Dealing with the death of an employee can be challenging for employers and the workplace. Below are some quick things to note in the event you are notified of the death of an employee outside of the workplace.
1. Ensure you have correct information about the death
Employers should confirm who the family contact/next of kin is when they are notified and collect their contact details and information about the death such as when it occurred, where it occurred and why it occurred, funeral arrangements etc.
Ask how much information the family feels comfortable sharing as they may wish that certain details be kept private, for example the cause of death. It is important to respect their wishes.
Notify the employee’s manager and team first before making a general announcement in accordance with the family’s wishes and make available any employee assistance programs such as counselling that you may have.
Inform any clients, customers, or suppliers outside your company that the employee had business relationships with, in a simple and respectful manner. Give them details of who will be handling phone calls and e-mails directed to the employee.
2. Payments to a deceased employee
Outstanding entitlements
Any outstanding entitlements of a deceased employee form part of the employee’s estate and are payable only to the executor to whom probate of their will has been granted (The Grant of Probate is the proof required), or to the administrator, to whom a grant of Letters of Administration has been made by the Probate Court.
However, where an employee has not left any other asset in respect of which probate or Letters of Administration must be obtained, it is common for the money to be paid to the employee’s widow or widower (or if they were unmarried, to some other near relative). This is provided there is no dispute between different members of the family as to the person entitled to receive the money.
Employees’ Death Benefits Payment include the following payment types:
– unpaid worked wages;
– unused leave entitlements (Annual Leave and Long Service Leave);
– unused RDO;
– unused Personal Leave (if the relevant Industrial Instrument requires Personal Leave to be paid out at termination);
– any lump sums (gratuity payment) the employer may choose or be required to pay on top of the standard wages and entitlements;
– any Workers’ Compensation payments lump sums (in the instance the death occurred in the workplace);
– funeral expenses and other support payments if the insurer deems appropriate for such payments to be made due to worker’s death being the result of a work-related injury;
– unpaid superannuation contributions.
The employer must correctly identify the deceased employee’s beneficiaries before making any Death Benefits Payments and should not rush to process any final payments and take their time to obtain the required legal documents to identify the Beneficiaries.
Superannuation
Superannuation payments may go directly to a nominated person (for example, the spouse of the deceased employee), or to the deceased’s estate.
If unsure, contact the deceased employee’s superannuation fund for further information.
Tax on payments
Payments for unused annual leave and unused long service leave made after the death of an employee are not taxed and are not required to be shown on a group certificate.
No tax instalments need to be deducted from the employee’s last pay, covering pay for the period up to the date of death, including retrospective pay and bonus payments.
Such payments may be disclosed in the gross income box of a separate group certificate, made out in the name of the estate of the deceased employee. These payments will form part of the income of the deceased’s estate and will be taxed in accordance with the income tax provisions that apply to trusts.
If ever unsure, contact the Australian Tax Office for further assistance.
3. Transition of Work
Discuss any major outstanding issues and tasks with the deceased employee’s supervisors, close co-workers, vendors, and others, then meet with staff, and figure out how to distribute the employee’s work. Avoid immediately advertising for a replacement and be sensitive to your other employees when you do.
4. Company Property
You should follow your normal termination and security procedures when an employee dies. The employee’s computer and building access should be terminated, and certain electronic devices may need to be wiped remotely. Make arrangements with the family’s contact person for the return of all company equipment and the retrieval of any personal items she kept at the workplace.
Company equipment may include a laptop, cell phone, or other electronic devices; tools or equipment; keys; company credit cards or purchasing cards; or uniforms. A trusted employee may be an option if the family prefers not to be involved in the exchange of company and personal property.
If you need further information or assistance, please contact BetterHR’s experienced HR consultants, and qualified lawyers on 1300 659 563 or visit: Subscribe to BetterHR.
