Chapter VI (Continued): Determination & Calculation Of Compensation

You will remember that we started last month to discuss and explain certain provisions of Chapter VI of the COIDA. Due to large number of sections in this Chapter, and the importance of some of them, we have decided to deal with it in two parts. Even then it is an effort to summarise only the more important sections.

I have pointed out that where a person sustains an injury which eventually results in a permanent disability of more than 30%, a life long pension will be paid as compensation. Now it is obvious that a person with a severe disability will find it difficult to obtain an alternative employment. Should this person be in need of a lump-sum to purchase for example a house or obtain a form of transport, a lump sum as part of the monthly pension, as prescribed in the Regulations, can be paid out taking into account that the monthly pension will decrease.  In terms of section 52(4) the Director-General can control the payment of the lump sum that is the DG can pay the seller directly to protect the pensioner against possible waste of money.

Section 54 is also an important provision. It contains an enormous amount of information all to do with the procedures to be followed when the employee dies as a result of the accident. In my view this section is one of the most complicated in the COIDA and unless you familiarise yourself with the principles and procedures you will not be able to fulfil your duties to assist the dependants to obtain their compensation in whatever form.

Section 54 deals mostly with the following:

  • Who the beneficiaries are and the principles relating to the calculation of the benefits;
  • The expression “dependant” appears on numerous occasions in this sub section. Last month I promised you that I will in future give a comprehensive explanation on what exactly is meant by this expression as defined in section 1 of the COIDA;
  • The difference in the methods of calculation for the widow or widower and the children;
  • The maximum amounts of pensions payable to the dependants;
  • The maximum periods of pensions payable to dependants;
  • The maximum period payable to a child; and
  • Amounts payable for funeral costs, etc.

Section 55 provides for the amendment of Schedule 4 that is the Schedule prescribing the annual compensation amounts.  As pointed out in last month’s column this schedule 4 is annually amended to be in line with the maximum earnings limit which is also published in the Government Gazette.

Section 56 although it is one of the more important benefits in the COIDA payable to certain employees, it is also the one most neglected one in the Act. The reasons for this are numerous but ignorance on the part of the employees as well as the legal profession are the main causes. If you are familiar with the section you will agree that the onus to initiate the procedures to claim is not the employer’s duty. The laxness of the Department of Labour is aggravating the situation. Their reluctance to properly and formally investigate the serious accidents as was intended by section 32 of OHSA, is the main problem in the sense that no one really knows what the cause of the accident was.

Why is section 56 unique in the context of the Act as a whole? The underlying principle embodied in section 56 emanates from a division of our common law namely the law of delict. It is a legal remedy whereby a person can claim common law damages from a wrong doer when e.g. such a person is injured through the act of another person or persons. This exception in the COIDA lies in the fact that the rest of the Act is based on the so called no-fault rule. To be awarded compensation in terms of the COIDA the fault rule is totally irrelevant. Neither the employer’s fault (negligence) nor that of the employee is taken into account when the CC decides whether the injury or disease is work related as defined in section 1 of the COIDA. For the purpose of awarding compensation (please note not damages), the fault (negligence) of the two parties is ignored. When it comes to section 56 it is absolutely necessary to investigate which party’s negligence was the proximate cause of the accident. If it was due to that of the employer (specifically senior staff members listed in section 56), the injured employee is entitled to a lump sum (damages for loss of future earnings) over and above the normal compensation. That is why the department of labour should investigate the serious accident as prescribed in the OHSA, for obvious reasons. Unfortunately they are neglecting this statutory duty and the injured worker seldom has the legal background and access to the operations of the employer.

Because of the statutory difference between the no-fault compensation and the common law damages principles, the procedures to claim for the two differ drastically.  Let me summarise to enlighten you:

  • All injuries occurring in the workplace must be reported to the CC on the prescribed forms. Additional information required by the CC must also be supplied;
  • The damages can only be awarded in terms of section 56 if the employee has instituted a claim and has proved, through sufficient evidence, that the employer’s negligence was the cause of the accident. If the employee does not claim for damages what whatever reason, it is not a transgression of the Act. To claim or not to claim is solely his or her decision.

Literally thousands of employees never claim in terms of section 56 due to ignorance and a lack of funds to appoint a legal representative.  The lack of knowledge of the section 56 procedures and principles amongst the members of the legal profession is also something that is well known in workers’ compensation circles.

Till next time.