Although no part of the COIDA can be said to be unimportant, this chapter is regarded by experts as particularly important when it comes to the administration of the Act.   The reason for this is mainly that the CC’s office is far more focussed on the obligations of the employers than the rights of the injured workers for whose purpose the legislation was originally established.  There appears to be no sympathy with defaulting employers whilst the CC’s obligations to injured employees leave a lot to be desired.  Late payment of benefits to the injured and medical accounts are regularly reported in the press and discussed in appropriate forums but to no avail.

Therefore, it is important for employers to be fully aware of these obligations provided for in the Act in order to avoid being penalised for every possible mistake.

Summary of the important obligations in chapter IX

The sections that are relevant relate to:

• A person or company carrying on business and who employs someone shall within the prescribed time register with the office of the CC.  The form used for registering must be in accordance with the one prescribed in terms of the Act.  The employer should be familiar with the procedures and the relevant prescribed forms;
• The employer shall for at least 4 years after the date of the last entry keep the records of the remuneration paid to employees; and
• Before or on 31 March of each year the employer must furnish the CC in the prescribed form the Return of Earnings for the previous year and the current year. (section 82 )

In section 83 provision is made for the different tariffs of assessment for different industries.  What it means in simple terms is that an employer within a specific industry is assessed according to the associated risk.  As an example it can be mentioned that a mine will be assessed at a much higher assessment rate than that of a bank.  There is also a prescribed minimum assessment for certain employers.  The big risk is where the employer fails to submit the annual Return of Earnings when the CC can then estimate the assessment and the employer will have to pay the estimated assessment which will be considerably higher than the one that would have been based on the earnings furnished as explained above.

The heading of section 84 can be very misleading.  Only the state and some licensed local authorities are exempted from paying assessments.  Every employer including the State is bound by the compensation for injured employee provisions.  There are two insurance carriers other than the compensation fund namely Rand Mutual Assurance and the Federated Employers Mutual Assurance Co.  The first registers employers and pays compensation in the mining industry and the latter caters for the building industry.  Employers in these industries pay assessments to these mutual associations so they are “exempted” from paying the CC.  They are, therefore, not in the true sense of the word “exempted” from paying assessments.

Section 85 verifies the fact that it pays financially for employers to promote safety in the workplace.  Although there is a standard rate for all employers in a specific industry, the CC can award a lower rate of assessment if it is clear that the employer’s claims cost is far less than the assessments paid.  The opposite can on the other hand lead to an increase in the assessment rate and thus a higher assessment.  Employers must apply for such a reduction as the CC will not out of own motion take the initiative.

Sections 86 to 88

These are straight forward sections and deal with the calculation and the payment of assessments.  Just a single remark, please pay the assessment before the due date to avoid hefty fines and penalties.

Section 89

Ever heard of a good standing certificate?  It is a certificate that a contractor must obtain to the effect that he has registered with the CC and that his assessments due are up to date.  The principal for whom the contractor is doing the work must insist on such a certificate.  Should the contractor fail to register and pay assessments up to date, the principal will be held liable as if he is the employer of the employees of the contractor and pay the assessments.  This is an important section and employers should always bear it in mind.

Till next month

Medical costs in terms of Chapter VIII of the COIDA were recently labelled by the CC as the biggest medical scheme in South Africa. Whether this statement is technically correct as it is not registered as such, is not relevant.  The fact of the matter is that it is a huge fund with much more benefits than that of the traditional medical schemes. It provides for a much wider spectrum of benefits. Let me give a few examples:

• When an employee meets with an “accident” the employer is legally obliged to supply transport to a hospital or doctor.  (Section 72).  The transport cost emanating from this is according to the COIDA paid by the employer.
• According to section 73 the CC shall be liable for the medical costs for a maximum of 2 years.  Thereafter the CC shall evaluate the extent of the residual injuries and if applicable award compensation for permanent disablement.  At the same time the payment of medical costs will be terminated.

The exception to the 2 year period [subsection 73(1)] is that the CC can extend the 2 year period if the CC is of the opinion that further medical treatment will reduce the disability should the medical treatment be prolonged.
Section 74 of Chapter VIII compels the medical practitioner to submit ”     within 14 days after having for the first time examined an employee injured in an accident or 14 days after having diagnosed an occupational disease in an employee furnish a medical report to the employer concerned in the prescribed manner”.  (Usually a W Cl 4 for an occupational injury).  I hope for the sake of all concerned in the medical profession to take note of this legal obligation.  If you do not get paid do not always blame the state.  (Section 74(1).  The 14 days mean exactly what was intended…Should the CC require further medical reports from the medical officer to adjudicate a claim, no further medical fees will be payable until such time as the report is submitted.  No levies or other fees may be charged as in the case of our medical schemes.  No amount for treatment can, therefore, be recovered from the injured employee or employer (subsection 76 & 77).

