There are a few legal issues in it. First of all, the deceased being an employee of the security agency, your role is limited. But you have to check whether on the date of joining itself, the security agency has registered him under ESI and taken 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 a risk, because primarily the agency (contractor) is responsible for enrollment of each employee he hires on the same date of his joining itself and secondarily, when you find one new person being engaged in your plant or establishment by the contractor, you should have collected the relevant documents which shows that the new person is covered under the ESI and or EPF.
Now, if his name has not been figured any where in ESI or PF, it is difficult for his dependants 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 organisation he will get the status of employee and that also on getting himself registered, and from that date onwards, he will start getting the benefits of the contributions paid while he was with the previous employer. Only thing which 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 have 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 contribution 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 of the genuineness of the claimants, ie, 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.
Madhu.T.K