Navigating Employee Death: What Compensation Is Fair and Legally Required?

Dear All, One of our employees designated as Manager (Bills Realization Department) died in a road accident after duty hours recently. His nature of work involves fieldwork, visiting customers' places for invoice submission, and realization of payments. After his regular working hours, he went home and then proceeded to attend a family function. While returning on his bike around 10:00 p.m., he was involved in an accident and succumbed to head injuries at the hospital.

His basic salary is Rs. 9,000/-, and his gross pay is Rs. 18,500/-. Unfortunately, we do not have any accident cover for our employees, and he was not covered under ESI. He had been part of our organization for the past 3 years and 9 months.

Eligibility for Gratuity

1. Is he eligible for gratuity for 4 years or up to his date of retirement? Our retirement age is 60 years, and he was 49 years old at the time of his passing. We do not have any arrangement with an insurance company for a gratuity scheme.

Compensation Beyond Gratuity

2. His family is now seeking compensation from the company in addition to his full and final settlement. Is the company legally obligated to provide compensation beyond gratuity and other outstanding dues? If so, what would be the appropriate amount?

Your guidance on these matters would be greatly appreciated.

Regards, erv

Coverage Under PF and EDLI Scheme

If he was covered under PF, he should also be covered under the EDLI Scheme under the PF & MP Act 1952. Kindly go through the act. According to the PF & MP Act 1952, those covered under this act as PF members should also be covered under EDLI for life insurance. It will provide death claim benefits to the legal heirs of the deceased employee, with zero rupees contribution from the employee, and only the premium will be paid by the employer.

According to you, if the incident happened after working hours, I think there is no need to pay any other compensation.

As the death did not occur while on duty, and the notional extension of time and place does not apply (since the death happened not while returning from the office at the normal time of travel but while going to or coming from a family function), no compensation under the Workmen (Employees) Compensation Act is payable to his dependents by the employer.

Yes, as stated by Guru, his dependents can receive compensation as admissible under the Employees' Deposit Linked Insurance Scheme of the Employees' Provident Fund, which will be restricted to Rs. 130,000.

Regards,
Madhu.T.K

Yes, gratuity is payable on an employee's death, whether accidental or natural, which is irrelevant. From your HR Department, the following payments are payable: Gratuity, Superannuation (if applicable), LTA, PL/EL/Annual Leaves, and to the P.F. Authority for his nominee's pension and EDI benefits.

Is he eligible for gratuity for 4 years or up to his date of retirement? Our retirement age is 60 years, and he was 49 years of age at the time of death. We do not have any tie-up with an insurance company for the gratuity scheme. He is eligible for 4 years of gratuity amount.

His family is now requesting a compensation amount from the company apart from his full and final settlement. Does the company legally have to give any compensation apart from gratuity and other dues? If yes, what is the amount to be given? He is not eligible for WC benefit. However, if the management decides, they can go for minimal compensation so that it will create good morale/goodwill among the other workers in the organization.

Apart from this, you can apply for PF pension and EDLI insurance as stated by Guru. Also, you can give a job opportunity to his family members if they are suitable for any of the vacant positions in your organization.

Thank you.

Can the dependents take legal action against the company for not providing any insurance benefits to the employee while he was on duty? His designation is Manager in the Bills Realisation Department, and his work involves fieldwork.

Regards,
erv

Hope the above replies are sufficient to say that since the death occurred while off duty, the employer is not liable to pay any compensation.

Regards,
Madhu. T.K

Continuing with the Gratuity, if anything happens to the employee and he cannot rejoin the company after serving more than 9 years, considering his age at that time of 45 years, is he eligible for gratuity for the remaining 15 years?

Regards,
Satish

Gratuity Eligibility in Case of Natural Death

He is eligible for gratuity even in the case of natural death after the completion of his full service. It is the management's responsibility to pay the gratuity.

Exemption from Five-Year Service Requirement

As per Section 4, clause c, the completion of continuous service of five years shall not be necessary in cases where the termination of employment is due to death or disablement.

Penalties for Non-Compliance

Section 9, clause 2 states that an employer who contravenes or fails to comply with any provisions of this Act, rule, or order shall be punishable by imprisonment for a term of not less than three months but not exceeding one year, or a fine ranging from ten thousand rupees to twenty thousand rupees, or both.

Regards,
Kaleswara Rao