Legal Heir Proof for Employee Gratuity: What Documents Should Companies Require?

Gratuity Payment in Case of Employee Death

In the case of the death of an employee, gratuity is to be paid to the legal heir if the employee had not submitted a nomination form. Now, the question is what document should the company insist on from the claimant to prove that he is the legal heir of the deceased employee? Should the company ask for a succession certificate from the court? Please advise.

Thanks in advance,

Regards

For the area in which your company is situated, there will be a Controlling Authority under the Payment of Gratuity Act. Usually, the Controlling Authority under the PG Act is an officer of the Labour Department of the State Government or the Central Government. You deposit the amount of gratuity with the Controlling Authority and ask them to disburse the amount. This is a legally permissible procedure.

Regards

Rightly said, Mr. Harikrishnan, sir. I just remembered my training on LTA, TA, and other benefits, and our mentor/faculty mentioned that in such cases of disputes, the court proceedings took a long time. After the announcement was made, the company or organization was required to pay some interest on the delayed period. Today it is 3 lakhs, and after 5 years, it will have some interest accumulated with it. So, it's best to deposit 3 lakhs with the court/authority today and ask them to make a decision to disburse it to the right heir.

During training, that faculty also mentioned a real incident of a funny case involving an employee who, after his death, had 3 women (with whom he had earlier married, affairs, etc.) and some 5 children. The court had to give them a share, and they also received a pension. All children were given a pension until the age of around 18 or 25 years. It was a rare case of olden times, and nowadays everyone makes sure nominations, etc., are done perfectly.

Also, during joining, if you have his/her personal file, you can look for family details and get information from his colleagues. Usually, depending on the nature of the employee, you can be sure that gratuity will be given to the wife; otherwise, if the wife is not there, then to the kids.

Making decisions can help avoid many things, and we should understand that one family is in sorrow. After my father expired, our house property was in his name, and in house property, there is no nomination facility. When we went to the registrar's office to transfer it to our name, he told us to get a succession certificate from the court. We also approached a lawyer who informed us that it would take some 4-5 months; we would have to put some notice in papers and ask if anyone had objections, etc. Since we were out of state people, we thought someone might cause a problem. However, we had been living in Aurangabad for over 20 years. So, we contacted a person living in our locality, who was retired from the registrar's office, and changed the name by providing an affidavit stating that we are the legal heirs to the property and a bribe. The name was successfully changed, and we also sold the property more than 2 years ago. Indian laws are indeed too complex.

Gratuity Payment in Absence of a Nominee

If no nominee is available, or a nomination was not made by the deceased employee, it is the responsibility of the employer to deposit such an amount with the controlling authority under the Gratuity Act. The authority may be the Central or State Government. Later, the legal heir is supposed to produce the right of claim with the controlling authority. The employer is not liable to hold or forfeit the payment on the grounds of no claim made by the legal heir of the deceased employee.

Regards

In my opinion, the provisions of the Alms Act make it mandatory for the employer to obtain nominations from all employees who have completed one year of service. The purpose behind this provision is to ensure that in the event of an employee's death, their dependents/nominees receive benefits without facing unnecessary difficulties. If the employer is required to provide benefits to the dependents of a deceased employee who worked for less than one year, such as in the current case of two months, there could be a provision for contributions to be collected from the employee upon joining the company, similar to ESI or EPF. In the absence of such a provision, and given that the requirement is for contributions from employees who have completed one year of service, the issue of providing benefits to the dependents of an employee who passed away before completing one year of service becomes uncertain.

I hope this helps clarify the situation. Please let me know if you need further assistance.