Respected Members,
One of our employees, aged 65, died on a sales duty call due to a heart attack recently. He had two stents already and had other disabilities probably leading to this. While we are a small trading company with less than 10 employees, I wonder if there are any HR/legal angles related to compensation for his next of kin. We are planning to gather a corpus of 2x his salary plus contributions from other fellow colleagues in the office. However, strangely, the deceased employee's 30-year-old son is now threatening legal recourse for compensation, and we are not sure if it is the correct way to go. We do not wish to create a negative image and want to help them as best as we could. Thus, we would like to get advice from respected members.
Thanks & Regards,
Kunal
From India, Bangalore
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One of our employees, aged 65, died on a sales duty call due to a heart attack recently. He had two stents already and had other disabilities probably leading to this. While we are a small trading company with less than 10 employees, I wonder if there are any HR/legal angles related to compensation for his next of kin. We are planning to gather a corpus of 2x his salary plus contributions from other fellow colleagues in the office. However, strangely, the deceased employee's 30-year-old son is now threatening legal recourse for compensation, and we are not sure if it is the correct way to go. We do not wish to create a negative image and want to help them as best as we could. Thus, we would like to get advice from respected members.
Thanks & Regards,
Kunal
From India, Bangalore
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If the deceased employee was a heart patient, the death could be considered natural. Before proceeding further, please let us know whether the employee was covered by ESI and whether the employee's salary was subject to EDLI contribution (of EPF). If the employee was under the ESI scheme, the issue will be managed by the ESIC.
Compensation Under the Employees' Compensation Act
Death while on duty and during the course of employment will attract compensation under the Employees' Compensation Act. For employees covered by ESI, the ESIC will handle the situation upon receiving an accident report from the employer. Since this is a case of a heart attack and not a death due to employment injury/accident, it is necessary to establish that the heart attack was related to work. If the employee was asked to do a strenuous sales call leading to a heart attack due to stress, it would be considered an accident during the course of employment. The opposing party should prove that the deceased was compelled to generate more sales or faced a threat of employment termination if targets were not met. All these depend on the nature of his job and the kind of relationship that existed between you and the employee. While analyzing these aspects, the appropriate authority under the Workmen Compensation Act will certainly inquire why a person aged 65 was employed, whether a contract of employment existed, etc. Therefore, you should be prepared with all relevant documents.
As the dependents of the deceased have proceeded legally, you should address the matter legally.
From India, Kannur
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4526Compensation Under the Employees' Compensation Act
Death while on duty and during the course of employment will attract compensation under the Employees' Compensation Act. For employees covered by ESI, the ESIC will handle the situation upon receiving an accident report from the employer. Since this is a case of a heart attack and not a death due to employment injury/accident, it is necessary to establish that the heart attack was related to work. If the employee was asked to do a strenuous sales call leading to a heart attack due to stress, it would be considered an accident during the course of employment. The opposing party should prove that the deceased was compelled to generate more sales or faced a threat of employment termination if targets were not met. All these depend on the nature of his job and the kind of relationship that existed between you and the employee. While analyzing these aspects, the appropriate authority under the Workmen Compensation Act will certainly inquire why a person aged 65 was employed, whether a contract of employment existed, etc. Therefore, you should be prepared with all relevant documents.
As the dependents of the deceased have proceeded legally, you should address the matter legally.
From India, Kannur
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Hello Sir, Thanks for the guidance. I appreciate it. As mentioned earlier, we are a trading company starting small with 10 staff members. We do not have ESI coverage nor EPF. The deceased person at our office was not under contract, and he was in need of money due to financial strain. As a result, we paid him a regular salary and expenses despite knowing about his ill-health.
Based on your advice, we will start collecting necessary documentation at our site. In the meantime, could you advise on the maximum amount we could be liable for once this proceeds legally? This information would be helpful in preparing a contingency budget.
We will also explore coverage for all employees under insurance/ESI schemes to provide reassurance for the future.
From India, Bangalore
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Based on your advice, we will start collecting necessary documentation at our site. In the meantime, could you advise on the maximum amount we could be liable for once this proceeds legally? This information would be helpful in preparing a contingency budget.
We will also explore coverage for all employees under insurance/ESI schemes to provide reassurance for the future.
From India, Bangalore
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Since he has been employed for sales promotion activities, you cannot say that he was not an employee of your organization. Not giving him any appointment order or engaging an employee without any legal document showing any employee-employer relationship is non-compliance, and for that, you should receive a notice from the labor department. That is a different question.
Issue of Employee Pressure
The issue here is to prove that the said employee was not under pressure to achieve his targets. If there were any emails directing the deceased to meet targets with a caution or warning that he would face consequences and similar sentences, you cannot escape liability under the Employees' Compensation Act.
Compensation Calculation
Compensation would depend on the salary, age of the deceased, and the relevant factor corresponding to the age. Any salary shall be capped at Rs 15,000. For death while and during the course of employment, the compensation is equal to 50% of the salary multiplied by the relevant age factor. For an age of 65, the compensation factor is 99.37. By multiplying it by 50% of the salary, let's say the salary is Rs 15,000 per month, then the compensation would be 99.37 x 7500 or Rs 7,45,275. Please check the calculation once again using the attached schedule.
From India, Kannur
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Issue of Employee Pressure
The issue here is to prove that the said employee was not under pressure to achieve his targets. If there were any emails directing the deceased to meet targets with a caution or warning that he would face consequences and similar sentences, you cannot escape liability under the Employees' Compensation Act.
Compensation Calculation
Compensation would depend on the salary, age of the deceased, and the relevant factor corresponding to the age. Any salary shall be capped at Rs 15,000. For death while and during the course of employment, the compensation is equal to 50% of the salary multiplied by the relevant age factor. For an age of 65, the compensation factor is 99.37. By multiplying it by 50% of the salary, let's say the salary is Rs 15,000 per month, then the compensation would be 99.37 x 7500 or Rs 7,45,275. Please check the calculation once again using the attached schedule.
From India, Kannur
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Employee's Compensation Act-2009.pdf
Death Gratuity Calculator for W.B.Govt employee.xls