Any employment lawyers in the house?

Martynt74

Martynt74

Martynt74

Soldato
Joined
20 Feb 2004
Posts
24,320
Location
La Romana, Spain
Obviously the correct answer here is to seek proper legal advice and this will definitely be done. But it's always handy to have an idea of things in your head prior to doing so i think.

My brother in law died recently. In his workplace contract was a death in service agreement of 15 times his base salary. Which would be worth around 300k.

His firm haven't mentioned this when they've been discussing his workplace pensions/future financial planning and it's only come up as his wife found an old copy of his contract.

Now she vaguely recalls him saying that there was a bit of an admin problem and he was never added to the death in service insurance policy. However as it's in his contract i presume the firm is liable for it. One of the issues being that the company certainly don't have 300k sat around in the bank.

Anyone have any ideas how this could play out? I presume one way would be to take legal action which would likely result in the liquidation of the firm and may still not net enough (well it possibly could based on their accounts for 2017 but no idea how that's changed in the last year)
 
Sorry to hear of your loss :(

Has anyone actually asked his work about this, or just waiting for them to mention it?
 
Also sorry for your loss. It entirely depends on the contract he signed.

I have death in service benefit and I have to name the beneficiaries. Only the named beneficiaries will get it. His may be the same or it may be different. Most companies offering this do so by an insurance policy. They would be mad to offer it out of their own money. I would discuss with an employment lawyer. But I would also get the executor of the will to write to the company asking about death in service benefits.
 
Not yet, she's waiting to speak to them soon.

They were very generous following his death and offering various things which we had thought quite generous (paying the mortgage for around 10 years which would've been worth about 100k) and that did make us quite suspicious as we couldn't understand why they'd be offering that.
 
VincentHanna said:
Sorry for your loss.

But that would be a bit harsh on all the people that worked for aforementioned firm if it sent them out of business!
Click to expand...

Oh i agree and i think his wife would just accept not having anything/a vastly reduced sum rather than go down that route.
 
Marvt74 said:
paying the mortgage for around 10 years which would've been worth about 100k) and that did make us quite suspicious as we couldn't understand why they'd be offering that.
Click to expand...

Yeah that bit certainly sounds suspicious. No company would be offering up things like that, some might be happy carrying on things like a company car etc. But to pay out the mortgage for 10 years...
 
Marvt74 said:
One of the issues being that the company certainly don't have 300k sat around in the bank.
Click to expand...

Normally if this is done properly the company wouldn't directly pay - it would come from a 3rd party insurance provider - with any policy like this they'd have to spread the load.
 
Semple said:
Yeah that bit certainly sounds suspicious. No company would be offering up things like that, some might be happy carrying on things like a company car etc. But to pay out the mortgage for 10 years...
Click to expand...

Some really big firms do have bereavement packages like that - some even offer it top to bottom for their employees not just the director, etc. level jobs. Not so usual in a company that "probably doesn't have 300K in the bank" though. (The company itself wouldn't pay out - it would be a 3rd party insurance or reinsurance company).

EDIT: Oh I see the problem here - if he wasn't added to the policy correctly the 3rd party almost certainly wouldn't pay out meaning if it was a contractual obligation the company itself would have to find some way of paying out on it.
 
Last edited:
He was in sales, so a low base salary but with hefty bonus/commission. I suppose the 15x tries to align the amount closer to 4x his actual income which would've been more standard.
 
Rroff said:
Normally if this is done properly the company wouldn't directly pay - it would come from a 3rd party insurance provider - with any policy like this they'd have to spread the load.
Click to expand...
You've not understood, he was supposed to be on an insurance policy but OP said they think he was never put on the policy. The company paying is never plan A, but if the company failed to put him on insurance and his contract said he had the cover, then in this case the liability could fall on the company directly.
 
