If the employee had made the nomination, then you have to go by the nomination and pay the sum due to the respective nominee. Importantly, the nominee has only the right to receive the amount but cannot entirely appropriate it. The other legal heirs have a claim against the nominee for their rightful share, the employer is not a party to it.
If the employee died intestate (i.e., without any nomination) then the following suggestion could be considered. As regards Gratuity, the Controlling Authority under the PGA 1972 (the Assistant Commissioner of Labour) is competent to decide who should get what benefit, so the gratuity amount must be deposited with this authority. As regards PF, forward the claims received to the PF authorities certifying the facts of the matter. In so far as the other payments like unpaid salary, leave encashment, any other welfare sum, go by the nomination if it is there.
You may consider calling both the parties and try to make a rapprochement between them on how the amount has to be divided and advise them against any frivolous litigation which will only delay the disposal of the matter and entail uncalled for expenses.
From India, Mumbai
In case of any dispute among legal heirs in sharing the full and final settlement, please direct all eligible Legal Heirs to obtain Succession Certificate through competent Civil court thereby employer can safeguard their interest. It would be bit time consuming process but if you go by the Verdict of the Court no Legal Heir can challenge the employer's decision.
From India, Madras