Tragic Employee Suicide: How Can We Legally Support the Family's Demands?

Dear Seniors,

One of our factory workers committed suicide at his home due to family problems. He died in the hospital with severe burn injuries. His relatives, along with some political figures, came to the factory and demanded Rs. 50,000 for funeral expenses. However, we only paid Rs. 10,000. Now, they are insisting that we make a fixed deposit of Rs. 2 lakhs per head for his two kids and secure a job for his wife. We have been deducting EPF and ESIC since July 2012 for him. I personally want to assist his family. What are the best actions that can be taken? Is there a legal or statutory way to address this situation?

Waiting for your reply.

Thanks.

Company Responsibility in Employee Suicide

How is the company responsible for the suicide committed at his home? His terminal benefits will be given to his legal heirs.

Regards,
Pon

Employer-Employee Relationship and Responsibilities

The only relationship between the company and the person who committed suicide is the employer-employee relationship. Since the suicide occurred at his home, the company is not responsible for paying any compensation except for his terminal benefits, PF dues, gratuity amount if any, and any additional payment the company wishes to make (purely on compassionate grounds).

The company should also inform the local authorities of Law & Order, as he was working as a factory worker, about his suicide.

Thanks,
R K Nair

HR is not always about how to implement the rules; it's also about how you see the human in Human Resources.

The most you can do, if the workers really want to help the worker, is to take contributions from the workers, add the company's contribution to the same, and then make that a deposit in the bank. The interest earned can be utilized by the family. Also, the Provident Fund (PF) and Gratuity amount that will be received should not be handed over to the family; instead, make a fixed deposit in the children's names and then hand over the passbook to the family. This is a completely out-of-the-book suggestion that I am providing. This is only on humanitarian grounds that you would be making this gesture, ensuring that everyone knows about it.

Regarding Employment for His Wife

Make it clear that only if she is qualified for any job and there is a vacancy will she be absorbed. Make no promises in that regard. Also, if you have any contract labor agency, then if she does not meet your criteria, she can be shifted to those roles again on humanitarian grounds only.

I hope this is of some help to you.

Regards.

As Ashutosh's suggestion is just based on humanitarian grounds, you cannot consider it a right towards employment. If you wish to assist the employee, you can disburse his gratuity immediately as that is within your control. You can then make a fixed deposit of this amount. Simultaneously, you can proceed with EPF and ESIC as there are provisions for widows with children. (Please check whether it is applicable in cases of suicide.)

Regards,
Santosh Khamitkar

As per the provisions of the ESI Act, 1948, reimbursement of funeral expenses up to a maximum of Rs. 10,000 (Rs. ten thousand only) is payable, according to Rule 59 of the ESI (Central) Rules, 1952. No other benefits are payable to the dependents of the deceased insured person.

I wish to add one more suggestion in this regard. The EPS 95 scheme is applicable to the deceased employee's family. It can be processed to benefit the family members, in addition to the ESIC benefit.

Nothing to worry. First of all, no one should panic. The next of kin (NOK) will be entitled to benefits accrued through company policies, statutory provisions, and ex gratia if the company considers it. Due to the recent events, relatives are emotionally charged, but these emotions will subside with time. The company should have a lawyer present to ensure their responses do not imply any abetment to suicide, which is a criminal offense. Furthermore, the company should cooperate with the police.

The company is responsible if an accident or incident occurs in or on the way to the factory. In this case, neither of these situations is applicable. Although the company is deducting ESIC, the treatment part of the insured person (i.e., IP) can be covered by ESIC. ESIC can also provide funeral assistance for the insured person.

As per the law, there is no obligation to provide compulsory compensation to the individual. However, if the management and other workers are willing, they can contribute voluntarily.

With best regards,
Aniruddha Kale

Since the worker committed suicide at his residence, the company is not responsible for any additional benefits except to clear his legal dues, i.e., earned wages/salary, leave encashment, gratuity, interim bonus (as bonus becomes payable within 8 months from the closing of the financial year), etc. The management and coworkers, if they wish voluntarily on humanitarian grounds, can help financially, but it is not a legal right.

Assistance for Legal and Financial Settlements

The management should extend help in the early settlement of ESIC funeral benefit, which is Rs. 10,000, and admissible pension from EPF for his dependent wife and two elder children, and settlement of EDLI and EPF contribution.

Regards,
P K Sharma

I too agree with the suggestions given by Mr. P.K. Sharma in this thread. The employer's liability does not arise at all if the death occurs at his residence out of the workplace, whether it be natural or suicide. If you have paid him Rs. 10,000/- to meet his funeral expenses as goodwill, it does not attract any provisions of the law unless there is an agreement with the workers' union. You should not entertain any demands from the deceased family members. At most, you can settle his full and final account against the services rendered in the organization, including salary, other allowances, leave salary, and overtime wages, if any.

Office Order Preparation

You can prepare an office order stating that Mr. XXXXXX has expired on xxxxxx and his name has been struck off the company's rolls with regret, effective from xxxxx. Display the same on the notice board of the establishment and pay his applicable dues. It is the deceased wife's responsibility to claim Provident Fund and Pension from EPFO at her interest.