Ok -

First couple of things

Death in service is normally covered by an insurance contract the employers buy. So in effect, they will pay an annual premium to cover their work force and if someone dies that insurance contact will pay out the sum relevant to that employee's death. They don't have £300k sitting in a bank etc - it's just like you own life assurance plan or car insurance - you pay a premium and if you need it you claim - same for employers.

Secondly - x15 salary is unheard of to be honest. You need to check that properly. The "norm" is x3/x4 salary for Death in Service cover. You need to check with the employers what the benefits are for the scheme as that sounds WAY out of the ordinary.

Third - As I say - if the details in his contract state a death in service plan is in place, but yet the employers haven't done so, then yes I would argue that the employers are liable for the pay out.

Lastly - sorry for you loss.
 
Here's the wording
6m5xInZ.png



There have been discussions via email/calls around various things, yet no mention of the above policy, which you'd expect to be one of the big talking points (we only know about it due to recently finding a copy of said contract).



From my memory of the conversations i had with him in the past. The scenario goes like this

He started the job
After 3 months of starting he suffered from a stroke
He then returned to work after around 4 months and continued to work for around 2 years
He then unfortunately suffered a second stroke which led to his death

Now i think i recall him saying that due to the way they manage the death in service, they don't pay into a policy based a premium x number of employees. They do it on an individual basis. As such when Craig because eligible for the benefit they had some admin issues (presumably because the premiums were high) as such he was never added onto the companies policy.

The issue being that he meets the criteria in his contract and is 100% eligible for the benefit.
 
The figure will be based on his base salary without commission/bonuses included I would have thought?


You really need to talk to HR within the company and actually ask and provide a copy of his contract stating it.
 
dl8860 said:
You've not understood, he was supposed to be on an insurance policy but OP said they think he was never put on the policy. The company paying is never plan A, but if the company failed to put him on insurance and his contract said he had the cover, then in this case the liability could fall on the company directly.
Click to expand...

Yeah I covered that in an edit right after I posted - missed the significance at first.
 
Every death in service benefit I've ever seen in my employment has been linked to the pension, if you were enrolled in the pension then you were also in receipt of DIS as part of it.

I can't see the image (at work) - but 15x salary is something I've never seen. I work for an insurer and have 5x salary which is the highest I've seen.

Either way though, its worth a conversation with the company, and then depending on how things go consult legal advice if needed. For now I definitely wouldn't admit to any knowledge of "admin issues" with the Death in Service.
 
Marvt74 said:
Here's the wording
6m5xInZ.png



There have been discussions via email/calls around various things, yet no mention of the above policy, which you'd expect to be one of the big talking points (we only know about it due to recently finding a copy of said contract).



From my memory of the conversations i had with him in the past. The scenario goes like this

He started the job
After 3 months of starting he suffered from a stroke
He then returned to work after around 4 months and continued to work for around 2 years
He then unfortunately suffered a second stroke which led to his death

Now i think i recall him saying that due to the way they manage the death in service, they don't pay into a policy based a premium x number of employees. They do it on an individual basis. As such when Craig because eligible for the benefit they had some admin issues (presumably because the premiums were high) as such he was never added onto the companies policy.

The issue being that he meets the criteria in his contract and is 100% eligible for the benefit.
Click to expand...


Sorry for your loss.

It may be that when the company tried to add him to the insurance policy, they had to state prior medical related issues and suffering a stroke would have certainly increased premiums substantially.
At this stage the company would have to either pay the crazy premium or persuade your brother in law to work a new contract where the death in service benefit was removed. Perhaps your BIL signed this new contract. If he did';t then he would still be employed under the old contract and yes the company would be liable for the 15x (base) salary.

Given the company appear to be happy to pay 10 years of mortgage for 100k, I suspect your brother in law didn't sign a new contract so the company is up 'poop' creek.
Whatever you do you need to keep calm and not be too pushy but be prepared to get a lawyer and make a reasonable compromise. Instead fo 300k upfront it could be a 300k loan over 10 years with interest applied matching inflation.
 
You must log in or register to reply here.
Back
Top Bottom