Handling Full and Final Settlement When an Employee Passes Away Without a Nomination: What Steps Should I Take?

Dear Experts, please provide guidance on the payment of full and final settlement in the event of an employee's death.

Payment Procedures in the Absence of Nomination

At the time of joining, the employer did not obtain any nomination from the employee. Now, the payment of gratuity, leave, and bonus needs to be addressed.

Eligibility and Process for Payment

How can I proceed with the payment, and who is eligible to receive it? The employee's family consists of five members: a wife, two children, and parents.

Payment Procedures in Case of No Nomination

In case of no nomination, the best course is to deposit the gratuity with the Authority under the Payment of Gratuity Act (PGA), specifically with the Labour Officer of the local area, along with the details of family members. He is empowered to make the payment to the heirs.

Handling Other Payments

Regarding other payments like bonus, leave encashment, any unpaid salary, etc., make payment to the Provident Fund (PF) nominee if available, or pay to the claimant if there is no dispute. The wife is the natural guardian of the children. If the parents are also staying together, make payment to the wife. Otherwise, ask them to create a joint account where you can pay and discharge your obligation.

If there is no nomination, obtain a request letter from his wife on behalf of all the legal heirs. You can make all the payments to his wife, but you should get a no-objection certificate from the other legal heirs. Ensure you get the signatures of all the legal heirs on the full and final settlement papers.

Thanks

Ideally, you need to obtain a Legal Heirship certificate, which is issued by the Tahsildar of the jurisdiction. With this certificate, you can legally proceed with the payment as stated. The legal nominee ideally includes the first wife, children, and dependent parents if they are alive, in that order. This sequence helps to avoid any disputes. Ensure that the deceased individual did not have a second wife or any other potential heirs who could make claims. Legally, this certification will hold as it is issued by a certified authority after proper verification.