amount from the employer.
R N KHOLA
From India, Delhi
As I understand in case of death gratuity will be paid irrespective of accidental/natural death. But service period is only three months. So for such short period whether his nominee/ Legal heirs will be paid gratuity or not?
From India , Gurgaon
umakanthan53You are correct Hemu; gratuity becomes payable irrespective of the completion of the minimum qualifying service, if the employee dies in harness. The place or reason for death is immaterial.
Since the basic unit of duration of service rendered for the purpose of calculation of gratuity under the PGA,1972 is one year, shorter spell of service like 3 months on the date of death will really be a problem for the employer to tackle with humanitarian consideration only. Had the employer taken a special gratuity insurance policy with life cover on payment of some additional premium, the insurer will pay the gratuity for the entire service up to 58 years of age of the deceased employee.
If not, payment of minimum Gratuity for one year plus some sizable sum by way of ex-gratia as well as employment on compassionate ground to the legal heir of the deceased if possible is the only befitting option in this extraordinary case.
This suggestion is purely based on humanitarian consideration only. IF THERE IS A WILL, THERE IS A WAY. After all charity begins at home only and so is Corporate Social Responsibility!
From India, Salem
KK!HRProviso 1 of Section 4(1) of the Payment of Gratuity Act 1972 makes it amply clear that the completion of eligibility period of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement. So the liability is absolute, whether 5 years of service is completed or not.
But the Act further lays down in subsection 2 that:
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned.
So reading the two together (say, applying the theory of Harmonious Construction), the minimum service has to be in excess of six months at least, below which there shall be no statutory liability.
Looking to the pathetic condition when the much hoped-for breadwinner of the family is cruelly snatched away by fate, what respected Umakanthan Sir has proposed as a humanitarian consideration is recommended.
From India, Mumbai
PRABHAT RANJAN MOHANTYDear Hemumanu,
The deceased employee is eligible for gratuity @ 15 days considering his employment period as one year.
The act is silent and have not provided the eligible criteria minimum working period prior to his death.
As per Section: 4 of Payment of gratuity. (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, -(c) on his death or disablement due to accident or disease: Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
From India, Mumbai