Tragic Loss Abroad: Should Our Company Compensate the Family of a Top Executive?

Dear All,

I work with a logistics company as an HR Manager, and one of our top executive officers was killed during a visit abroad. The visit was part of one of our projects happening abroad.

From our company's side, we had covered all the expenses for moving the deceased body from abroad to his hometown, and we had provided his family with the group insurance amount. Now, his wife and child are approaching the court to seek compensation from our company.

Compensation Inquiry

Do we need to pay compensation to his family? Does he fall under the Employers' Compensation Act? His monthly salary was more than $80,000.

Regards,
Xavier

As per Sec 53 of the Workmen's Compensation Act 1923:

"Compensation Under the Workmen's Compensation Act"

"An insured person or his dependents shall not be entitled to receive or recover, whether from the employer of the insured person or from any other person, any compensation or damages under the Workmen's Compensation Act, 1923 or any other law for the time being in force or otherwise, in respect of an employment injury sustained by the insured person as an employee under this Act."

As he was already covered under group insurance and you have already received the insurance amount, you are not responsible now to compensate his family from the employer's pocket.

Regards,
S. Roy

What you have quoted is misleading. It might lead to wrongful actions being taken by the concerned member. The Workmen's Compensation Act of 1923 has now been renamed as the Employees' Compensation Act. There is no Section 53 in it, as quoted by you. Prima facie, a reading of what you have quoted implies that it is not about the Workmen's Compensation Act.

Kindly ascertain from your notes/references whether you are referring to the Employees Compensation Act or the Employees State Insurance Act of 1948. Can an employee receiving a salary of Rs. 80,000 be covered under the ESI Act?

Warm regards.

Compensation Under the Employee Compensation Act

Compensation under the Employee Compensation Act is available only to employees as defined under the Act. The top executive officer does not fall under this definition. Salary is not a condition for coverage. Regardless of the salary used for calculating compensation, it will be restricted to Rs. 8000 per month.

Regards,
[Name Removed For Privacy Reasons]

I would like to draw your attention to my reply to discussion no. 418525 regarding whether a software engineer is an employee under the Employees' Compensation Act, 1923. You have just mentioned that the deceased was a top executive—if he was predominantly discharging administrative functions, he was not an employee.

Thank you for your input. Please provide clarity on the following points:

- He was our Group Head for Marketing. Does he fall under the employee compensation act as an employee?
- Our company has already provided a group insurance amount to his family. Are we obligated to pay additional compensation to his family apart from that amount? His wife has approached our company seeking compensation.
- He worked with us for more than 5 years and passed away during an assignment abroad due to a robbery attempt.

Thank you.

Regards,

Compensation for Deceased Employee Abroad

I work with a Logistics Company as an HR Manager, and one of our top executive officers was killed during a visit abroad. The visit was part of one of our projects happening abroad.

From our company's side, we had covered all the expenses for moving the deceased body from abroad to his home place, and we had provided his family with the group insurance amount. Now, his wife and child are approaching the court to seek compensation from our company.

Do we need to pay his family compensation? Does he fall under the Employers' Compensation Act? His monthly salary was more than $80,000.

Xavier

How much compensation or insurance amount has been given to the nominee of the deceased person? What about gratuity, earned leaves, and salary settlements?

From our side, we had released only a part payment of his outstanding dues, including salary, gratuity, and group insurance because our company lawyer suggested we collect a succession certificate.

Dear Xavierr,

The intentions of your company do not seem to be bona fide. Why was only a part payment released, knowing fully well the hardship the family must be undergoing after the on-duty death of its earning member? And now the company is trying to avoid payment of any compensation for death during the course of employment!

Why is there a need for a succession certificate here? What about the nominations as given by the deceased employee? Why was this simple routine procedure referred to the company lawyers (unless the company wants to shy away from its responsibility and dues)?

This was a regular HR action. What happens if the company lawyer gives the opinion that unless there is a decree by the court, no payment needs to be done? Would you wait until the aggrieved party files a court case and then wins the case after some years? (Meanwhile, the ex-employee's family suffers!)

It is impossible to bring back a dead employee to life, but the least an employer can do is pay all the dues of the deceased employee gracefully to his dependents. It is very deplorable for a company to withhold final payments even in the case of death on duty.

