Handling Gratuity for a Deceased Employee: How to Support His Wife's Request?

Hi,

One of our employees passed away recently due to a heart attack. He was in our service at the time of his demise and had served for a period of seven years. We did not obtain any nominations from the employees for gratuity payment.

We have now received a letter from his wife requesting to settle his gratuity. I would appreciate your suggestions on how to proceed and what documents are required to settle the gratuity and other dues for his wife.

Regards,
erv

Dear,

When we do not have a nomination, we have to face this type of difficulty. In accordance with section 4 of the Payment of Gratuity Act, 1972, when there is no nomination, we are required to make the payment of gratuity to the legal heir(s) of the deceased. If you are satisfied that she is the only legal heir, then release the payment. However, as Mr. Madhu has suggested, to be on the safer side, you can obtain an affidavit stating that if any disputes arise later regarding this payment, she will be responsible for the results. If there is any dispute, you should demand the legal heir certificate from her.

Opinion/comments submitted as requested.

With Regards,
R.N.Khola

Hi,

I have certain queries:

1. Are all companies liable to pay gratuity to employees if they have more than 10 persons employed?
2. Like in our organization, the company is not keeping any separate fund/contribution in CTC which is being marked as Gratuity. So, if any employee leaves service after 5 years, can he/she still claim it?
3. Neither do we fill any forms like Form F nor have we registered ourselves anywhere, and no inspectors have ever asked us about gratuity. So, are we missing some procedure? I have normally seen 90% of the organizations following the above.

Thank you.

Hi all,

Thanks for the suggestions. Can we use the nomination provided in Form 2 (revised) for the PF nomination to settle the gratuity dues of a deceased employee in the absence of a nomination in Form F? Kindly share your opinions/comments.

Regards,
erv

Since you have not taken nomination as prescribed under the Payment of Gratuity Act, you can pay the amount to the nominee as mentioned in Form 2 of EPF. However, you will be doing it at your own risk. One point to consider is that the authority under the Gratuity Act is the State's Labour Department (Labour Officer/Labour Commissioner in Central), whereas under the Employees' Provident Fund, it is the Provident Fund Commissioner.

Gratuity is mandatory. Whether provided for or not, you are supposed to pay it once an employee leaves after serving for at least 5 years. In the case of an employee's death, their legal representatives should be paid gratuity even if the deceased employee did not complete five years of service.

Regards,
Madhu.T.K

If the employer fails to make payment of gratuity within one month, the concerned official can take any step which he finds appropriate, besides charging interest. The delay, having been caused due to his oversight of not getting nomination, the impact will also be with the employer alone. As suggested by R N Khola, let the employer take the initiative to make payment on the basis of any succession certificate.

Regards, Madhu.T.K

Dear,

I do not deal in civil matters; however, from what I have gathered so far, both the certificates, i.e., succession and legal certificates, have separate entities. Under this Act, we are required to have a legal heir certificate. The employer is bound to make the gratuity payment to the legal heir(s).

With Regards,
R.N.Khola

Sir,

But suppose there are disputes between the legal heirs, i.e., the claimant, then what? Does the legal heirship certificate serve the purpose when the claimant is certain that there is no dispute?

Dear,

If there is any dispute between the legal heirs, then that will be finalized by the appropriate court. Claimants also have the remedy by filing the claim before the Controlling Authority under the PG Act.

Hey,

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