“To err is human, to really screw up you need a computer.”  (Anonymous from Wikiquote)

Statutory benchmarks
You will recall (read “remember”, not the recall of politicians) that I promised to supply you with legislation benchmarks to evaluate the performance levels in respect of the awarding of the benefits to which the injured employee (and the employer) are statutorily entitled to.  The first are statutory benchmarks as provided for in the COID Act.  I will quote only the three most important ones relating to the rights of the injured employee:
Remember what the benefits are for an injured employee?

1. Medical Costs
2. Temporary Total Disablement Payments
3. Permanent Disablement (If applicable)
4. Pensions to Dependants in Fatal cases
5. Burial costs in fatal cases.

The time limit provisions prescribed by the Act are numerous.  For the State to hide behind clichés as a smoke screen for a lack of performance is not going to work.  Returning to the basic legal framework for measuring performance will always be the crux of the matter.  That is why the legislator has stipulated time limits.  “….but not exceeding one month” is the absolute maximum period allowed by the legislator for the Compensation Commissioner to compensate the injured because most employed people are paid at least as often as once a month (of course, many are paid weekly or fortnightly).  Ask around how long these people wait to be compensated, if ever.  The same principle underlies the benefits for permanent disablement and fatal cases.  It is not charity!!! You have paid your assessments to cover the costs.  You will be treated with “zero tolerance” should you as the employer fail in your duty.

Employers’ Rights
I propose that the least that you can expect of the Compensation Commissioner in exchange for the annual assessments that pay is that he compensates and cares for the injured.  However, you will see from press releases such as this recent one that the Compensation Commissioner is facing serious problems:
 “The Democratic Alliance on Monday called for a forensic investigation of the Compensation Fund (CF) and for the fund to be put out to tender.
The latest disclaimer by the Auditor-General in his report on the CF tabled in parliament, confirmed the evidence of complaints to the DA that the fund was in serious disarray, DA spokesperson Anchen Dreyer said.
According to the AG, the extent of the mismanagement of the CF ranged from a complete breakdown of internal controls and a filing system in complete disarray, to non-compliance with applicable legislation.
This sorry state of affairs at the CF was leaving thousands of vulnerable beneficiaries out in the cold, she said.  The CF was supposed to assist employees who had had the misfortune of contracting an occupational disease or suffering an injury while on duty.”
The response to that was a series of press releases by the Department of Labour, raising the usual clichés in defence.  A “lack of skill”, “insufficient IT infrastructure” and “bad management by predecessors”.  “Zero tolerance” and “fast tracking” are amongst the quick-fix measures that will be implemented.  Usually outdated IT infrastructures are blamed for the problems, despite the numerous “launches” of new systems.

The End
Now you, the workers’ compensation administrators out there, can make your own assessment about the manner in which both the employee and you are being treated.  Then, possibly, you can decide what you have to do.

Till next month.
Louis van Assen

Introduction
Last month we looked at the stringent rules introduced in the COID Act to encourage people to adhere to the provisions of the Act.  We also discussed the reason for this namely to ensure that the injured employee is well looked after.  Not only for humanitarian reasons but also because his or her common law rights were taken away by legislation (COID Act) and replaced by a no-fault rule liability for employers and the State.  If you want to refresh your memory, read last month’s contribution.
I concluded that, in my personal opinion, that the State has to a large extent failed its duty towards the injured employee. I also noted that little is being said by the community about the status quo, and that this might be in line with other trends which can be labelled as politically correct.

The Rights of the Injured
The workers’ compensation legislation has created certain statutory benefits for persons who have sustained a work related accident or contracted an occupational disease.  These benefits are:

• Medical expenses
• Payment of Total Temporary Disablement (TTD) benefits if the injury or the disease resulted in temporary disablement;
• Payment of Permanent Disablement Benefits if the injury or disease resulted in a permanent disablement;
• Burial expenses and pensions to dependants if it was a fatal accident or occupational disease; and
• Increased Compensation where the injury or the disease was due to the negligence of the employer or a senior manager in the hierarchy of the organisation.

  I will next month supply you with statutory benchmarks to enable you to evaluate the present performance level of the workers’ compensation legislation administrators.  Let us first see what the legislator’s intention was.

