Dear seniors,
My question is one of our employee died by suicide because of family reasons, he is just a 43 days old and still under probation, so as company what will be our liability towards her. ours is PVT LTD company. we have ESI but she is out of that limit, we are in the process of registering with EPF and coming to gratuity....as she has not completed 5 years do we need to pay her? ( thats what i understood from the below rule).
as per the payment of gratuity act: in point no 6.....
6. Payment of gratuity.-
(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years-
(a) on his superannuation, or
(b) on his retirement or registration, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor the shares of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
please help us as this is a very rare case......
thank u
MM
From India, Hyderabad
2My question is one of our employee died by suicide because of family reasons, he is just a 43 days old and still under probation, so as company what will be our liability towards her. ours is PVT LTD company. we have ESI but she is out of that limit, we are in the process of registering with EPF and coming to gratuity....as she has not completed 5 years do we need to pay her? ( thats what i understood from the below rule).
as per the payment of gratuity act: in point no 6.....
6. Payment of gratuity.-
(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years-
(a) on his superannuation, or
(b) on his retirement or registration, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor the shares of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
please help us as this is a very rare case......
thank u
MM
From India, Hyderabad
Even assuming that he is eligible for gratuity under Sec(4) (1) of the PG Act,I wonder whether any gratuity is payable to him since in terms of Sec(4)(2), gratuity is payable at the rate of 15 days last drawn wages for each completed year of service and only where an employee puts in service in excess of six months, it will be rounded off to one year. In this case, the employee has put in only 43 days of service and thus he cannot be treated to have completed one year of service.This is my view.
B.saikumar
From India, Mumbai
B.saikumar
From India, Mumbai
Dear Saikumar
Thanks for your response.
The employee per se, is eligible for gratuity; as in death case the condition of completion of five years of service is not applicable.
Thus we can not say that the deceased employee was not eligible for gratuity.
Now when we come to the quantum; you are right that since he has not completed one year; he can not be paid any gratuity (i.e 15 days wages for every completed year of work).
However, if the company has a benevolent policy; they can pay 15 days or a month's salary; as gratuity or even more (ex-gratia amount).
The word EX-GRATIA itself means, done from a sense of moral obligation rather than because of any legal requirement.
One should remember that any labour Act does not put a bar on any employer who wishes to go or pay beyond (more) the limit of the Law.
Some legendary companies like the Tatas are live examples of such benevolent and employer-friendly companies.
Moreover, there are many companies who have been known to pay good amount to thee bereaved families in case of TAGIC or ACCIDENTAL death as Ex-Gratia payment.
We should attempt to broaden the outlook of our members by referring to good and worth-emulating examples; rather than keeping their mind and outlook confined to small petty-minded company practices.
Just imagine the kind of motivation (which translates to higher productivity), loyalty (which translates to reduced attrition) etc. such opportunities (rather tragic events) provide to the Company in terms of solidarity and support for the employees.
Warm regards.
From India, Delhi
Thanks for your response.
The employee per se, is eligible for gratuity; as in death case the condition of completion of five years of service is not applicable.
Thus we can not say that the deceased employee was not eligible for gratuity.
Now when we come to the quantum; you are right that since he has not completed one year; he can not be paid any gratuity (i.e 15 days wages for every completed year of work).
However, if the company has a benevolent policy; they can pay 15 days or a month's salary; as gratuity or even more (ex-gratia amount).
The word EX-GRATIA itself means, done from a sense of moral obligation rather than because of any legal requirement.
One should remember that any labour Act does not put a bar on any employer who wishes to go or pay beyond (more) the limit of the Law.
Some legendary companies like the Tatas are live examples of such benevolent and employer-friendly companies.
Moreover, there are many companies who have been known to pay good amount to thee bereaved families in case of TAGIC or ACCIDENTAL death as Ex-Gratia payment.
We should attempt to broaden the outlook of our members by referring to good and worth-emulating examples; rather than keeping their mind and outlook confined to small petty-minded company practices.
Just imagine the kind of motivation (which translates to higher productivity), loyalty (which translates to reduced attrition) etc. such opportunities (rather tragic events) provide to the Company in terms of solidarity and support for the employees.
Warm regards.
From India, Delhi
Dear Raj Kumar
Thanks for your response.I have no issue about his eligibility and I even conceded that in my reply. I confined myself to the Payment of Gratuity Act since the queriest sought to know the entitlement of the employee to gratuity in given circumstances under the Gratuity Act. Yes,I agree with you on the suggestion that the employers shall pay some exgratia or compensation on humanitarian grounds.to employees who die during service and are deprived of gratuity under the Act on technical grounds.
B.Saikumar
From India, Mumbai
Thanks for your response.I have no issue about his eligibility and I even conceded that in my reply. I confined myself to the Payment of Gratuity Act since the queriest sought to know the entitlement of the employee to gratuity in given circumstances under the Gratuity Act. Yes,I agree with you on the suggestion that the employers shall pay some exgratia or compensation on humanitarian grounds.to employees who die during service and are deprived of gratuity under the Act on technical grounds.