Regards

I fully agree with Rajkumar Hansdah. Can anybody bring back the dead person alive? Ask if this case happened to you or any other top people who are now playing tactics to add further hardship to the deceased's family by delaying or denying the due benefits (as you mentioned a part payment is released).

This unfortunate executive died in the course of employment.

Why is a Succession Certificate Needed?

Has any third person come forward to claim as his family? Or had he not mentioned in his PF/Gratuity form any nominee?

Please note, HR, though considered a support function, also functions as the brand manager of the organization. If you treat your employees well, they will spread a good image of your company. That, in turn, is a branding process of your organization without any advertising expenses.

You think in the future if you want to send any other employee abroad with any assignment, would he/she go knowing that one of their colleague's family is suffering now due to the company's lethargic approach? What image will your employees carry due to this? Will they refer any of their friends/family members to your company for employment? Do you think the current employees would like to stay back in your company happily due to these types of unhealthy attitudes? Would you, as an individual, like to continue (from your heart) knowing this incident?

Your employees are not machines to throw away.

Prompt Your Management to Act with Compassion

Prompt your management to think with a human heart and request to release at least whatever is due as per eligibility, if situations are not complex. Any further contribution from the management side to his family will always be a good Samaritan act.

Please remember - all Acts, Rules, Laws, etc., are drafted to ensure minimum benefits to the sufferers. If you offer above this bar, no law will punish you, but you will always be remembered by all.

Regards,
Suresh

Concerns Regarding Succession Certificate and Compensation

First of all, asking for a succession certificate from the dependent is nothing but time-consuming. It is not easy to get a succession certificate in a day or two; it will take at least six months to one year. Under these circumstances, the wrong message is being conveyed to the existing executives, managers, or staff members.

Compensation Under Workman's Compensation

Regarding compensation under workman's compensation, management could have been proactive in providing benefits to the manager who died while on duty.

Secondly, recently, my company has obtained a workman's compensation policy from a government insurance company. Under this policy, all employees, including managers, are covered. The benefits will be provided only in the case of death or injury while on duty. Here, the distinction between managers and employees does not apply.

Legal Ambiguity

Thirdly, the law is silent. If the law states that he was not an employee as a senior executive, then the law does not clarify whether he was the owner of the company.

Kindly discuss this matter with your management and resolve it amicably. This is a critical situation where everyone is observing the actions taken by management.

Thank you.

Regards,
Deepak

The most important question we need to ask ourselves is whether the laws are made to assist us or to defend us. We cannot become heartless under the pretext of what the law says. We also cannot relax by paying a minuscule amount for group insurance.

We are the face of the employee as well as the employer to each other. Delaying procedures due to documentation issues will send a very negative vibe to the existing staff. You mentioned that the executive died in a robbery attempt on an official tour and had been with the company for the last five years. It's a pity that we let our staff's families suffer when stability of five years for a marketing professional is not common in today's competitive market.

Recommendations for Management

As an HR professional, I would recommend a few options to the management:

- Offer employment to the spouse if the deceased executive was the sole earning member of the family.
- Offer at least the basic salary as monthly compensation to the family until the deceased executive would have reached retirement age.

Please keep us informed about your management's decision. I am sure all of us are awaiting a win-win solution.

So often, the humane side of Human Resource professionals takes a backseat in the pursuit of pleasing management. It is in situations like this that HR should stand up and play the most humane role. Anyhow, our esteemed members have already posted valuable inputs. Please consolidate the suggestions and present them to your management team. Strive to take appropriate action that will benefit the deceased employee's family and also leave a strong impact on the employees, thereby increasing their sense of belongingness towards the company.

This is a sensitive issue, and therefore, the pace at which the company handles this matter is very important.

ALL THE BEST!!

Regards,
Gia

There is no Section 53 in the Act, and nowhere is it mentioned that the top executive is not liable for compensation. Based on my study of the Act, it is stated that every employee of the company who meets with an accident and causes death during working hours is liable for compensation as per the Act.

Under the amended Employee Compensation Act, all employees are entitled to compensation as if their salary is INR 8000 per month. You are required to deposit the same with the concerned Workmen Compensation Authority, i.e., the Deputy Commissioner of Labour, in case of an accident that occurs while on duty.