The functions of the Compensation Commissioner
Let’s look at role of the Compensation Commissioner and staff before we proceed.  Before an employee can be awarded the benefits listed above, the Compensation Commissioner or one of his authorised staff members must decide whether the injury sustained or disease contracted was an “accident” or an “occupational disease” as defined in the COID Act.  After having received the prescribed notification by the employer, sections 45 and 46 amongst others, prescribe the duties of the Compensation Commissioner to enable him to accept the claim (rather than repudiate it) when in doubt.  The space does not allow me to quote verbatim the two sections of the Act but trust me the legislator’s intention is clear.  The whole idea boils down to the fact that the onus is on the Compensation Commissioner to investigate and if necessary convene a formal hearing to verify that the case reported is an accident or disease for which the employee should be compensated.

It is common cause, judging from our case law and other legal authorities, that the Compensation Commissioner’s duties in this respect are administrative – not judicial.  I will not bother you with the legal technicalities of the different roles, but I urge you remember one principle, the Compensation Commissioner’s main role is to assist employees who were injured on duty.  The mechanisms created by the COID Act such as sections 45 and 46, were deliberately done to ensure that the injured employees are fairly treated.  These mechanisms were never meant to be judicial procedures to try and nail the employee in the belief that all people are corrupt!  Therefore the majority of claims can be dealt with without having formal hearings or other in-depth investigations.  The problem is, how many “problem” claims are at present being dealt with by using sections 45 and 46?

Thought for the Month
The main objective of workers’ compensation legislation is to provide SECURITY for the injured or sick employee.  The benefits are paid from a statutory Fund and not by the employer who might not be in a financial position to compensate the injured employee.  Also very important is that the security is enhanced by the fact that the employee will be compensated even if the employer has not paid assessments or worse has not even bothered to register.  Can the employee still rely on this so-called security?

Next month will be the last instalment in the employee-rights saga.  I will give you several benchmarks to evaluate the system.  If it does not meet the criteria it will be for you, the employers, who are funding this scheme to decide what can be done.

Till next month.
Louis van Assen

“The perfect bureaucrat everywhere is the man who manages to make no decisions and escape all responsibility. ” BROOKS ATKINSON, “Once around the sun” 1951

Penalties and other punishments
In the COID Act there are numerous provisions to keep the employer on the tip of his toes, such as:

• If you do not submit your Return of Earnings on time you will be penalised for this offence. A penalty will appear on the Notice of Assessment to inform you that the transgression has not gone unnoticed. I presume that these Notices are still  part of the process;
• If you fail to pay your assessment punctually as required, rest assure you are in for an additional amount in the form of interest. Further penalties for your failure will also be levied. I will not bother you with the relevant sections of the COID Act but trust me it is in the COID Act and the effects will be severe if you as the “client” do not adhere to the provisions of the COID Act;
• The late reporting (or failure to report) of accidents in the prescribed way to the Compensation Commissioner can cost you dearly. I have no idea what the present formula in that office is for the calculation of the penalty but what I do know is that the Compensation Commissioner has a wide discretion in this regard. So it is important that employers should be wary of the provisions and related procedures regarding reporting of accidents.

The above examples are only a few provided for in the Act, there are numerous other penalties that can come into play.  Judging from press releases and other forms of communications originating from the officials of the Labour Department, they are serious about keeping employers in line. Trite phrases such as “zero tolerance” with offenders are bandied about which create the impression that guilty employers will really encounter the wrath of the civil servants administering the legislation. So please familiarise yourself with the legal as well as the administrative aspects of workers’ compensation in your business.

The object of the penalties
So why were all these severe measures introduced to prod you to act in accordance with the provisions of the COID Act?  The answer to that is actually a very simple one. The legislator has through the workers’ compensation legislation taken away the employee’s common law rights in toto. The common law allowed the injured employee to sue the employer for common law damages if the employer through negligence caused the employee to be injured. Under the present and previous Acts an injured employee, or in the case of a fatal occupational injury or disease, the employee or the dependants are under no circumstances allowed to institute a claim for damages against the employer. “Under no circumstances” as stated above means exactly that, there is no exception. The Compensation Commissioner has stepped in as the party to compensate the injured or diseased if it is occupationally related. This liability is an absolute one as the question of who has caused the injury is not relevant for the payment of the compensation. There is, therefore, a duty on the employer to ensure that his or her duties in terms of the COID Act are performed, this is after all the trade-off for the total indemnity of any claim against the employer by the employee. That is also the reason why the state must ensure that the employee is not worse off because of the loss of the common law rights.

