Navigating Gratuity and Compassionate Employment After Employee's Death in Mining Industry

Case of Long Absenteeism in the Mining Industry

The undersigned works in a PSU in the Mining Industry and has experienced a peculiar case. A permanent employee has been absent from his duties without any information or sanctioned leave for the last couple of years. He was charge-sheeted on the grounds of long absenteeism, and subsequently, a domestic inquiry was constituted by the disciplinary authority. The inquiry was conducted ex parte, but the EO submitted his report and findings after a gap of approximately one year. It has been proven beyond doubt, and the disciplinary case file has been approved by the Competent Authority. The delinquent employee did not participate in the inquiry proceeding.

Before imposing punishment, such as removal from service, the nominee of the employee suddenly appeared and submitted a death certificate of the employee, claiming all terminal dues like PF refund, gratuity, and employment on compassionate grounds.

Questions Regarding Gratuity and Compassionate Employment

My question is, up to which date should the calculation of gratuity be done - the date of the signature of the Competent Authority or the date of death of the employee? Also, whether employment on compassionate grounds will be provided or not.

Kindly suggest what should be done, and if there is any relevant case study, it may also be provided.

Regards

As per Section 4(2) of the Payment of Gratuity Act, gratuity is payable. The employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned for every completed year of service.

Further, as per Section 2-A of the Act, completed year of service means:

An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as a break in service has been passed in accordance with the standing order, rules, or regulations governing the employees of the establishment), layoff, strike, or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.

Please refer to Section 4(1)(c) of the Payment of Gratuity Act 1972, which stipulates as follows:

(c) On his death or disablement due to accident or disease: Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

Provided further that in the case of the death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.

Therefore, if the employee dies during the course of a domestic inquiry, the Domestic Inquiry shall be completed ex parte, and gratuity should be calculated up to the date of actual working/authorized leave.

It should also be noted that the gratuity can't be withheld unless and until the disciplinary authority specifically mentions in the DA order and gives reason for withholding such amount.

Thank you for the quick and valuable suggestion. Another point I am awaiting your reply on is whether employment for the defendant on compassionate grounds will be provided. The disciplinary case file has already been approved by the Disciplinary Authority for removal from service. However, due to certain procedural lapses, the order of removal has not been communicated to the defendant. I am waiting for your reply.

Regards,

Compassionate Appointment Policy

Compassionate appointment is a policy decision, and there are no statutory rules or acts governing it. As the disciplinary authority has already passed the order, please communicate this decision. The dependents of the employee need to write a letter to the appellate authority or reviewing authority, requesting reconsideration of the disciplinary authority's decision. This should be done by considering the death of the employee and requesting that the compassionate ground application be taken into account.