issue legal notice to MNC not to make payment to nominee as she is also legal heir of deceased and has one third share in benefits
if they refuse seek court orders to direct MNC to pay one third share to aged mother as legal heir of deceased
Withdrawal of Employee Benefits from a company by Family Member after death of the employee
My cousin who was working with an MNC passed away during May 2021 due to Corona leaving behind his aged mother, wife, minor son and minor daughter He made his minor son as Nominee in the MNC His wife is trying to claim the benefits on behalf of minor son Now the MNC is saying that they dont need any signature or confirmation from his mother and they will credit all the benefits to the nominee's account (minor son) where his mother is guardian of minor son i.e. my cousin's wife. In this case, aged mother of my cousin will be left with no money. My cousin's aged mother approached the HR of the MNC by way of email, mentioning that she is one of the family member and all the benefits should be transferred with her consent only. Else, she will approach court against the MNC. Can the MNC transfer all the benefits/money to the guardian of minor son (nominee as mentioned by the deceased) directly without informing other family members? How can aged mother protest against and stop the transfer of benefits to one family member only?
Asked 3 years ago in Property Law
Religion: Hindu
7 Answers
Aged mother immediately file for writ petition against the said MNC to treat her as a heir in the benefits
The nomination facility is a mechanism which merely enables the MNC to transfer the benefits to the nominee upon the death of the employee without the need for any legal document such as succession certificate or letters of administration. Other legal heirs. technically and legally, need not be informed of the transfer. However, the nominee receives the benefit and holds the money ONLY as the trustee for all the legal heirs of the deceased and NOT as the absolute owner to the exclusion of the legal heirs. Therefore, the legal heirs have to proceed against the nominee in a court of law for establishing their rightful claim and proportionate settlement of the money held by the nominee. The MNC has to be made a proper party to the title suit. First, please issue legal notices to the nominee and the MNC through your local lawyer.
1. Nominee is only a custodian for the proceeds received from the MNC.
2. On the intestate ( without executing a WILL ) death of a male Hindu person, the deceased person's movable and immovable properties would devolve equally to the deceased person's mother, wife and children ( both son/s and daughter/s ).
3. In the instant case, the proceeds received from the MNC, has to be equally divided amongst the mother, wife, son and daughter.
4. If there's any confusion or denial by deceased person's wife, let the mother send a legal notice to get her rightful equal share on par with other legal heirs.
Dear Client,
The Company shall provide the benefits to the legal heir of the deceased employee.
Since, in this case, the deceased employee has already nominated his minor son to avail of the benefits, the aged mother needs to obtain a declaration from the competent court, stating that she is the mother of the deceased employee and a guardian to the son of the deceased, and thereby, issue such declaration at the MNC, in order to protest against and stop such transaction of benefits.
Thank you.
Employer will be bound to pay the gratuity benefits to the nominated person in the event of untimely death of the employee. With regards to the gratuity proceeds, "Where a nomination is validly made, the nominee only holds the funds on behalf of the legal heirs of the deceased employee - therefore, upon receipt of gratuity funds, the nominee is legally bound to pay the same in accordance with a will or general succession laws.
Whenever provident fund amount is disbursed, the custodian of the fund is anxious to have a good discharge against all claims from whomsoever claiming through the member.
However the distribution of insurance amount shall be made to the nominee who shall in turn re-disburse the same equally to all the legal heirs of the deceased. The effect of nomination is not to clothe the nominee with beneficial interest in the policy or the money payable thereunder, but to clothe him or her only with the power to revive the money under the policy from the insurer without prejudice to the question of title to the money. Consequently, it confers on the nominee a bare right to collect the policy money when the money becomes payable and by such nomination and the collection of the money, the nominee does not become the owner of the money payable under the policy and he or she is liable to make it over to whomsoever is entitled to the same under the law. Therefore, the mere use of the word "nominee" or "assignee" in section 14 of the Act does not decide the title to the money."
The nomination is filed only to facilitate the company to make payment to a particular person named by the deceased employee.
The succession law prevails for distribution of the terminal benefits of the deceased employee.
Hence your mother can claim her share in the benefits at par with the other legal heirs, she can file a suit for recovery of her share out of the amount settled by the company in favor of the named nominee.
- Since the deceased cousin nominated his minor son as nominee , then the said MNC is bound to refund the amount to him legally .
- However, the status of a nominee is just like a custodian and he cannot retain the amount without the consent of all the legal heirs of the deceased person.
- As per law , after the death of your cousin , his property or assets/fund would be devolved upon his wife , children and mother .
- Hence , his mother can claim a share in the fund received by the minor grandson.