The other side of the coin
Taking away rights from someone as a trade-off places an obligation on the state to see to it that the quid pro quo is delivered as was intended. So policing the employer as the Compensation Commissioner does it, is quite appropriate. The legislator has, however, advanced one step further when legislating that the State in the form of the Compensation Commissioner will in the place of the employer award and pay the compensation provided for in the Act. You guessed it, how is the Compensation Commissioner that was “appointed” by the state performing to complete the trade-off cycle? That, and who is monitoring the bureaucrats supposedly appointed to perform the latter function is the problem.
I leave it up to you to evaluate the state’s performance as to whether they are delivering the service as enthusiastically as they are policing employers to perform. All I can say is that, in my experience, the CC’s performance in delivering a service to the injured employee – the most important party – is dismal, to put it mildly. Next month I will list a few of the employee’s rights that were created by statute in place of those taken away.  Then you can judge for yourself how fair the trade-off is at the moment. Are we to see another state insurance scheme drifting to the depths of the one that is now by own admission technically insolvent?  You know the one – with the scaled down benefits and to which you contribute when you fill up?  Surely there must be someone around who must start to protest the inequity between those paying and the arrogance (inefficiency?) of the bureaucrats who are supposed to deliver the service.

(To be continued)

Till next month.

The consultant
A decade and more ago the appointment by a manager of a consultant implied at least one of two issues namely: 1. that the manager was either incompetent or 2. the manager was per se corrupt for appointing someone to assist with a specific task. Judging from the daily and weekly financial media the situation has since changed dramatically. Nowadays it is labelled as “outsourcing”, “sub-contracting”, “private public partnerships” and various other euphemisms. If you doubt my view, read carefully through your financial magazines to see that knowledge or expertise does not come cheaply. Coming into contact with both the state and the private sector I am convinced that we have reached the point where a large proportion of employers and state departments cannot function without properly qualified advisors or consultants, whatever you prefer to call them.

Lack of training?
I am not sure what caused and perpetuates this state of affairs. Could it really be, as some suggest, the political obsession to attain the correct “colour configuration”? Is it cronyism, absence from the job, lack of concern for the needy, apathy, incompetence or even just a general attitude of lawlessness – of getting away with not doing one’s job for as long as one can get away with it? Whatever the cause, its effects are obvious and it is patently clear that many of those who deal with the public have very little knowledge of the subject they are supposed to assist with. I get the idea that the political correctness of the appointment has become such a serious issue that management tends to ignore the training of the people they put in positions critical to the functioning of the organisation. I can only sympathise with the untrained worker who must obviously be in the firing line of the frustrated clients.

Compensation Commissioner’s Office
So what has this got to do with workers’ compensation? A lot unfortunately as they are in the same boat. You see the brain drain does not only refer to people emigrating to Australia, it also includes those emigrating out of the civil service taking with them decades of experience. The result is a serious lack of knowledge of the of the COID Act within the office of the Compensation Commissioner. After dealing with this legislation for more than 30 years I am not being unfair to the staff of the Compensation Commissioner when I make such a statement. I would dare anyone there to prove me wrong. I still deal with the office on a regular basis and the lack of knowledge of the provisions of the COID Act scares me. You see, what people do not realize is that the party at the receiving end when it comes to poor knowledge, is the injured employee. The employer is also negatively affected but the difference is that the latter can afford legal assistance, something which is becoming more and more impossible for employees.

I will relate one recent incident to you that points to some strange goings-on in the office of the Compensation Commissioner which, if as bad as they are depicted, can only have disastrous consequences for the injured employees. As you all know the claims process is a relatively straightforward one. Submit a Report of the Accident, a First Medical Report and if the employee is off-duty because of the injury a Progress Report in which the treating medical practitioner indicates the date that the injured will probably be fit for duty. The doctor decides what treatment is sufficient, such as bed rest, and when the person should be fit to commence his duties.  The Compensation Commissioner, based on this information, then pays the Temporary Total Disablement (TTD) benefits to the employee.

Perusing the following judgement handed down towards the end of last year in the High Court created uncertainties about the correctness of this procedure that has been in place for more than 50 years. The Applicant approached the High Court of South Africa (Transvaal Provincial Division) by way of a motion seeking an order against the Compensation Commissioner and Director-General, Labour for the payment of his TTD-benefits without limiting this compensation by applying an unlawful principle of “active medical treatment” as a prerequisite for the payment of the benefits.