Cost of medical treatment for IOD’s In South Africa.
The medical aid supplied for the treatment of injured employees in terms of the COIDA is indeed as substantial as suggested by the CC.  The CC shall before determining the medical rates first consult with the Medical Association of South, the Chiropractic Association of South Africa and the Dental Association of South Africa.  Please note that no medical fee in excess of the tariffs annually published in the Government Gazette may be recovered from the patient, the doctor or the employer. (Subsections 76 and 77).
The expenditure in connection with Medical Aid
The amounts of medical aid supplied to injured employees are according to the archives from the Dept of Labour’s website for the most recent financial years published are as follows:±
                                            R million
2006/2007                        R1,415
2007/2008                        R1,287*
2008/2009                        R1,540

* How the ±11 % decrease came about for this financial year’s figures is a mystery.  Maybe one should keep in mind one of the recent disclaimers by the Auditor General who could not express an opinion on the CC’s Annual Report.
Another worrying aspect is the fact that the ratio between the compensation and the medical costs is changing every year.  Compensation was supposed to be 60% and medical costs 40%.  The last time I had a look it was the other way round (at least).  So the CC might be correct in his assumption that workers’ compensation is the largest medical aid scheme in the RSA.  It was, however, never meant to be. Due to a lack of space, I cannot give you the historical background.
There are peculiar practices concerning outstanding medical accounts.  The failure to timely pay medical accounts has lead to debateable business practices.  As there is very little that you and I can do to rectify the situation, I would leave it there with the hope that the investigations going on will produce results.

Till next time.

From the previous columns I presume that you have mastered principles such as:

• Temporary Disablement;
• Permanent Disablement;
• Benefits payable for the different types of disablement;
• Procedures and types of benefits payable in cases of fatalities; and
• Increased compensation due to the negligence of the employer.

I sincerely trust that you have studied the provisions of these sections, failing to do so will not qualify you as a workers’ compensation administrator.

Occupational Diseases   (sections 65 to 70).

As can be deduced from the title of the Act (Compensation for Occupational Injuries and Diseases Act, 1993) this Act does not only provide for cover against occupational injuries that are work related but also against occupational diseases that are work related. Section 1 of the COIDA defines occupational diseases as follows:

‘“Occupational disease” means any disease in section 65(1) (a) or (b)” 

65 Compensation for occupational diseases

(1) Subject to the provisions of this Chapter, an employee shall be entitled to the compensation provided for and prescribed in this Act if it is proved to the satisfaction of the Director-General- 

(a) that the employee has contracted a disease mentioned in the first column of Schedule 3 and that such disease has arisen out of and in the course of his or her employment; or 

(b) that the employee has contracted a disease other than a disease contemplated in paragraph (a) and that such disease has arisen out of and in the course of his or her employment.

Why was it necessary to include these two subsections if it in fact both provides for compensation for occupational diseases? There is, however, an all-important difference between 65(1) (a) and (b). Under the 1941 Act compensation was not payable if the disease was not listed. Under the 1993 it can be paid but the principles associated with the subsections differ drastically. I will summarise the difference briefly:

If a “disease” and “work” are listed in the two column of Schedule 3 of COIDA, the onus to disprove that such a disease has arisen out of and in the course of the person’s employment is on the CC. (See confirmation of this in section 66). On the other hand if the “disease” is not listed in Schedule 3, the onus to prove that the disease has arisen out of and in the course of his or her employment is on the employee who alleged that it is a work related disease.

The calculation principles of the compensation are the same for occupational diseases as that for injuries. I need, therefore, not discuss it as it was done last month.

There is, however, a small difference between the two namely the period in which to report to the CC. In the case of an injury it must be reported by the employer within 7 days and having received notice of the accident. In the case of an occupational disease it must be reported within 14 days after having received notice that the employee has contracted the disease.

Conclusion

Occupational diseases are for various reasons severely neglected in South Africa. One of the main reasons is that it is far more difficult to diagnose it than a traumatic injury. Doctors are not familiar with the principles associated with occupational diseases, something which is also obvious during the examination of the patient. How many doctors ask the patient about his occupation or the nature of his duties? A lot of training lies ahead to improve this situation.

Till next time.

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.

