Navigating Employee Nominations: How Do You Ensure Legal Protection for Settlements?

Dear All,

Nomination Process for New Employees

How do you get a nomination from an employee who joins our company? In case of any unforeseen situations like the death of an employee, how can we protect the employer for easy settlement of legal dues such as final settlement, gratuity, superannuation, and insurance, which will stand legally as well?

Challenges with Legal Heir Certificates

We can ask family members to obtain the legal heir certificate, but it's a lengthy process, and the family may have to go through this unnecessarily. If anyone has any format or practice for the nomination process, please share the details.

Disbursement of Benefits Under EPF, ESI, and Gratuity Acts

For disbursements of benefits under the EPF, ESI (if applicable), and Gratuity Acts, there are different forms prescribed by law. You are expected to have them filled at the time of joining.

Of these forms, ESI and EPF are to be completed online, whereas the one meant for gratuity is required to be submitted in Form F, which is attached here. You can also obtain the hard copy of the EPF (Registration cum Nomination Form 2).

Nomination Process for ESI

When you enroll an employee under ESI, the nomination is a mandatory field without which you cannot register an employee. Though not commonly collected nowadays, the form is also attached here.

Gathering Nominee Details

Along with these, you can gather the details of nominees in the joining documents, either in the application for employment or in the joining report, by providing necessary columns in the forms themselves. This information could be used for the easy settlement of unpaid salary and leave balances.

You may collect various nomination forms like Form F for Gratuity and Form 2 for PF/Pension (now employees need to update the nominee details through UAN login with photo and bank details) and preserve them in the employee's personal file. In the case of death, a Legal Heir Certificate should be submitted by the nominee of the employee to claim benefits. The reason for this is that an employee who joined 10 years ago may have originally nominated someone at the time of joining but could have since gotten married, divorced their partner, or remarried due to the demise of a partner, among other reasons. There could be many scenarios, and hence collecting a legal heir certificate will be the correct process. In case of a dispute among nominees regarding sharing the claim amount, all nominees can be advised to obtain a Succession Certificate issued by the Court.

You may also prepare a general nomination form duly printed on a Rs. 100/- stamp paper and ask the employee to confirm who will be the eligible nominee in case of death during the course of employment. Although this cannot be used as a substitute for a legal heir certificate, it can serve as a valid legal document in case of any disputes among nominees and new claims from any other third party.