I have had no access to the detail of the course of events in the claim, what documents were submitted and why the case took such a long time to finalise. At the same time the wording of the Founding Affidavit, Answering Affidavit and the Applicant’s Replying Affidavit is so vague and incoherent that I am surprised that the honourable judge could come to any conclusion. Maybe my lack of understanding is aggravated by my disbelief that this issue had to be adjudicated by the High Court at all! The gist of the case is the following.  The Compensation Commissioner insisted that “active medical treatment” is a requirement for compensation. In the Answering Affidavit it is motivated as follows: “The…Compensation Commissioner does not compensate for symptoms of disablement but seeks to address the cause of the symptoms. It is upon the aforegoing (sic) basis that active medical treatment has to play a major role in this regard aimed at reducing disablement and not address the symptomatic cause of disablement”. I must confess that I have no clue what that means.

The judge, however, could not find any definition in the COID Act for “active medical treatment”, just as I couldn’t, and with due respect correctly ordered the Respondents to pay the TTD-benefits. The crucial remark in the finding was: “I could not find any provision of the Act which entitles the respondents to restrict the right of workers to receive compensation during their temporary total disablement in the manner which the respondents restricts such a right”

As far as the “class action” issue which surfaced in this case is concerned, I will rather refrain from any comment as it is so unique that I will leave it to the legal academics to debate.

To return to my point when I introduced this case: if the Compensation Commissioner believes that only Active Treatment can be compensated this can have disastrous consequences for injured employees. Reading the judgement briefly discussed above convinced me that a lot of training is the only thing that will solve the problem

Till next month.

I am in a very helpful frame of mind at present.  I cannot pinpoint the reason for this congenial attitude but rest assure it could be to your benefit.  Being in this mood I have decided to list a few aspects for a brief discussion, aspects that might create problems for you and how to avoid them.  I can assure you that the issues to follow can have serious financial implications for you.  I decided to discuss these matters with you when I experienced, once again this last month, the effects that ignorance of the COID Act can lead to.  So rest assured that these are not subjects that I have chosen simply for writing this column; they are very real problems.
The first pitfall employers often, and I mean often, land themselves into is not letting the Compensation Commissioner (that division that is part of the department of labour) know of the present prescribed details.  Prescribed details? Yes that is exactly what I am referring to.  Details envisaged are name of employer, nature of the business, postal address, business address, etc.  I said prescribed details, why?  Let me quote section 80(1), (3) and (6) to you to illustrate my point.  It reads as follows:

Employer to register with commissioner and to furnish him with particulars
(1) An employer carrying on business in the Republic shall within the prescribed period and in the prescribed manner register with the commissioner, and shall furnish the commissioner with the prescribed particulars of his business, and shall within a period determined by the commissioner furnish such additional particulars as the commissioner may require.
(3) An employer shall within seven days of any change in the particulars so furnished notify the commissioner of such change.
(6) Any person who fails to comply with the provisions of this section shall be guilty of an offence.
(My underlining)

What does this mean in practice?  When you registered your business with the Compensation Commissioner in terms of the COID Act you completed a prescribed registration form W As 1 (“prescribed manner”). 
On this form you supplied information to the Compensation Commissioner’s office such as the name of the employer (a company if applicable), postal and site address of the business, nature of the operations and much more.  After having registered as such, there might in the future of this business be changes of some of the above details.  For the sake of this column I will illustrate a problem commonly experienced by employers.  Let us as an example say that you have originally registered your nature of operations as that of road construction.  Now the Compensation Commissioner’s office assesses a business in accordance with what is commonly known as an industrial rating.  For the Commissioner’s purposes, therefore, industries in South Africa are divided into classes and subclasses.  Each subclass has its own assessment rate fixed in accordance with the nature of the operations and its associated risks.  The rate for road building is R2, 42%.  Should a slump in road building and repairs take place, you then decide to undertake the building of houses for which the assessment rate is only R2, 24%.  However, as many employers will, you fail to advise the Compensation Commissioner as required by subsection 80(3) of the change of activities with the result that you will still be assessed on the higher rate.  When after a few years this fact dawns on your bookkeeper, you request the Compensation Commissioner for a retrospective adjustment.  I am not prepared to predict the outcome of this request but to put it mildly, do not hold your breath.
The bottom line is: you should inform the Compensation Commissioner of any change within seven days to nullify any of the numerous obscure defences not to adjust the assessments that the bureaucratic office of the Compensation Commissioner might come up with.
Due to a lack of space I will be severely brief and just say, update your COID Act administration with the following Government Gazettes for 2008:

For the full details the website is: www.info.gov.za/index.html.  Do yourself a favour and download this information for future purposes.
This site will in future have other links for your convenience.
Keep on sending your questions, will attend with pleasure if I can.

