Bobby (Manager Accounts) 28 September 2010

Accident on duty

An employee of our company working as a Mechanic ( his monthly salary was 9500/- per month) He met with an accident while repairing a machine at customer site. A few days later unfortunately he passed away in a hospital.

we are covered under ESI and already submitted all the relevance documents in this case.

We have also put claim for the group personsl accident insurance policy taken by the company

In addition to that >>>>

Now after discussion with his family our company has decided to pay a lump sum Rs. 10 lac in the name of his daughter ( he was survived with his wife and a daughter)

Plz give your Valuable opinion ..

1. What will be the accounting treatment in the books of the company? Is it allowed as an expense?

2. What are Legal issues or formalities or documentation required?

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7 Replies

V. VASUDEVAN (LEGAL COUNSEL) 28 September 2010

The company's decision is a Good Will Gesture. You need to file a report/return under the Workmen's Compensation Act - now Employees Compensation Act. As far as the mode of disbursement, the money may be deposited in the name of the daughter and appointing the mother as guardian (if the daughter is minor). If the the daughter is major, it is advisable to disburse money to both mother and daughter in a equitable proportion agreeable to both of them. As far as accounting treatment, it may be treated as a employee welfare measure.

Bobby (Manager Accounts) 28 September 2010

Thanks a lot for your valuable opinion.

Daughter is only 2 yrs & mother is 22 .(there is a possibility of remarriage)

Family has decided to make her Uncle (deceased's elder brother) as Guardian .

they have requsted to pay all the statutory dues as ESI claim, Accident claim, PF dues , dues payable by the company to deceased's widow.

And this additional sum to be invested in long term investments schemes as some LIC or mutual fund plan in the name of the child ( payment is directly to be made by the company to LIC or Bank etc. in the name of the child)

what are the legal documents , receipts etc. should company get signed and which family member should sign it. Plz give your worthy advise

himanshu pathak (AGM(HR)) 29 September 2010

You should documents such as

1. daughter's birth certificate

2. wife and Uncle consent in writing for 10 lacs deposition

himanshu

himanshupathak@torrentpower.com

Ahmedabad

AGM-HR-

9227233315

(Guest)

Unfortunately this is India and no Tort would be given . In USA millions of dollars would have been given by way of Tort. If the company is an American company ,then a US Federal Court would give millions of dollars under Alien Torts Statute. Except in Bhim Singh case Indian courts don't recognize individual tort which is taught as a high level stuff in Indian law colleges. Just shoot a paperbook [actually 40 are required] to the US court in case the company is an American one.

(Guest)

40 paperbooks in US letter size with Font size not less than 9 and not more than 11[In India Judges see only size 18]

(Guest)

Get a Labour Suprintendent to mediate as also get his seal with signatures. Your documents must be in order so that trouble later might not crop up. The village Panchayats usually foment trouble for getting their share.