Legal Liability for Compensation of Daily Wage Employees Natural Death - Insights and Recommendation

Hello Everyone,

I had a daily wage employee who was diabetic when he started working. He used to come to work about four days a week only. His wage was Rs. 300 per day. Last month, he died a natural death due to Multiple Organ Failure (he was a drunkard). He was about 50 years old. Now, his family is expecting compensation from me. Please tell me if I am liable to give any kind of compensation. (I had already given Rs. 10,000 for his cremation).

Thank you for your guidance.

Rahul

Let us all pray for his soul to rest in peace. What you have given is enough for his last rites. If he was covered under ESIC, he would get funeral expenses. Based on your inputs, he is not an employee, and he doesn't deserve any compensation.

Ok. He is not covered in ESIC.

Kindly help me with how to communicate this to his family. They are expecting something from me.

Hello Rahul,

You haven't mentioned anything about his family - are there any grown-up kids, etc. The options open to you would also depend on how long this person worked for you.

First and foremost, you need to make it clear that legally you are not bound to pay any compensation. Moreover, being a drunkard, they need to be made to appreciate that you have kept him on the job on compassionate grounds rather than for any advantage for you.

However, people in this economic category can make your life miserable (they wouldn't really understand legal aspects), and in order to save your time handling them, you may need to devise other ways.

One way, if you find it affordable and practical, can be to give the deceased person's job to one of his family members.

Another way could be to fund a kid from the family for his/her education.

It all depends on whether you wish to help this family or not. If yes, then there can be ways found. However, you also need to ensure that they don't take it as an expectation but as 'help' from you.

If no, then read them the rule book. The best-case scenario would be to pay them something and record this in writing as a F&F settlement. The worst-case scenario would be that they may raise a stink, for which you need to be ready legally.

All the best.

Regards,

TS

With his salary level, he would be covered under ESIC. In that case, he will get compensation from there. If not, the next question is of compensation under the Employee Compensation Act (Workman Compensation Act). That is applicable only in case the death was due to or in the course of employment. If he died of natural causes in a hospital, then in any case, he is not eligible for any compensation from you. Please give us all details that have a bearing on the case if you want an answer that is actually correct.

Dear Rahul Ji,

Your help for his family was a very good initiative. Can I know how long he worked for you? If he worked at least 20 days per month, why couldn't you put him under ESIC? But now, all is over, and you can say to their family that if he was covered under some insurance plan, then he can get something; otherwise, nothing.

Dear Mr. Rahul,

First of all, can you please tell whether he is covered under EPF Act? If so, you can avail EDLI benefits for his bereaved family. As informed in your post, his daily wage is Rs. 300/- per day and he has worked for at least 4 days in a week. That means he might have worked for 16 days in a month. Hence, his salary would be around Rs. 4800/- per month. If this calculation is correct, then his nominee could get EDLI benefits up to Rs. 1,15,200/-, provided you have remitted PF for this amount.

You may have to submit the duly filled Form 5 (IF) along with the Death Certificate, Nomination form copy, Bank details, and cancelled cheque leaf copy. If your organization is big enough, you may even collect some amount from the volunteer staff besides contributing your share and can help his family.

P. Vathiraj

You have not specified the type of industry where he was working. Is it construction?

Pon

First of all, you have not mentioned the nature of work, whether it is a construction company, factory, or BPO, and the number of workers engaged. If the individual was covered under the EPF Act 1995 scheme, then his legal heir will receive EDLI benefits and a monthly pension. His legal heir will not receive any benefits from ESIC (except for the cremation amount) and through the Workmen's Compensation Act.

Regards

Hi All,

Thank you for your responses. We are Xerox machine dealers. He was going to repair the machines onsite. We are a small office with a total of 3 employees, so we are not covered by EFP. There was no PF.

Waiting for your replies.

Thanking You,
Rahul

If he was going to repair your machine on-site, it will be deemed to be during the course of employment, and liability will arise under the Employees Compensation Act (Workmen Compensation Act). However, if there are only three employees in the entire organization, please check the applicability of this act through your advocate or some seniors in this forum.

A.S. Bhat