Rule 319 — Nomination.
Sub-rule (1) allows the trustees of a gratuity fund to permit an employee to make a nomination in Form 184, or in a form as near to it as may be necessary, conferring on one or more persons the right to receive the amount of gratuity in the event of his death, whether before the amount becomes payable or after it has become payable but has not been paid.
Sub-rule (2) requires an employee nominating more than one person to specify in the nomination the amount or share payable to each nominee, in such manner as to cover the whole of the gratuity that may be payable on his death.
Sub-rules (3) and (4) tie the nomination to the family. Where the employee has a family at the time of making the nomination, it must be in favour of one or more persons belonging to his family, and a nomination in favour of a person not belonging to his family is invalid. Where he has no family at that time, the nomination may be in favour of any person or persons, but if he subsequently acquires a family the nomination is forthwith deemed invalid and he may be allowed to make a fresh nomination in favour of one or more persons belonging to his family.
Sub-rule (5) allows a nomination to be modified at any time after written notice to the trustees of the intention to do so, in Form 184 or a form as near to it as may be; and provides that if a nominee predeceases the employee, the nominee's interest reverts to the employee, who may then make a fresh nomination in respect of that interest.
Sub-rule (6) fixes the effective date: a nomination or its modification takes effect to the extent it is valid on the date on which it is received by the trustees.
Sub-rule (7) deals with a minor nominee. Where the nomination is wholly or partly in favour of a minor, the member may appoint a major person of his family to be the guardian of the minor nominee in the event of the member predeceasing the nominee; where there is no major person in the family, he may at his discretion appoint any other person as guardian.
Sub-rule (8) defines "family" for the rule. For a male employee it consists of himself, his wife, his children whether married or unmarried, his dependent parents and the dependent parents of his wife, and the widow and children of his predeceased son. For a female employee it consists of herself, her husband, her children whether married or unmarried, her dependent parents and the dependent parents of her husband, and the widow and children of her predeceased son.
Gratuity falls due when an employee dies, at the moment when the fund most needs to know who is entitled to it. A nomination settles that in advance. The rule keeps the benefit within a defined family where one exists, provides for the cases that unsettle a nomination — a nominee dying first, a family acquired after the nomination, a minor nominee with no guardian — and fixes a single date from which the trustees are to act on the paper in their hands.
Validity turns on the position at the time the nomination is made and is then tested again by events. An employee with a family who nominates outside it makes an invalid nomination under sub-rule (3), and an employee with no family who nominates freely finds that nomination forthwith deemed invalid on acquiring a family under sub-rule (4) — nothing needs to be done by the trustees for that to happen, and the employee may then be allowed to make a fresh one. Sub-rule (6) is the provision that decides most disputes: a nomination or its modification takes effect to the extent it is valid on the date the trustees receive it, so a modification signed but never delivered has no effect, and a partly valid nomination is not wholly discarded — it operates to the extent it is valid. Where more than one nominee is named, sub-rule (2) requires the shares to cover the whole of the gratuity, so a nomination distributing part of it is incomplete on its own terms. The guardian appointment in sub-rule (7) has an order of preference: a major person of the employee's family first, and any other person only where there is no major person in the family. The definition of family in sub-rule (8) is exhaustive for this rule, and it extends outward to the dependent parents of the spouse and to the widow and children of a predeceased son.
An employee with a wife and two children nominates his brother in Form 184. Because he has a family at the time, sub-rule (3) makes the nomination in favour of a person outside the family invalid. He then nominates his wife as to 60% and his two children as to 20% each, so the shares cover the whole of the gratuity as sub-rule (2) requires, and the nomination takes effect on the date the trustees receive it. One child, a minor, is nominated, so under sub-rule (7) he appoints his wife, a major person of his family, as guardian of that nominee in the event that he predeceases the child.
An employee meets it as the Form 184 nomination taken by the trustees on joining the gratuity fund, and again on any change of family circumstances that calls for a fresh nomination. The trustees meet it when the gratuity falls due on death and the nomination on record has to be tested for validity.
any nomination made by such employee in favour of a person not belonging to his family, shall be invalid
if the employee subsequently acquires a family, such nomination shall forthwith be deemed to be invalid
A nomination or its modification shall take effect to the extent it is valid on the date on which it is received by the trustees.