Have you signed an employee beneficiary form? Do you know what it is? Experts in the UAE say that while most employers as part of their recruitment policies make a record of employees’ beneficiary details, some don't because it isn't manditory. In such cases what can an employee do to ensure his assets - including and not limited to his gratuity money and leave salary - would be transferred to his legal heir in the event of loss of life?
Gulf News talks to legal experts about what this form is about and how an employee can benefit from it.
Ali Al Haddad, head of Haddad & Associates and chairman at the Lawyer Business Group, said: “A company which respects its employees to meet their obligations will issue an employee beneficiary form. There is no law governing this at the moment,” he said.
Mohammad Marria, Managing Director of Just Wills, said: “Gratuity is governed by the UAE Labour Law, however, other assets of a worker in the UAE like life insurance for example [are] not covered. So in the absence of an employee beneficiary form, the company will distribute the assets of the employee as per the UAE Shariah law.”
What is an employee beneficiary form?
According to Marria, an employee beneficiary form is a document that people can fill out with the HR department of their companies. “The form ensures details such as who will be entitled to the employee’s life assurance in the event of his death. In the case of any loan outstanding by the employee, the legal heir will be required to settle it with the local UAE banks.”
He advised UAE employees to hand a copy of this form, which is usually kept with the firm's HR, to their families so they are aware of this.
“Employees benefit from this as this will ensure payment is made directly to the legal heir and the correct person or entity they want to give the proceeds to. Not just that, having an employee beneficiary form ensures the legal heir does not have to run around courts to get their rights.”
Challenge without a form
Marria said one of the biggest challenges companies face when an employee dies is tracking their beneficiaries down. “This can be an issue especially when you are trying to locate the family in remote areas especially if they are living in a small town or village. Also, when an employee passes away, the employer has a certain amount of benefit or credit and is not aware who to pass this benefit to especially when there are disputes.”
He added: “In cases where the employee has any loans outstanding from a bank, it (the bank) may take an undertaking from the employer that the end of service benefit (EOSB) has to be paid directly to the entity to settle the outstanding loan. In this case the beneficiary form will be ignored.”
Haddad said in the absence of a company providing the employer beneficiary form, employees on their part must inform their families about details of the company’s HR department. “A contact name, number will be very helpful. The employee can also on his part be a little proactive and give his legal beneficiary details to the company so they can attach the same to his documents.”
“So if the employee has the habit of calling his family every week and he does not do it for two weeks continuously, the family member should be able to call his employer and find out his whereabouts,” said Al Haddad.
In the UAE, for example, Emiratis have the option of a service called Tawajudi (which translates to 'my place' in English). Tawajudi is a service provided by the Ministry of Foreign Affairs and International Cooperation (MoFAIC) through UAE Missions abroad, which facilitates the process of communication with its citizens in cases of crises and emergency in order to coordinate their return to their country.
Deepak Ahuja, CEO, NADIA Global Training and Recruitment, said: “As regulations keep evolving in the UAE, I hope that the employee beneficiary form will become a mandatory provision by the companies. This will protect employee interest in case of a situation like this arising. As part of the overall revisit to employee onboarding process, this should also be reviewed."
"This form has a column which captures details of employees family and beneficiary details, incase of any unfortunate circumstance (for payment of outstanding). However, this is not a mandatory requirement and is seen as a ‘good to have’ practice, rather than a ‘must have’.”