When someone is injured on duty in an “accident” as contemplated in section 1 of the COIDA, this accident could result in various conditions and thus different forms of compensation. The expression “compensation” is, therefore, used in the wide sense of the word that is associated with different kinds of benefits. The injury leads to a specific medical condition which determines the nature of the payments of compensation. For the sake of a better understanding of what is to follow in the column let me illustrate how an injury can lead to different kind of benefits:

Temporary total or partial disablement that is the period in which the employee is receiving medical treatment and is unable to work.

The benefit payable will be 75% of the monthly earnings of the injured taking the earning limit prescribed in item I of Schedule 4 of the COIDA into account.

Permanent Disablement

The amount payable for this disablement will differ, the fact is it can differ drastically. It all depends on the percentage of the permanent disablement as determined by the office of the CC. The % pd can either be listed in Schedule 2 of the Act or if not listed, a percentage fixed by the CC office claims department. If the percentage is 1 to 30 % it will be a lump sum calculated according to according to item 2 of Schedule 4 of the Act. If the percentage is 31% to 100% it will be a monthly pension for life to the injured calculated in accordance with items 4 and 8 of Schedule 4 of the Act. 

Fatal Accidents

The benefit payable to the dependants of an employee who was fatally injured in an accident is also a monthly pension. A lack of space prohibits me from discussing who the dependants might be but I promise that this subject will form part of a column in future. It is a difficult subject that needs to be well understood to ensure that everybody is getting what is due to them. It is in any case a difficult subject if one is not familiar with the relevant laws. Basically the way a pension is calculated is set out in items 6 to 10 of Schedule 4 of the Act. Item 10 deals especially with the funeral costs paid by the Compensation Fund.

Section 47 

Provides for the compensation for temporary disablement, a brief overview of which I have given you above. The maximum period that compensation can be paid is two years. Thereafter the CC must determine whether the employees is suffering from pd and fix the % pd so that the compensation for this condition can be paid.

Section 49 & 54

These sections also need a closer look. It was discussed above but as an introduction for a clearer understanding of the word compensation. When you deal with these aspects of workers’ compensation always keep in mind that you cannot deal with these sections in isolation. The Schedules 2 and 4 are just as important and you must be totally familiar with them otherwise the sections in themselves will make no sense. Also keep in mind that compensation for pd for a person under the age of 26 or in training has a different formula to their benefit. See section 51 in this regard.

Please also note that Schedule 4, Manner of Calculating Compensation, is annually amended per Notice in the Government Gazette. Unless you familiarise yourself with the latest Schedule 4, you will not be able to verify the correctness of the CC’s calculation of the compensation.

There is a further benefit payable in connection with injuries on duty. This concerns the payment of the medical costs incurred when someone is injured on duty. This benefit will be discussed under Chapter VIII of the columns.

Due to a lack of space I am forced to write a follow-up on Chapter VI of the COIDA. The rest of the Chapter contains several important provisions that are often ignored maybe due to a lack of knowledge.

To be continued.

Till next time.

This chapter of the COIDA provides for the procedures and relevant matters to be followed by

• Employees
• Employers and
• The Compensation Commissioner (CC)

to deal with claims emanating from injuries on duty.  It thus prescribes how to constitute a claim under the Act.  For those who are involved in claims administration it is essential to be familiar with the provisions that are contained in this chapter.  There are quite a few technical issues included in sections 38 to 46 that are sometimes confusing to many people and I intend to point these out to you.  The rest are self-explanatory and you can study them without assistance.  The ones that I will deal with can be termed as “frequently asked questions”.

Section 38 deals with the reporting of accidents by employees to their employers.  The important aspects in this regard are:

• Reporting can be in writing or verbally;
• It shall be done as soon as is possible (please do not confuse this with the reporting provided for in the OHSA);
• Failure to report the accident to the employer does not mean that the employee shall not be entitled to compensation if the employer “had knowledge” from another source about the accident.

Section 39 provides that the employer shall in the prescribed form (such as the W Cl 2) report the accident to the CC.  This report must be within seven (7) days after “having received notice” about the happening of an accident.  Many employers are under the impression that it is within seven days after the accident happened.  This is obviously not correct.  Let us say the employee waited 10 days before reporting the accident to the employer, the latter will then be unable to report it seven days from the date of the accident; that is the reason for the procedure structure of the section.

The most common incorrect statement that I have encountered with workers’ compensation is that the “accident” was not reported because the individual dealing with the claims in the organisation does not believe the employee’s allegation that he was injured at work.  The reasons for the disbelief are numerous but not relevant for this document.  I will for your benefit quote the subsection which should never be forgotten:

“Section 39(7):  For the purposes of this section an accident includes any injury reported by an employee to his employer, if the employee when reporting the injury alleges that it arose out of and in the course of his employment and irrespective of the fact that in the opinion of the employer the alleged accident did not so arise out of and in the course thereof.”