Thank you.

Dear all the learned contributors to this thread,

I understand your concern for the deceased and his bereaved family. Material comforts and monetary support aside, the care and affection provided by the breadwinner of the family to his wife and children is irreplaceable. However, I respectfully disagree with certain friends regarding the applicability of the Employees' Compensation Act, 1923 to the deceased employee due to the limited scope of the definition clause in conjunction with the detailed Schedule II. Whether right or wrong, unfortunately, any Social Security Labour Legislation is selective in its application and minimal in its compensation scales. Therefore, let's set aside the legal aspect for now.

I sincerely hope that Mr. Xavierr can step up as a true savior and influence the management to shift their focus from strict legal compliance to compassionate consideration. They should compensate the bereaved family in a manner that honors the sacrifice made, as suggested by the members. Such a gesture of generosity from the management aligns with its corporate social responsibility, as employees are an integral part of society.

Thank you.

Understanding Compensation Obligations

First of all, understand that what is provided by law in these types of cases is the minimum. There is no maximum limit; the maximum is the magnanimity of the management. See what the Tatas have done for the victims of the 26/11 Bombay attack.

Eligibility Under the EC Act

Now, about his eligibility under the EC Act, please read Section 2(dd) and Schedule 11 of the EC Act 1923. Further, the length of service is immaterial.

For further discussion, you can contact:

Varghese Mathew
[Phone Number Removed For Privacy Reasons]

Compensation for Employee Loss

He lost his life, and this is a significant loss for his family. Why deny the compensation? There are companies that provide life cover for employees (up to 3 times the annual CTC). Why not start good practices? After all, he must have worked hard for your company.

Regards

Eligibility for Employee Compensation for Executives

Even if an executive is part of the top level, they are still an employee and should be eligible for employee compensation. However, the amount or facilities may vary depending on the level. All executives, from junior to senior or top level, are eligible for employee compensation as per company norms and the employment agreement.

As stated by other members, the employer should take responsibility by ensuring that complete benefits are provided to the family members of the deceased employee, whether it is a top executive or an entry-level individual, as per the act.

Employees' Compensation Act

In this case, the employer is liable to pay the compensation. I have attached the Employees' Compensation Calculator for calculating compensation in cases of death, Permanent Total Disablement, or Permanent Partial Disablement. I picked this up from an earlier posting, and I believe it would be useful.

Below are all the aspects that should be taken care of and need to be settled with the family members:

1. As per the Employee's Compensation Act.
2. Gratuity: Monthly Basic * 15/26 * Number of Years of Service due (Example: if the person's age is 30 and the retirement age is 58, then we should take 28 years for the calculation).
3. Leave encashment.
4. Provident Fund: By working with the department.
5. All salary dues, etc.

Thanks and Regards,

Srinivas Marnade

Dear Varghese Mathew,

Thank you for the note and for correcting my response. Could you please share the correct calculation, which would be helpful? We have paid one of our deceased employees based on the provided calculations. The calculation was confirmed by our consultant; therefore, I believed it was the correct method of calculation.

Thanks and Regards,
Srinivas

I agree with both of your comments. However, I think their company may be using the formula of the number of years completed or the number of years of service left, whichever is higher (in case of death in the course of employment). In such a case, it would be legal as the employee gets more than that stipulated in the POGA 1972, and it should be appreciated if indeed it is the case, as there are very few good companies that give more benefits than the minimum as stipulated in any Act.

Warm regards.

Dear All,

Thank you for your input. Please provide clarification on the following points:

- He was our Group Head for Marketing. Does he fall under the employee compensation act as an employee?
- Our company provided a group insurance amount to his family. Are we obligated to pay additional compensation to his family apart from that amount? His wife has requested compensation from our company.
- He worked with us for over 5 years and passed away during an assignment abroad due to a robbery attempt.

Please refer to Section 2(dd), point number (ii), and subpoint (d). A person recruited for work abroad by a company registered in India, or his legal heirs, are eligible for compensation.

Thank you.

I agree with your views. He could have used this opportunity to compensate the family of the deceased employee adequately, instead of referring to legal provisions. By taking this kind of action, the loyalty, emotional attachment, and feeling of belongingness of other employees could have been enhanced.