Navigating Company Liabilities and Compensation After an Employee's Off-Duty Accident

Hi, One of our colleagues, aged 28 years and earning one lakh per month, died in a road accident away from his workplace while traveling (off duty) in his native place. My queries are:

1. What are the liabilities on the company employing around 8,000 people in such a case?
2. Is the compensation act applicable?
3. If yes, what is the amount payable to the deceased employee's family?

Regards,
PRASHANT

Dear Prashant,
Your query-wise reply is given hereunder:

1. What are the liabilities on the company employing around 8000 people in such a case?
The company's liability is to make the full and final payment to the nominee(s) / legal heir(s) resulting from the death of the employee.

2. Is the compensation act applicable?
No compensation is payable as per the Workmen's Compensation Act, 1923, as this accident did not happen in the due course of and out of employment.

3. If yes, what is the amount payable to the deceased employee's family?
As above.

Opinion submitted as requested.

With Regards,
R.N.Khola

Dear Mr. Khola, Thank you for responding to my post. Kindly elaborate on the following:

1. What is meant by full and final settlement and the items covered therein?
2. Is the employer responsible for providing insurance coverage, and to what extent?
3. In this case, the accident causing death happened during the course of employment but not out of employment (on duty). What is the employer's responsibility?

Thanks,
PRASHANT

What compensation or benefits are given to the dependents after the death if the person met with a road accident and died within a 5 km radius from the workplace while coming for duty, under the ESI Act, Labour Welfare Act, and P.F. Act.

From Vinod Yadav
Gurgaon

Revised Compensation Under the Workmen's Compensation Act

The compensation under the Workmen's Compensation Act has been revised, and the minimum compensation is now Rs 120,000 instead of Rs 80,000. Also, the salary has been capped at Rs 8,000. Therefore, the factor applicable to the age of 28 shall be multiplied by 50% of the salary (Rs 4,000) to determine the compensation amount.

ESI Coverage and Liability

If covered by ESI, the employer shall not have any liability; instead, the ESI Corporation will take care of it. According to the latest amendment, an accident that occurs while commuting to the office or place of work shall be considered an employment injury, entitling the dependent to benefits from the ESIC.

EDLI Benefits

Additionally, an amount subject to a maximum of Rs 1,05,000 is available through EDLI (Employees' Deposit Linked Insurance) from the Employees' Provident Fund Organisation. The amount depends on the PF accumulations and is separate from the PF dues.

Gratuity Entitlement

Moreover, in the case of a death, the dependent is entitled to receive Gratuity from the company at the rate of 15 days of average salary for each year of service.

Regards,
Madhu.T.K

One of my client's employees (a driver) passed away while off duty. He had taken leave due to illness and suffered a heart attack during the night. The investigation indicates that he was intoxicated as he was on leave that day, and he passed away in his sleep.

He is survived by one minor child and a wife, although they were not residing with the employee at the time. They had agreed to live separately but had not divorced. He was living with his mother and brother in a joint family. Currently, his family does not wish to provide any compensation to his wife but is willing to support his child.

Compensation Options

My question is, what other compensation can be offered besides the Full and Final settlement?

Exclusion of Wife from Compensation

How should we proceed in a situation where the wife is excluded from compensation, even though she might expect a share of it?

Please advise.

Looking forward...

Regards