Gratuity Payment Dilemma: How to Handle a Nominee Dispute After an Employee's Passing?

Gratuity Payment Issue: Seeking Guidance

Please help guide me in a unique issue I have faced. There was an employee who nominated a girl, mentioning her as his wife and stating they got married in 2008 (he mentioned a date) but did not submit any marriage proof. In 2012, the employee passed away due to cardiac arrest. Upon checking about the nominee, we discovered that they did not get married; their parents had only promised each other about their children's marriage in the future. We also did not receive any application for Gratuity.

After some time, the father of the deceased employee submitted an affidavit stating that the girl nominated by his deceased son has married someone else, and the payment of Gratuity should be made to him as his deceased son and the girl never lived together.

Current Concerns and Questions

- Gratuity payment has not been made even after 2-3 years of the employee's death.
- The deceased employee nominated a girl as his wife, even though they were not actually married.
- The father has submitted an affidavit but has not produced a "Legal Heir Certificate."

Kindly suggest what we can do.

Regards,
Vijay

Dear Vijay,

If a girl is not able to produce any documents and it is confirmed from your side that they were not actually married, then you should pay the gratuity amount to the deceased father.

Thanks.

Payment of Gratuity Act, 1972: Nomination Issues

Section 6(3) of the Payment of Gratuity Act, 1972 explicitly declares the nomination of a person who is not a member of the family of the employee as void. When you have a genuine doubt about the nominee, you ought to have rejected it when the employee was alive, or you ought to have deposited the amount with the Controlling Authority under the Act to avoid interest burden as well as ensure payment to the family of the deceased. So, deposit the amount under section 7(4)(a) together with simple interest at 10% from the date gratuity became due until the date of deposit.

Regards,
Vijay

Succession certificate will be needed for the disbursal of Gratuity. The nomination made in favor of the "girl" is invalid since she is not a family member as defined in the act.

The suggestion of Shri Umakanthan to deposit the amount of gratuity with the controlling authority needs to be done immediately until the succession issue is sorted out.

Dear Vijay,

The payment of gratuity should be legally examined and processed. Kindly ask the claimant to submit a succession certificate before initiating the gratuity payment.

Regards,
RDS Yadav
Labour Law Adviser
navtaranghrs@gmail.com

When the gratuity amount is deposited with the controlling authority, it is his responsibility to disburse the amount to the proper person.

Mr. Vijay,

I too agree with the conclusion and opinion of our friend, Mr. Umakanthan M. To avoid any legal complications, it is advisable to deposit the amount payable to the successors of the deceased with the controlling authority as defined in the Payment of Gratuity Act.

Adoni Suguresh Labour Laws Consultant

The role of the present employer is limited. The money should have been deposited with the controlling officer. The controlling officer will take the right decision backed by a legal study of who is the entitled person to receive gratuity. Anyway, it cannot be the lady mentioned.