Regards,
Adoni Suguresh Sr. Executive (Pers, Admin & Ind. Rels) Retired Labour Laws Consultant

Handling Employer Responsibilities in Employee Death Cases

Not a painful deal from the employer's side. First, the employer can give the pending salary, bonus, leave, and gratuity benefits to the nominee. Generally, the employer believes that the nominee declared in ESIC and PF should be the same person. So, take a letter from the nominee stating that the person has died on the respective date and kindly request all the pending amounts to be given to them. Then pay him/her (most recommended by cheque).

Next, help them claim ESIC funeral charges, approximately $10,000.00. Also, assist them with PF department pension formalities. No financial burden or practice should come on the employer's side. If they come with political people, inform them that you will fully support all formalities in ESIC and PF. Do not make any big commitments; otherwise, it will set a bad practice in your factory/unit. That's my view.

Please go through the attached notes on 'Law & Procedure' relating to 'Funeral Expenses' under ESIC rules for your information and guidance.

For the other matters, I don't think you could fulfill all the requests being made, as much will depend on the deceased worker's family's conditions, economic background, immediate needs, and future plans. Your role would be limited to arranging the full and final settlement of his dues. It will be up to the widow and other dependents of the deceased to decide how to plan for their future. They would be grateful if you could assist in finding a job for his wife or children, provided they meet your compassionate grounds criteria. I suggest seeking guidance from past instances in similar situations and your HR policy. Care must be taken to prevent any opportunists from taking advantage of the money and benefits you are providing for the family. It is crucial as various entities, including unions, may exploit such situations for their own agendas.

Waiting for your response.

Thanks.

I deeply regret the mishap and express my sympathy to the family members. We are aware that committing suicide is an offense. However, considering the sympathetic circumstances, you can manage the funeral allowance from ESIC as suggested earlier by various contributory members, including Mr. Sharma of APEX management. Simply forward the medical reports to the ESIC branch office.

Compensation and Benefits

Regarding compensation, EPF will provide social security benefits to the family members through EPS, along with medical facilities from ESIC. You do not need to worry about compensation; you are not liable to pay a single penny.

Thanks & Regards,

Sumit Kumar Saxena

Death Benefits for Deceased Employee's Family

Death benefits that the deceased employee's family receives are as follows:

1. Funeral Benefit under ESIC - Rs. 10,000.
2. EDLI amount under EPF Act - 20 times the Basic+DA.
3. Widow pension and Children's Pension under EPF Act.

Regards,
Keshav.

If somebody commits suicide, especially at home, you are not required to pay anything beyond their dues. The amount of ₹10,000 that you paid could be recovered from his full & final settlement. However, if you paid out of compassion or sympathy, it is a different issue. Legally, he is not entitled to any compensation for committing suicide, especially at his residence. You can flatly refuse. If they choose to pursue this further, let them go to the courts, and you will not face any problems. Even his life insurance policy may not pay out, as he contributed premiums.

If you want to help his family or dependents/nominee, please ensure that his PF, gratuity, and full & final accounts are settled properly. Also, make sure that his dependents (widow) receive a pension from PF as she will not receive any pension from ESI.

Regards,

It is good to see that everyone is giving their well-experienced suggestions, which are valuable in every aspect. When dealing with a death case, whether the individual passed away while working or at home, the initial sympathy naturally goes to the deceased's family and their future well-being, along with their benefits, laborers/workers, and local leaders. Unions often compel management to contribute something to assist the deceased's family in maintaining their livelihood.

Initially, it is advisable to contact the District Authority to appoint an Arbitrator for this case. Present all relevant documents, especially the statutory ones, to the Arbitrator and await their decision. It is crucial to follow the decision made by the Arbitrator for the smooth functioning of production and the work environment, as it directly impacts the work family.

The suggestion for a single arbitrator is made with the belief that both the employer and labor should contribute equally to the organization's prosperity. If labor feels that management is only exploiting them, the organization may not thrive and could suffer losses.

Following the arbitrator's decision will promote harmony in the workplace and facilitate a positive work environment.

Thank you.

One of our employees committed suicide. He was an unmarried man with dependent parents. Is there any possibility of ESIC pension? Kindly guide me.

Dear Mr. Stephen, our learned members have already provided their opinions. The factory or company is not responsible for paying any compensation to anybody for such incidents that occur outside of the work premises and outside of working hours. The Workmen's Compensation Act of 1923 will only apply to accidents resulting in minor/major injuries, temporary or permanent disablement, or even death that occur at the worksite and during working hours.

Whatever you have paid is based on humanitarian grounds and not as per the law. You do not need to pay any additional amount or compensation to the heirs of the deceased. You can settle his final settlement, including PF, Gratuity, Bonus, ESI, or any other benefits, to the legal heir upon submission of the death certificate and succession certificate issued by the competent authority.

SUGURESH ADONI
Rtd. Sr. Executive (Personnel & Ind. Rels)
Labour Laws Consultant