The bottom-line is that you have no discretion to decide whether the incident reported to you by the employee is a reportable “accident” as defined in the COIDA.  The only person who can and will eventually decide about the validity of the claim is an officer in the CC’s office.  So just report and make your view quite clear on the prescribed form where the relevant question about the accident is posed.

Section 40 gives the CC the powers to request further information from the employee which must be furnished to avoid a repudiation of the claim.  Subsection 40(3) on the other hand compels the CC to supply information to the injured employee if it is requested.  The implication of this is that the CC is legally obliged to reply to correspondence, something that does not seem to be common knowledge in that office.

Section 44 is important as it ties in with section 38 which was discussed above.  This section deals with the prescription of a claim and reads as follows:

“A right to benefits in terms of this Act shall lapse if the accident in question is not brought to the attention of the commissioner or of the employer or mutual association concerned, as the case may be, within 12 months after the date of such accident.”

The implication of this is that the “as soon as possible” in section 38 in actual fact can be 12 months after the date of the accident.  Technically speaking that is the correct interpretation but let me assure the readers that the longer the employee waits to report it to the employer the more difficult it becomes to prove the accident.  Remember the onus to prove an accident is squarely on the employee as he or she is the claimant, not the employer.  The employer reports the accident; he does not institute the claim against the fund.  It is always difficult to convince the CC that an employee was involved in an injury on duty if he waits months before reporting it to the employer.

The provisions of sections 45 and 46 have, as far as I can gather, become obsolete.  The mechanism of formal hearings to decide about the acceptance or not of a claim makes it so much easier and the decision transparent.  The rules and procedures relating to formal hearings are fully described in these sections.  But then I suppose it is so much easier to repudiate a claim and wait for a formal objection by the employee which will then be heard years after the event.

Till next month.

Section 22 is in principle the most important section in the COID Act. Why? Because of the fact that the right to compensation is vested herein. It is also the section of the Act that creates the main difference between workers’ compensation and private insurance whether it is long or short term. A schematic outlay may perhaps assist you to understand this without having to study the law of insurance.  This difference is in any case a debate between academics that has been going on for years. The advocates of the law of insurance versus the group that maintains that workers’ compensation only contains certain insurance characteristics but is not insurance in the true sense of the word.  Let me point out a few differences:

Due to a lack of space I cannot cover the section in totality but strongly advise that you familiarise yourselves with this section as it contains principles that you should know to be able to effectively administer workers’ compensation insurance.  I will briefly point out the most important principles that are contained in this section of the COIDA:

The periods for which payments in respect of periodical payments for temporary total disable are made;

The rule pertaining to accidents that are caused by the wilful and serious misconduct of employees themselves;

Cover for accidents happening when employees are conveyed free of charge by employers; etc.

Section 23 of the COIDA is also an important section to read.  It deals with accidents outside our borders, an aspect that is becoming more and more relevant. Due to the mobility of RSA employees to countries especially in Africa is the reason for this. I have over the years noticed that only a small number of employers are familiar with the provisions in this regard and that employees are negatively affected by this fact. So if it is required from your employees to temporarily work across the borders you better be aware how to ensure cover; safeguarding not only them but also yourselves against common law claims.

Section 32: Compensation May not be alienated or reduced is another one to be wary of.  It is not as technical as it would appear at first. I am sure that you will comprehend the implications of this section. 

If there is doubt about any of the provisions in Chapter IV you are welcome to contact me through the address on this website.  I will gladly assist if I can.

Till next month

Compensation Fund (Section 15)

The assessments that you pay annually to the Compensation Commissioner (read the Director-General of Labour) are paid into the Compensation Fund as it is labelled in the COIDA. All other forms of income such as penalties and the interest on investments are likewise part of the Compensation Fund. According to the latest available annual report (for the year ended 31 March 2008) published in terms of the COIDA, the “Three-year financial review, 2005/06 – 2007/08” was as follows: 

Auditor-General (Section 20)

At the beginning of 2011 I promised myself that I will not criticize the CC’s office too harshly. I know they are trying to assist employees but the main reason for my new year’s resolution is that they and the other “role-players” are doing a much better job in that regard. My effort is wasted to even try to compete with them. Let me give you an example. On page 31 of their annual report they stated that “The Fund generated revenue of R3.9billion….” which is in line with the table from their financial report above. The Auditor-General is however not convinced. Again, let him speak for himself. From the AG’s report on the financial statements of the Compensation Fund dated 31 July 2008 the following reading should make you, the assessments payers, a bit nervous. 

