Dear Leaders,
Query on Employee Benefits Distribution
One of our lady employees has passed away.
Case details:
Nominee: Son, 17 years old
Husband: Deceased
Employee service period: 22 years
To the best of my knowledge, according to the law:
1. Pension is only applicable to the son, even though the employee's mother and father exist.
2. All amounts, such as gratuity, PF, and other schemes, are entitled to the son, even though he is a minor.
3. A guardian certificate needs to be attached because the nominee is a minor.
Please help me. If anything mentioned in the above points is wrong or missing, also consider from a legal perspective if I am providing funds to the correct person.
Please suggest legal references for the case, if any, for my future backup.
Thanks
From India
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3Query on Employee Benefits Distribution
One of our lady employees has passed away.
Case details:
Nominee: Son, 17 years old
Husband: Deceased
Employee service period: 22 years
To the best of my knowledge, according to the law:
1. Pension is only applicable to the son, even though the employee's mother and father exist.
2. All amounts, such as gratuity, PF, and other schemes, are entitled to the son, even though he is a minor.
3. A guardian certificate needs to be attached because the nominee is a minor.
Please help me. If anything mentioned in the above points is wrong or missing, also consider from a legal perspective if I am providing funds to the correct person.
Please suggest legal references for the case, if any, for my future backup.
Thanks
From India
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Dear Mr. Himanshu Saraiya, I am unsure of the legal provisions in this matter, but could we advise the son to wait until he turns 18 before filing a claim? This approach could potentially alleviate any legal complications.
While this may result in a delay in claim settlement, it is important to note that since the son is a minor, all terminal benefits will be received by his legal guardian. However, how can we establish who the legal guardian is? Moreover, what if the legal guardian misappropriates the funds? This potential risk cannot be overlooked.
Thank you,
Dinesh Divekar
From India, Bangalore
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While this may result in a delay in claim settlement, it is important to note that since the son is a minor, all terminal benefits will be received by his legal guardian. However, how can we establish who the legal guardian is? Moreover, what if the legal guardian misappropriates the funds? This potential risk cannot be overlooked.
Thank you,
Dinesh Divekar
From India, Bangalore
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In such cases, one formula that has worked in many instances is to deposit the money in a Fixed Deposit (FD) in any bank with the provision that until the nominee reaches the age of majority, the bereaved is entitled only to draw interest and not the capital amount. This approach has helped many families to tide over the crisis.
From India, Mumbai
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From India, Mumbai
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Is the son not eligible for orphan pension? Gratuity can be deposited with Controlling authority,if there is no nomination.
From India, Thiruvananthapuram
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From India, Thiruvananthapuram
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Gratuity and Other Benefits for Minor Nominees
The amounts payable by the employer by way of gratuity have to be deposited with the Controlling Authority under the Act for disbursement to the minor son upon his attaining majority.
Disbursement of Other Benefits
Other items like PF would be disbursed by the concerned authorities as per their rules and regulations in this regard. As an employer, you may extend all the help to the minor.
From India, Salem
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The amounts payable by the employer by way of gratuity have to be deposited with the Controlling Authority under the Act for disbursement to the minor son upon his attaining majority.
Disbursement of Other Benefits
Other items like PF would be disbursed by the concerned authorities as per their rules and regulations in this regard. As an employer, you may extend all the help to the minor.
From India, Salem
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To my knowledge, as an employer, as long as the F&F settlement is made in favor of the nominee as per the nomination papers filed in the record, it should satisfy the requirement. The employer, officially, cannot take a lead to ensure the right person gets the benefit. What if the minor nominee signs all the papers as per the dictates of his guardian? Practically, it will be difficult for the office to keep a watch on the flow of the funds. However, I wish to endorse the opinion that the amounts can be locked in the form of an FD until he attains 18 years and becomes eligible to operate on his own. Alternatively, the minor should open a bank account in his name, a joint account with his guardian, which can be operated only jointly, not severally.
There is also the possibility of facing resistance from his kith and kin if the office, in good faith, takes such safety measures to ensure unscrupulous people don't dupe him.
Legal Position - Nomination under The EPF/Payment of Gratuity Act:
If no nomination has been made, it shall be paid to the legal heirs of the deceased employee, or if the heirs are minors, the share of such a minor shall be deposited by the controlling authority with a bank until he attains majority.
A minor cannot appoint a nominee in this case. On his behalf, the nomination will be done by a person legally competent to act on his behalf. A joint account of a minor is allowed with his guardian, which cannot be operated by the other signatory severally.
Minor's Interest and Guardianship:
- Where the legal heir is a minor, a lawful guardian will represent the minor’s interest.
For Hindus and Christians, a minor’s father is the natural guardian, and after him, the mother. The Supreme Court has decided on the guardianship of a minor (Hindu) that even a mother can be a natural guardian during the lifetime of the father since the welfare of the child is of utmost importance.
For a Muslim minor, the father, then the person appointed by the father's will, then the father's father, and then the person appointed by the father's father will be the guardian in that order.
From India, Bangalore
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There is also the possibility of facing resistance from his kith and kin if the office, in good faith, takes such safety measures to ensure unscrupulous people don't dupe him.
Legal Position - Nomination under The EPF/Payment of Gratuity Act:
If no nomination has been made, it shall be paid to the legal heirs of the deceased employee, or if the heirs are minors, the share of such a minor shall be deposited by the controlling authority with a bank until he attains majority.
A minor cannot appoint a nominee in this case. On his behalf, the nomination will be done by a person legally competent to act on his behalf. A joint account of a minor is allowed with his guardian, which cannot be operated by the other signatory severally.
Minor's Interest and Guardianship:
- Where the legal heir is a minor, a lawful guardian will represent the minor’s interest.
For Hindus and Christians, a minor’s father is the natural guardian, and after him, the mother. The Supreme Court has decided on the guardianship of a minor (Hindu) that even a mother can be a natural guardian during the lifetime of the father since the welfare of the child is of utmost importance.
For a Muslim minor, the father, then the person appointed by the father's will, then the father's father, and then the person appointed by the father's father will be the guardian in that order.
From India, Bangalore
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Legal heirs and not nominee alone entitled to terminal benefits - Madras HC 8.9.2016.pdf
Employee Benefits.doc