Till next month.

I often wonder how many of the injuries reported by employers to their employees are fraudulent. As there are no statistics in this regard it will, I think, always be a matter for speculation. Seeing that there are so many holidays during April and May, I thought we might as well join this festive mood and be less serious.

A few weeks ago I was watching an overseas news broadcast from England and I was quite amused by a video clip accompanied by a news item regarding a man who has been in receipt of an incapacity allowance for a number of years. That fact in and of itself is obviously not newsworthy, especially coming from England; what was amusing to say the least was that the video clip showed him refereeing a soccer match. The outcome of the affair was to my knowledge never revealed but I can just imagine that it must have had serious consequences.

The UK incident reminded me of several similar incidents that I have experienced during my career as Compensation Commissioner. I can share some of these cases with you but I will confine them to those where I am almost certain the parties are no longer in a position to surf the internet, if you get my meaning.
Back injuries, not mine, and a large number of them, have really contributed to my premature ageing.
You would not believe to what lengths people go to prove that they have injured their backs at work. Despite all the medical evidence such as radiological tests and the reports, orthopaedic examinations and related tests, etc. once the party focuses on the compensation for permanent disablement benefits for a back condition, he or she seldom gives up. At one stage we were so desperate that we decided to pay personal visits to claimants at home to discuss their cases before being heard at statutory formal tribunal hearings. Although we never intended catching anyone out, it was on more than one of these surprise visits that we found the “seriously disabled” individuals engaged in intensive gardening. Mowing the lawn could perhaps be forgiven, I mean after all it just guiding the lawnmower, but the spade work that some of them were up to could have been advertisements for pain killers. No-one would have believed these people were victims of disabling accidents. When introducing oneself the reactions were so colourful that I will rather not discuss them in this contribution. Should you want to become familiar with the vocabulary, I suggest that you watch one of the American movies which deal with this problem. Believe it or not, in the USA they have private eyes (PI’s) specialising in catching the claimants of fraudulent claims for injuries on duty and other accident insurance. It is real comedy.

Before concluding the back injury scenario which caused so many problems, just a few more interesting cases, again cryptically quoted as the claimants may still be around. A person who sustained a rather minor injury and who was declared medically unfit by his employer because of it, continue to play his regular weekly round of golf after he was “on pension”. The Compensation Commissioner repudiated the claim but lost the litigation that followed. Maybe the Compensation Commissioner’s medical advisors were mistaken, it is possible; but what is really amazing is how somebody who cannot work because of constant pain can partake in such a physically demanding sport. (Not the 19th hole!)

The last thought about backs is something that is a fact but has nothing to do with fraud or the so-called “compensitis”. I know of at least two people who have played Springbok rugby after permanent disablement benefits were awarded to them. I can not go into the details but it is possible. I however repeat that this was all above board and nothing underhand happened. It can still happen today but it is very unlikely, unless, the legal situation changes to the extent where it is decided by our courts that professional sport persons are “employees” in terms of the COID Act and that they are thus entitled to the benefits provided for in the COID Act. Watch this space, I have a funny feeling that this is not far off.

To conclude in this lighter vein I want to share with you an incident that happened during a formal hearing of a man who alleged that he had very little mobility left in his shoulder as a result of an accident at work. The Compensation Commissioner accepted the accident and liability for the medical costs but repudiated the allegation that the shoulder had become immobile. (The so-called “frozen shoulder”). As a result thereof, a formal hearing to adjudicate the injured man’s objection was held in terms of the COID Act. One of the assessors was a medical practitioner. He, with all due respect to him, was inclined to catch the injured objectors out during the hearing and, to his credit, it did work on several occasions. After having listened to the employee’s evidence about his “frozen” shoulder with a demonstration as to the fact that he could no longer lift his arm, he was requested by our doctor assessor to demonstrate to the tribunal how high he could have lifted his arm before the accident. Then the doctor got the surprise of his life when the witness responded (in Afrikaans): “Have you not listened to what I have been saying the whole morning!”
That was the last time that the dear doctor tried that ploy to catch a witness lying.