“Response of the Auditor-General:

3. …….., I was not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion”
Basis for disclaimer of opinion 
Revenue contributions and assessment debtors
5. Various materially incorrect assessments have been recorded by the Fund in the year under review and in previous years. Inadequate monitoring of controls over overdue assessment debtors resulted in the accumulation of incorrect provisional assessments and materially incorrect debtors with credit balances. The lack of a proper management framework for the continuous review of the ageing of assessment debtors has resulted in an unreliable ageing of assessment debtors being applied for the purposes of determining the provision for credit losses. Due to lack of appropriate records, I was not able to perform alternative procedures.” 

Etc, etc. I say no more.

The AG’s Report then queries the claims incurred, the unexplained net charge arising from the Treasury function and also disclosures not made and concludes with the words:

“Disclaimer of opinion
9. Because of the significance of the matters described in the basis for the disclaimer of opinion paragraphs, I have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial statements of the Compensation Fund. Accordingly I do not express an opinion on the financial statements”

How the Funds are utilised (Section 16)

Now what is the Compensation Fund used for? In main for the following:

• Paying compensation to the injured employees, after all that was the idea behind Workers’ Compensation;
• Paying the medical accounts in respect of the injured. Not always directly to the provider of the service. A considerable number of the accounts are now being taken over by “brokers” who buy the accounts from the service providers at a reduced price (if you can believe that). The “broker” then submits the accounts to the CC’s office for speedy payment. Do not try to find that in the Act, it is not there;
• Creating and maintaining a reserve fund;
• Paying the remuneration of the staff employed at the CC’s office;
• Payment of the CC’s accommodation and equipment such as astronomical amounts for IT hard- and software; and
• Incidental payments which is not a small amount.

I can continue in more detail but you at least have a point of departure to verify the correctness of your assessments and to monitor how your assessments are being spent. 

Good luck, you will need it.

Till next month

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 “..be 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.

Louis

I have decided that attempting to improve the service at the Compensation Fund of the Department of Labour, as it is lately called, is an utter waste of time. They are apparently fully aware of the chaotic situation at the “office” judging from the evidence presented at portfolio committees of Parliament from time to time.  Between them and who they blame for the present situation there is apparently no solution, only wasted funds. I will rather attempt to write you a cryptic manual on the Act itself to assist, if possible, with your administration of your Injuries on Duty (IOD’s).

Definitions in the Compensation for Occupational Injuries and Diseases Act, 1993 (COIDA)

I have over the years met many people who, after reading the Act in detail, tend to give their own interpretations to the words and phrases contained therein. They might underestimate the drafters of the statute or it might also be simple ignorance of how to go about. The golden rule, however, is to revert to the definitions contained in section 1 of COIDA in which the definitions of a large number of words and phrases can be found. A definition of such words and phrases can only mean what it is intended for. That my dear friends is the good news, the bad news is that even these definitions can in themselves be ambiguous or too vague. It is, therefore, not surprising that there are hundreds of cases that have been presented to our courts of law, many at the highest court of appeal. These judgements, binding on us all, give the final interpretation of what is intended by the definition in the Act.

Let me give you a few examples to illustrate the point. The word “accident” appears in numerous places in the COIDA. It might sound a simple and self explanatory word that you yourself can interpret. Caveat my friend; there are many judgements in our case law that rebut this idea. The definition reads as follows:

(i) “accident” means an accident arising out of and in the course of an employee’s employment and resulting in a personal injury, illness or the death of the employee; (xxiv)

You will note that there are three elements contained in this definition namely:

1. “arising out of..”
2. “in the course of..” and
3. “personal injury”

There is such a large number of cases associated with these three elements that I cannot even consider listing them, not even the more important ones. Apart from the fact that I lack the space to do that, this is also not a freebie column, after all even consultants must make a living.

Another example of an important definition is that of an “employee”. Although quite a lengthy one you should make sure that you are familiar with the contents thereof. The State is very sensitive about the worker’s rights so read it and make sure you know what it means. The crux of the definition is whether a person has entered into a contract of service as opposed to a contract for service. Again, over the years the courts have spent many hours debating and deciding on this question. Some of the judgements are so voluminous that it resembles a legal handbook dealing with the law of contract going back to the ancient Roman law.

Conclusion

You cannot read the Act in isolation without:

1. Reverting to the definitions in section 1 of the COIDA; and
2. Keeping in mind that many of the definitions were considered by the courts and these judgements form part of the definitions.

Remember the interpretation of Statutes (Acts) is not an easy task. It takes an experienced individual to do that. If in doubt, contact such a person. I am afraid you will not find much assistance from the state department administering the Act. The expertise is missing and to re-establish it will take many years.

Till the next instalment in December 2010 of the manual.