Home  /  Code on Wages, 2019  /  Section 44

Section 44: Payment of undisbursed dues in case of death of employee

The Code on Wages, 2019 (Act No. 29 of 2019) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter VI: Payment of Dues, Claims and Audit
Competent Labour Forum
Act No. 29 of 2019
Section 43 All 67 Sections of Code on Wages, 2019 Section 45

Legal Commentary & Landmark Judgments: Section 44

Section 44 of the Code on Wages, 2019 provides a comprehensive statutory mechanism for the expeditious disbursement of unpaid wages, bonuses, and accrued statutory dues upon the death or disappearance of an employee, directing payment to registered nominees, establishing a deposit procedure with the Section 45 authority in the absence of valid nomination, and conferring full legal discharge upon the employer.

  • Priority of Valid Registered Nomination: Where an employee dies before receiving accrued wages or bonus, or where the employee's whereabouts are unknown, the employer is legally mandated to pay all undisbursed dues to the person nominated by the employee in accordance with the prescribed rules, without demanding probate or succession certificates.
  • Deposit Mechanism with Section 45 Authority: If no nomination exists, or if the nominee is deceased, untraceable, or disputes arise among rival claimants, the employer must deposit the entire undisbursed sum with the Authority appointed under Section 45 within the prescribed statutory period. The Authority then adjudicates heirship claims in a summary manner and distributes the funds.
  • Complete Employer Discharge and Fiduciary Role of Nominee: Disbursement to the nominee or deposit with the Section 45 Authority operates as a complete, absolute discharge of the employer from all further liabilities in respect of those dues. The nominee receives the funds in a fiduciary capacity, holding them in trust for legal heirs entitled under personal succession laws.
Key Landmark Precedents:
  • Smt. Sarbati Devi v. Smt. Usha Devi (1984) 1 SCC 424: The Supreme Court settled that a nominee merely serves as an authorized receiver and does not become the absolute owner of the estate; the funds remain subject to the law of succession governing the deceased employee.
  • Shipra Sengupta v. Mrinal Sengupta (2009) 11 SCC 604: The Supreme Court reaffirmed that nomination does not confer beneficial title or override statutory succession; however, payment to the nominee completely discharges the paying organization from third-party claims.
  • State of Punjab v. Ram Lubhaya Bagga (1998) 4 SCC 117: The Supreme Court affirmed that statutory mechanisms providing for quick settlement of terminal and wage dues upon an employee's death are designed to safeguard dependent families from destitution and must be strictly enforced.
Courtroom Practice & Strategic Litigation Guidance:

HR departments must ensure that every employee completes a formal nominee declaration upon onboarding and updates it following marriage or changes in family status. In the event of an employee's demise, HR must verify nominee records and disburse undisbursed wages within 30 days. If competing legal heirs submit rival notices before payment, the employer should avoid deciding succession disputes and immediately deposit the full amount with the Section 45 Authority under Section 44(b) to secure full statutory discharge.

Section 43 All 67 Sections of Code on Wages, 2019 Section 45