Till next time.

Introduction
“Oh what a relief that will be! I can be exempted from the COID Act. No more hassles with the office of the Compensation Commissioner. Imagine what I can save in the form of telephone calls. I have to pay the medical bills anyway else doctors won’t treat my employees. I must see my broker tomorrow and find out how to go about it”.
I have never heard this sentiment being expressed in these words but the gist of it is usually the same. I have many a time come across employers who, after having read the COID Act for the first time, are under the impression that they can be exempted from registration with the Compensation Commissioner. Is this in fact possible?  Yes, to an extent, but only for a few select employers. Sorry, I know that might be bad news but that is also the fact of the matter.

What does exemption mean?
Section 84 of the COID Act provides for certain employers to be exempted from the payment of assessments.  These employers include the following:

• National and provincial governments;
• Local authorities who have been exempted in terms of the COID Act upon application of the local authority
• Employers registered with Rand Mutual or Federated Employers Assurance with the approval of the Director-General.

  It means one thing only and that is that these employers are exempted from the payment of assessments to the Compensation Commissioner’s office.  As a quid pro quo for this exemption they become liable to pay the full cost of compensation and medical costs emanating from the injuries on duty of their employees.
  For many employers overseas, being self-insured is the only way to go!

The exempted employer and the administration of the COID Act
How does the exempted status affect the administration of the Act?  Except for different procedures very little if any.  These employers must still report accidents to the Compensation Commissioner and the adjudication to determine liability, which is the decision whether the incident is an “accident” as defined, still remains with the Compensation Commissioner’s office. As soon as that has been confirmed the Compensation Commissioner informs and instructs the exempted employer to continue and pay the benefits due in respect of the injury on duty. You will, therefore, appreciate that the exempted employer has no discretion as far as the administration of the COID Act is concerned. All disputes between the injured employees and the employer are referred to the Compensation Commissioner for a decision.  So, when the COID Act is properly read it will become clear that the exemption you were wishing for is, unfortunately, either not applicable to you as an employer or over and above that, has a very limited scope.

What does this all mean for you, the employer?
In view of the above it means that unless you are the State, a provincial government or a local authority there is only one way in which you can be exempted from paying assessments to the Compensation Commissioner.  To achieve that is to apply for approval to obtain a policy from a mutual association to cover the full liability for your employees.  These mutual associations, as provided for in section 30 of the Act, are (were?) established in terms of the Insurance Act, 1943, an Act which has been repealed by the Long Term Insurance Act of 1998.  What has happened to the mutual associations is not clear.  In the past only two mutual associations were allowed to carry on business as envisaged by sections 30 read with section 84 and I far as I can gather it is still the case.
The Compensation Commissioner’s policy always was to allow employers in the mining industry (class IV of the industrial rating) to obtain policies from the one association and the building industry (class V) from the other one.  I presume that it is still the case.  But again let me remind you that the Compensation Commissioner remains in full control as far as the legal administration of the COID Act is concerned.
Is that fair competition I presume you would pose as the logic question?  I do not know whether it is or not. 
It would be interesting to know what the Competition Tribunal’s stand would be on this.  Competition is generally a prerequisite for improving service but that, I am afraid, is not possible under the present legislation as it appears on the statute-book.  After all, is competition possible when the state (read
Director-General, Labour) has the full and last say about the total administration?

Till next time.

Our Immigrant population
We all know how many legal and illegal immigrants are at present residing in South Africa.  Numerous figures relating to the number of illegal persons are being bandied about.  One hears of 2 million, 4 million and even 6 million.  I have a strong suspicion that nobody really knows what the exact figure is.
I have no intention of addressing the shortcomings of our control systems – that is, in any case. common knowledge.  The solution for this problem is so complicated that I sometimes doubt that there is one!

