Handling Employee Separation Due to Death: What Key Points Should a Policy Include?

Hi Anjali, I need to draft a policy for handling separations from the organization due to death. Please suggest what points should be covered.

Thank you.

Policy for Handling Employee Deaths

On the natural and unnatural death of an employee on the payroll, you can include provisions for eligible PF and EDLI benefits, gratuity benefits, ESIC benefits if covered, medical insurance benefits, superannuation, any pending leave balance, and any other welfare benefits the organization may choose to provide, such as one day's salary for employees on a voluntary basis.

This policy for deceased employees should only be implemented if the company is willing to offer benefits beyond what is legally required; otherwise, it is not necessary.

Subject: Separation from Organization Due to Death

In addition to what was specified by the earlier member, you can include pension benefits as per the 1995 Act and gratuity benefits as per the 1972 Act. If your company has established a Group Gratuity Trust with LIC, then that benefit will be calculated as if the employee has completed 58/60 years. Additionally, ex-gratia, if any, provided by the company, or a welfare fund, if any, maintained by the organization, can be included. Based on management policy, you can allocate funds for this purpose.

Regards,
S. D. Patil

This is in addition to what other senior members have said. First and foremost, the "death" of an employee is not a separation. You need to investigate the death of the employee. Is it attributable to the employer? If yes, then the compensation will be higher. For a better understanding, it is advisable to conduct an inquiry. As part of the inquiry, assign some employees to handle the deceased employee's final clearance. Have the deceased employee's family surrender the company's assets. Based on this inquiry, the office can provide a report on what is outstanding against him/her, whether to take "write-off" action, or initiate recovery for the non-return of the company's assets; the decision lies with the management.

Compensation Considerations

Depending on the designation, you need to determine whether the deceased employee is eligible for compensation under the "Workers Compensation Act." It would be beneficial to seek advice from a labor lawyer. You may also consider visiting the labor office to gather first-hand information.

Regards,
Dinesh V Divekar