How Do You Handle Indemnity Bonds for Settling Dues After an Employee's Passing?

My name is Preetha Pradeep, and I work in HR. I am in need of a format for an indemnity bond that is to be collected from the legal heirs of a deceased employee. This bond is required as we have to settle the final dues, including gratuity (F&F).

Hi, Please collect all proofs from the legal heirs, such as the legal heir certificate, marriage registration certificate, and a joint photograph of the deceased (employee) with the spouse. You may use the following format, but this is only a supporting document.

We, ______ (Father), ________ (Mother), _____ (Wife), and _____ (Daughter/Son) of Late.____ respectively, hereby declare that Late.____, who had worked in your organization, passed away on ______ at ______, due to _______. He is survived by his Wife ___, Daughter ___, Father ___, and Mother ___. We are all Late._____ dependents. We hereby request M/s._____ to release all eligible legal dues, including the Gratuity amount, in the following manner, and we have no objection to the following distribution:

1. Father's share Rs.___ in the name of Father "____"
2. Mother's share Rs.___ in the name of Mother "___"
3. Wife's share Rs.___ in the name of Wife "___"
4. Baby's share Rs.____ in the name of the Baby's Mother, named "______"

We agree and confirm to you that we shall make no other monetary claim or otherwise of any nature towards any dues from M/s._____.

Date: _________________
(_____)
_____________________
(_______)
_____________________
(________)

In case of a dispute among nominees in sharing the settlement amount, ask them to approach the civil court and come with a court order. The court will examine the background of nominees and advise the % of settlement to be paid to each nominee.

As regards gratuity, if there is no existing nomination, the proper course is to deposit the amount with the Controlling Authority under the PGA 1972 (the local Labour Officer) and also provide the full details of the family members available with you. Such authority has the legal power to pay the gratuity to the family members.

As regards F&F settlement, it can be paid to the family members, and an Indemnity Bond can be used, but its practical utility is suspect.

Dear CiteHR Member Ms. Preetha,

It may be noted that full and final settlement in the event of death has to be decided on the basis of the nomination made by the employee in respect of PF, etc. Care should be taken to obtain copies of proof of identity documents, e.g., Aadhar Card, etc., of the nominated persons. Although there is no legal requirement to obtain an indemnity bond when valid nomination(s) exist on record, it is advisable to be on the safer side to obtain an indemnity bond. The format given above will serve the general purpose requirement; however, an Indemnity Bond specific for the purpose is more detailed and can be obtained from the legal department of your company/legal consultant or by a request from us.

It is also relevant to mention that in cases where there is no valid nomination, then it is definitely advisable either to obtain a Surviving Member Certificate issued by the District Administration or a succession certificate from the court of law.

You are requested to validate the opinion posted on this thread in reply to your query.

Regards, Chandramani Lal Srivastava Master Consultant [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] New Delhi/22.11.2022/10:23 pm

Thank you for all the valuable information regarding the various care that needs to be taken while settling death claims.