COIDA Chapter II: Coida Manual

The Second Chapter of the COIDA deals with the administration of the Act. It does not produce the most exciting reading that you can wish for but it is important that you know what your annual assessments are paying for.

This chapter was drastically amended by the 1997 Amendment Act. The Compensation Commissioner (CC) was replaced by the Director General of the Department of Labour as the accounting officer [Section 4(1)].  The reason for this amendment, which was a South African first as far as workers’ compensation is concerned, is unclear. Gossip regarding the reason for this step was that the Labour Department needed a large sum to rescue another Fund. The Compensation Fund had billions of Rand invested so that it was the obvious target for this purpose. I personally think that this objective combined with the lust for power was the primary reason.  The fact is that this amendment to change the boss of the Fund did not enhance the performance of the office of the CC. The latter, legally speaking, became a figurehead with the result that the powers of the CC were nullified. The Compensation Fund is now in dire straits because of the legislator’s pure ignorance caused by the instigators responsible for the fundamental change in the operation of worker’s compensation. Ignoring the fact that a few of the Directors General of the department have been suspended over the last number of years, the question who is now running the show at the CC’s office, arises.

The result of the 1997 amendments was that the phrase CC in sections two to seven was changed to Director General. That may explain a lot about the worrying aspect of the level of service.

Compensation Fund

In terms of section 2(2) the officers employed by the Director General to assist with the administration of the Act shall be paid out of the National Revenue Fund and shall “ reimbursed out of the compensation fund for the expenditure concerned”. In simple terms that means that all remunerations, medical fund contributions, state pension fund contributions etc, shall eventually be paid by the Compensation Fund and not the state, i.e. the taxpayer. The Compensation Fund was created and is maintained from the assessments paid by employers. The fine print; you the employer is responsible for the Compensation Fund. Keep this in mind when the accounting officers start explaining to portfolio committees of Parliament how they through pure ignorance squander your money. Perhaps that will change your attitude about the service level.

Functions of the Director General

Section 4 informs you of the powers of the Director General. It is a very long list which I will not bore you with. Suffice to say that the powers have all been delegated to the officers of the CC, more or less. I will conclude this part by suggesting to you that the Director General has very little to do with the administration of the COIDA. in fact, with due respect to the legislator, the 1997 amendments were in my opinion a waste of time and money. The only result was to disempower the CC; you can only speculate what the reason for this madness was.

Compensation Board

This Board is established in terms of section 10 of the COIDA. The constitution of the Board is regulated by section 11 and has as an objective a wide representation of parties associated with worker’s compensation in South Africa. When drafting this Act a word of caution was given to me by a Canadian expert not to create a Board in the legislation for submission to Parliament; his reasons cannot be repeated to spare the members of the Board embarrassment. However, the pressure from political and trade union circles was huge and the legislator wanted to please all the persons concerned. The result is now history and embodied in the COIDA.

It soon became apparent that my Canadian friend was spot-on in his caveat. The mess that the Compensation Fund is at the moment in could not have been prevented by a Board ignorant in worker’s compensation.  I immediately realised that the newly appointed members each had his or her personal agenda to bring to board meetings. They included inter alia the following:

  • Occupational diseases that are not covered by the Act;
  • Ad nausea debates about the subsidy to NOSA ignoring the fact that they had no mandate from the founder members to change the policy and were not even aware of who the founder members were;
  • Requests to obtain subsidies for their own consultancies and organisations.

The Board submitted not a single policy matter recommendation to the Minister. Judging from their own evidence before parliamentary committees nothing has changed and the Board, it would appear, is still a dead duck.

Next month we will look at Chapter III of the COIDA.  

Have a pleasant December 2010 rest and a good 2011.  

My best wishes for the year ahead, you are going to need it.