Employee Death at Home: Is the Company Liable for Leave and Gratuity Payouts?

Respected seniors, please let me know if an employee dies at his home, will the company be liable to pay his earned leave (EL) and gratuity if he has not completed 240 working days in our company. If the company is liable, could you please explain the process?

Thank you.

Statutory Liability for Employee Benefits

If the employee has not completed 240 days of service in total, then there is no statutory liability to make any payment. If the establishment wishes to make any payment out of its social commitment, it can voluntarily do so. If the facts differ, please provide them in full.

Gratuity and Other Benefits in Case of Employee Death

In the case of gratuity, there is no qualifying limit for the service period. If the establishment is covered under the Payment of Gratuity (POG) Act, 1972, then gratuity will be payable to the nominee or legal heirs of the employee.

The due earned leave (EL) and outstanding salary will also be payable to the nominee or legal heirs of the employee.

If covered under the Employees' Provident Fund Organization (EPFO) and the employee is not an excluded employee, then the Employee's Deposit Linked Insurance (EDLI) and pension benefits are also available for the family members.

Seniors, please shed more light on the matter.

I concur with the replies of the above two learned members.

Death of an employee dying in harness

Death of an employee, whether natural or otherwise, outside the zone of his/her employment both in time and space does not create any statutory liability on the part of his/her employer for any compensation.

Terminal benefits

Other terminal benefits like statutory gratuity, encashment of EL, etc., are payable to the deceased's legal heirs subject to conditions of eligibility prescribed in such laws.

Minimum service requirement

The requirement of a minimum of 240 days of service is one among the standard factors adopted only for the purpose of computation of certain terminal benefits like gratuity and retrenchment compensation. Of course, the individual employer has the discretion to pay better compensation on humanitarian grounds to the bereaved family of the unfortunate employee as suggested by Mr. KK!HR.

Disbursement of benefits

But, the employer should ensure disbursement of the amounts to the right persons based on documentary evidence like nomination already made by the deceased, legal heir certificate issued by the appropriate authority, etc. In case of any dispute, the employer should deposit the amount with the respective statutory authority with a request to effect payment to the right person.

The employer has to pay unpaid wages, if any, earned leave (EL), and gratuity. As per the Gratuity Act, gratuity is payable up to the date of death, irrespective of whether the employee completed five years or not. Even if an employee dies at home, in the case of death, the completion of 240 working days hardly matters.