Navigating Benefits for a Contract Guard Who Passed Away on His First Day: What Steps Should We Take?

Compensation and Benefits for Deceased Contract Guard

A guard (on contract) died on the first day of his duty while on a night shift in our firm. What benefits and compensation is he liable to receive for one day of his duty, and how? It was a natural death as per the postmortem report.

Contractor Responsibilities

What does the contractor need to do, such as filing claims with ESIC and PF? The guard had his PF account number with his previous employer, i.e., before joining our firm.

Kindly help.

Regards,
Sanjiv

If he has a previous PF & ESIC account, he may be eligible to receive benefits under the same, subject to sufficient contributions in the account.

Regards,
Tushar Swar

Eligibility for Benefits Under ESI and EPF Acts

The nominee is eligible for various benefits under the ESI and EPF Acts.

EPF:

1. The nominee is eligible for a pension under the EPF Act. Please fill out Form 10-D and submit it to your SRO.
2. The nominee is eligible for EDLI under the EPF Act. Please fill out Form 5(I.F.) and submit it to your SRO.
3. The nominee is eligible to withdraw the EPF amount. Please fill out Form 20 and submit it to the SRO office.

ESI:

1. The nominee is eligible for funeral expenses.

Dear senior, I hope this is correct.

Thank you.

Legal Issues and Responsibilities in Employee Benefits

There are a few legal issues in it. First of all, the deceased being an employee of the security agency, your role is limited. However, you need to check whether, on the date of joining, the security agency registered him under ESI and took steps to get his PF transferred from the previous employer by filling Form 13. If not, then both the agency and you will be at risk because primarily the agency (contractor) is responsible for the enrollment of each employee he hires on the same date of his joining.

Secondly, when you find one new person being engaged in your plant or establishment by the contractor, you should have collected the relevant documents which show that the new person is covered under the ESI and/or EPF.

Now, if his name has not been figured anywhere in ESI or PF, it is difficult for his dependents to get funeral benefits from the ESIC and EDLI from PF. Both are not available to a person who is out of employment. If he has not been registered, naturally, he should be regarded as a left employee, though once he joins another organization, he will get the status of an employee, and that also on getting himself registered. From that date onwards, he will start getting the benefits of the contributions paid while he was with the previous employer. The only thing that will support his dependents is that it is not the duty of the employee to make sure whether he gets continued coverage of these social welfare schemes, but it is the responsibility of the employer to make everything in order. In a particular case, the court has also said that ESIC cannot escape from liability of paying benefits just on the ground that the employer had failed to register an employee or failed to pay contributions in respect of the employee. This implies that even if the documentation part is delayed due to any technical reasons, an employee or dependents of a deceased employee should not be denied the benefits to which they are entitled.

Legal issues are not over with the above. In the absence of any declaration or nomination, the employer should also get satisfied with the genuineness of the claimants, i.e., dependents. This is another headache for the contractor. For each and everything, the contractor, the employer, will have to depend on the records of the previous employer.

Regards,
Madhu.T.K

To add to what Madhu said, please check the contribution status under PF and ESI. When was the last contribution paid? If it has been paid in full until the last month, then the contribution for the current month is only due now, and there is a very good chance of compensation. The law does not state that if an employee dies on the first day of employment, no compensation is payable. Please reply after obtaining details of the contribution status.

Regards,
KK

Suppose a company has recruited a guard who is above 60 years old on a retainership basis. Is he exempt from the deduction of ESI and EPF contributions? If not, who will be responsible for the nominees' benefits in case of the guard's death (natural or accidental)?

Kindly advise.

Regards,
Akhay

All are given positive ideas. It is advisable that whenever an employee joins, we must obtain their signature on the declaration form for both PF/ESI for safety purposes. If the employee is working under a contractor or on a daily wage basis, we should also obtain an unnamed insurance policy with coverage for limited employees for emergency situations.

Regards,
PBS KUMAR

Please clarify the following points:

- Whether the employee was directly contracted with you or with the Contract Company?
- If with the Contract Company, does the contract specifically extend to the deceased guard?
- Who was contributing to his PF and gratuity? Also, describe the nature of his work and the time at which he passed away. Were medical facilities provided in case of an emergency?

Because a heart attack is considered a natural death, it can be claimed if it occurred during working hours, as per recent judgments from the Supreme Court.

Regards,

I fully endorse Shri KK Nair's view. He is eligible to receive ESI benefits based on his current/last IP Number, as well as PF. Even though the responsibility of the Principal Employer arises only when the Contract Employer fails to meet the legal obligations for contract employees, on compassionate grounds, the management of the company can consider suitable compensation for the family of the deceased worker.

Thanks,
R K Nair