Gratuity Eligibility After Employee Suicide: Can the Family Claim Benefits?

Dear Members,

One of our company's (contractor) employees worked at a PE establishment (principal employer) since February 2016. Unfortunately, he passed away by suicide. In this case, are his nominees/surviving family eligible for gratuity? Please advise.

Is your establishment covered by the Payment of Gratuity Act? If not, are there any schemes for the payment of gratuity to the employees of the contractor? This information is required for responding.

For gratuity claim, five years of continuous employment is the basic requirement.

Yes, sir, our establishment is covered under the Payment of Gratuity Act. Our employees are deputed at our clients' (principal employers) sites across India.

The Payment of Gratuity Act states that if an employee dies due to any disease or accident, their nominee or legal heir is entitled to gratuity. I believe that the completion of 5 years of continuous service may not be necessary in cases where the termination of services is a result of death.

However, I have a question regarding cases of suicide. Kindly provide advice.

5 years are not mandatory in case of death. Hence, gratuity is payable to the legal heirs/nominees.

The claimant must submit a succession certificate to the employer showing proof of being the legal successor/heir of the deceased employee. Yes, in the case of death, a service duration of 5 years is not a requirement.

Regds,

Succession Certificate is required only when there is a dispute for the claimant/nominee. A Legal Heir Certificate and an Indemnity Bond may help to settle the Gratuity payment.

Regards,
M K Rath

Gratuity would be payable on a pro-rata basis in the instant case as this employee is deceased now, and the gratuity act does not consider the circumstance of death for deaths occurring in less than five years.

Secondly, this amount would be paid to the designated nominee, or if there is no nominee, to the heir of the deceased.

If the gratuity is managed by LIC, then the nominee or legal heir would receive the full gratuity until his retirement age.

The circumstances under which gratuity becomes payable are enumerated under the Payment of Gratuity Act. Death is one of them. The Act does not specify that death should have occurred under specific circumstances. So, the presumption is that whatever the cause of death, gratuity becomes payable. Here, the cause of death is suicide. The Act does not say that if a person commits suicide, gratuity cannot be claimed. Therefore, my view is that in this case, gratuity is payable subject to fulfilling the other conditions.

Regards