B.Saikumar
From India, Mumbai
Dear Saikumar
Thanks for your comments..
Even though my response was addresses to you; it was directed towards all members in general !!
I had taken cognizance of the words in your reply, "Even assuming...."; as my contention is that there is no case for even "assuming", as the deceased employee is "actually" eligible for gratuity.
Warm regards.
From India, Delhi
Thanks for your comments..
Even though my response was addresses to you; it was directed towards all members in general !!
I had taken cognizance of the words in your reply, "Even assuming...."; as my contention is that there is no case for even "assuming", as the deceased employee is "actually" eligible for gratuity.
Warm regards.
From India, Delhi
Dear Mr. Raj,
Appreciate your views. On humanity ground compensation shall be given to her family members. But it is worth to note that if she had committed suicide then there might be some harassment or some other issue with her which needs to be identified & pay to the concern person accordingly. For e.g. if she commit suicide because of her in-laws pressurization or something than its not worth to pay to those members. In this case, shall the compensation needs to be paid to her children or parents/nominee? Please suggest.
For my clarification & as per the law aspect, in case of suicide, I don't think it would cover under any compensation. I think, the gratuity/compensation shall be paid in case of accidents/natural death/medical ground and not in suicide.
Please advice.
From India, Indore
Appreciate your views. On humanity ground compensation shall be given to her family members. But it is worth to note that if she had committed suicide then there might be some harassment or some other issue with her which needs to be identified & pay to the concern person accordingly. For e.g. if she commit suicide because of her in-laws pressurization or something than its not worth to pay to those members. In this case, shall the compensation needs to be paid to her children or parents/nominee? Please suggest.
For my clarification & as per the law aspect, in case of suicide, I don't think it would cover under any compensation. I think, the gratuity/compensation shall be paid in case of accidents/natural death/medical ground and not in suicide.
Please advice.
From India, Indore
Hi MM,
Please understand the words of the relevant section in the correct perspective.
\"On his death or disablement due to accident or disease\".
By the way \'Suicide\' is an offence! So, since death is not due to accident or disease, NO amount is payable legally. However, if the company is generous they may pay any amount they feel is appropriate.
Colonel J Gahlot
Proprietor, \'TRURECRUIT\'
09810081197
From India, Delhi
Please understand the words of the relevant section in the correct perspective.
\"On his death or disablement due to accident or disease\".
By the way \'Suicide\' is an offence! So, since death is not due to accident or disease, NO amount is payable legally. However, if the company is generous they may pay any amount they feel is appropriate.
Colonel J Gahlot
Proprietor, \'TRURECRUIT\'
09810081197
From India, Delhi
Dear Anurag and MM
Not going into the legal aspect of Criminal Law; such matters can be dealt benevolently on a Case-to-case basis.
Although committing suicide can not considered as rightful act; one must look at the extenuating circumstances and the apparent helplessness that must have forced the individual to go to such an extreme step.
Taking a humanitarian view, payment of some ex-gratia amount to the deserving survivors/dependents in the family and/or providing any suitable employment opportunity is a humanely and praiseworthy act. We all are HUMAN resource professionals.
Warm regards.
From India, Delhi
Not going into the legal aspect of Criminal Law; such matters can be dealt benevolently on a Case-to-case basis.
Although committing suicide can not considered as rightful act; one must look at the extenuating circumstances and the apparent helplessness that must have forced the individual to go to such an extreme step.
Taking a humanitarian view, payment of some ex-gratia amount to the deserving survivors/dependents in the family and/or providing any suitable employment opportunity is a humanely and praiseworthy act. We all are HUMAN resource professionals.
Warm regards.
From India, Delhi
Dear Friends,
The discussion is gaining piquancy with the response of the Colonel. Legally his view point is correct.Please, anyone may be gracious enough not to advance the argument of whether suicide can also be considered as death due to disease on the presumption that psychologically the tendency to suicide arises because of constant depressed state of mind and dejection. In such a twilight situation, what should be appropriate and important would be who the ultimate beneficiaries are. As rightly told by Rajkumar what a welfare legislation ensures is only a minimal relief to the affected and I would like to submit that in any ameliorative action arising out of compassion, doubt stemming up from legalistic mind-set can not be an effective restraint.
From India, Salem
The discussion is gaining piquancy with the response of the Colonel. Legally his view point is correct.Please, anyone may be gracious enough not to advance the argument of whether suicide can also be considered as death due to disease on the presumption that psychologically the tendency to suicide arises because of constant depressed state of mind and dejection. In such a twilight situation, what should be appropriate and important would be who the ultimate beneficiaries are. As rightly told by Rajkumar what a welfare legislation ensures is only a minimal relief to the affected and I would like to submit that in any ameliorative action arising out of compassion, doubt stemming up from legalistic mind-set can not be an effective restraint.
From India, Salem
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Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc