Gratuity Payment Dilemma: Who Should Receive It When There's No Nomination Form?

Gratuity Payment Dilemma

One of our employees passed away, and we are unable to pay the gratuity amount to him. We did not collect a Nomination form from him, and now his wife and parents are claiming the gratuity amount. In this case, who will receive the gratuity amount? The parents have informed us that the deceased's wife has remarried. In that scenario, is she entitled to receive the gratuity amount?

Regards,
Hema

When the deceased employee has not made any nomination, you must deposit the gratuity amount accepted by you to be payable with the Controlling Authority under the Payment of Gratuity Act, having jurisdiction over the area in which your company is situated. Both the Central Government and the State Government have notified Controlling Authorities under the Payment of Gratuity Act. So please check which is the appropriate Government for your company. Is it the Central Government or the State Government? Then, deposit the gratuity amount with the correct Controlling Authority. His receipt for the amount deposited with him will discharge your liability to pay gratuity to the extent of the deposit made. However, the heirs of the deceased employee may claim that an amount more than what has been deposited by you is due from you. In which case, you should be ready to meet their claim.

With regards,

With respect to the subject query, I would also like to know the following:

1. Since the widow of the deceased remarried, would she remain a dependent of the deceased and be liable to receive widow benefits?
2. In case he had kids and they are being taken care of by their mother (even after remarriage), would the kids alone be the heirs, or would the mother be included as well?
3. If the kids of the deceased are being cared for by his parents, would the kids alone be the heirs, or would the deceased's parents also be considered heirs?
4. If the deceased had no children, would the remarried wife or parents be considered as dependents?

Regards,
Suresh

The amount of gratuity payable to a deceased employee is considered his property. Therefore, the law of succession applicable to the deceased employee, which depends on his religion, will determine the questions raised by you. It is not obligatory for the employer to identify the legal heirs of the deceased employee. If there is any doubt regarding the person to whom the gratuity should be disbursed, it can be safely given to the nominee of the deceased employee. Such disbursement will discharge the liabilities of the employer. According to court decisions, the nominee cannot take the entire amount of gratuity disbursed to him. He takes it on behalf of the other legal heirs of the deceased employee and shares it with them according to the law.

As the question of who the legal heirs are depends on the religion of the deceased employee, another safe way for the employer to handle this situation is to deposit the amount with the Controlling Authority under the Payment of Gratuity Act. Though according to section 7(4)(a) of the Payment of Gratuity Act, the Controlling Authority can decide who is entitled to receive the gratuity, they usually require applicants to produce a succession certificate issued by a court of competent jurisdiction. I repeat that your questions can be answered only based on the law of succession applicable to the deceased employee.

With regards,