Q.You are the head of the Human Resources department of an organisation. One day one of the workers died on duty. His family was demanding compensation. However, the company denied compensation because it was revealed in investigation that he was drunk at the time of the accident. The workers of the company went to strike demanding compensation for the family of the deceased. The Chairman of the management board has asked for your recommendation. What recommendation would you provide the management? Discuss the merits and demerits of each of the recommendations

Body Analysis

Evaluation of Recommendations

1. Deny Compensation Based on Company Policy

• Merits: Upholds the rule of law and strict safety regulations. It deters other employees from working under the influence of alcohol, thereby preventing future accidents.
• Demerits: Exacerbates the ongoing strike, leading to severe operational and financial losses. It also damages employee morale and projects an image of corporate insensitivity, causing long-term reputational harm.

2. Provide Full Compensation

• Merits: Immediately ends the strike, restoring operational productivity. It provides immediate relief to the deceased worker's family and enhances the company's reputation as a compassionate employer.
• Demerits: Sets a dangerous precedent of rewarding policy violations, which could compromise workplace safety discipline and lead to financial liabilities in future negligence cases.

3. Establish a Workers' Welfare Fund for Special Circumstances

• Merits: Provides a structured, long-term mechanism to support families in distress without directly violating safety policies. It demonstrates corporate social responsibility, improves labor-management relations, and helps resolve the strike.
• Demerits: Requires an initial financial investment and demands clear, transparent criteria to prevent future misuse or unrealistic expectations.

---

Recommended Course of Action

I would recommend establishing a Workers' Welfare Fund alongside a immediate, one-time ex-gratia humanitarian aid package for the family.

This approach maximizes overall utility by:

1. Resolving the Strike: Ending the protest restores operational efficiency and minimizes financial losses for both the company and the workers.
2. Supporting the Vulnerable: It prevents the deceased worker's family from falling into absolute destitution.
3. Preserving Safety Standards: By keeping the compensation distinct from regular insurance claims, the company maintains its strict stance against workplace intoxication, ensuring safety rules remain respected.