The aliens in the workplace
I need to share a worrying aspect about the illegal immigrant situation vis-a vis workers’ compensation with you.  Let me kick off with a practical example (it is a true story as they say in the movies) I recently had a client visiting me.  He conducts a labour intensive type of business.  When discussing matters at a later stage at his premises I asked one of the employees a simple question which he obviously did not understand.  One of his colleagues however responded in English and answered the question.  The short of the matter appeared to be that not a single employee on those premises was from the dear RSA.  Two were from Zimbabwe, one from the DRC, one from Mozambique and one from Nigeria.  The rest of the workforce that were not present, I am sure was similarly composed.  This type of employer was most likely picking up employees from the side of the road in the mornings and employing them at a daily fee as long as work is available.  I did not enquire about the daily remuneration.  One can only guess why they were preferred to South African workers.  What I do know is that all these contracts are invalid because the one party is illegally in the country.

How does this problem affect workers’ compensation legislation?
To answer this question let us analyze what will happen if one of the illegal casuals is injured on duty.  He or she will be taken to a hospital by the employer as is required by law for treatment.  The employer will complete the Report of an Accident (W Cl 2) etc and the employee will receive treatment by a private doctor and hospital.  The medical service providers will be compensated out of the Compensation Fund by the Compensation Commissioner.  Depending on the nature of the injury the employee could even receive Temporary Total Disablement benefits or Permanent Disablement benefits.  So far so good – or so it appears
What is however relevant although not everybody might agree is whether the illegal workers appeared on the wage records of the employer?  If not, and I don’t know whether this is in fact the case as I do not undertake forensic audits, their earnings will not be declared to the Compensation Commissioner for assessment purposes.  In short no premium will be paid for theses people who do not officially appear on “the books”.  You make your own deduction about who is subsidising the compensation for the “non-existant” employees.  The irony of the matter is that the COID Act has always, even since the 1941 Act been very lenient with the right to compensation – even for the invalid contracts.  For workers’ compensation, the vested right of the employee, as defined, was always almost sacred.  But the people then had no crystal ball for the years 2000+.  Section 27 of the COID Act reads as follows to illustrate:

Special circumstances in which Director-General may make award
27. If in a claim for compensation in terms of this Act it appears to the Director-General that the contract of service or apprenticeship or learnership of the employee concerned is invalid, he may deal with such claim as if the contract was valid at the time of the accident.
I will not bore you with legalistic details and the case law in this regard but workers’ compensation legislation has persistently ignored invalid contracts of service.

Financial Implications
It does not take a financial wizard to know that in the long term the fact that people for whom no contributions to the Compensation Fund have been paid but who are compensated in any case, will result in shortfalls for the Fund.  The alternative is that employers are going contribute more every year for the losses.  Whether the Department of Labour with all the new regional Commissioners is going to monitor the situation will have to be seen.  Maybe you should ask them since it may be your Assessment that’s being applied to subsidise employers of illegal aliens.

Till next time.

Introduction
I could not believe my eyes when I read the February 2008 magazine articles, press releases, letters to the authorities and believe it or not, even a SABC 3, “Special Assignment” program on 19 February 2008 about the failures of the Compensation Commissioner’s office.  To be honest, after the numerous complaints over the past few years it could have been expected but despite that, not the “aggressiveness” of the “onslaught”.

The critics
What has happened to bring about this wave of criticism? I don’t know, maybe it was the last straw.  There are so many issues at stake at the moment that I seriously doubt whether the office of the Compensation Commissioner, despite all the reassurances from the senior personnel, will be able to cope with the challenges posed.  Workers’ compensation, believe it or not, requires a vast spectrum of skills from the administrators of the COID Act.  You must have an extensive knowledge of law, medicine, human anatomy, financial skills and above all, management skills.  If not, you will struggle to cope with the adjudication of a claim.  Let me illustrate:
Someone is injured on duty and a claim with the medical reports and accounts are submitted to you as the claims officer:
• Is this an accident as defined in section 1 of the Act?
• Is there a causal connection between the accident and the medical condition? ;
•
Can the medication prescribed be associated with the nature of the injury?  If necessary consult MIMS;
• Are you satisfied that the medication and medical procedures are in line with what the office is paying for; etc.

Lets then proceed with a few of the complaints and the insinuations levelled at the Department of Labour:

• In the February 2008 edition of “Noseweek” a case study of how unsettled claims are handled by the Compensation Commissioner is published.  Without bothering you with the details, the publication after involving the Western Cape Commissioner Thozama Ngonyana, could only arrange that 5,25% of doctor’s unsettled claims were paid. (Page 26).  The “Noseweek”, on behalf of the doctors then asks the (very valid) question as to how a company that collects medical costs on behalf of the suppliers can be so successful and can deliver without delay.  Serious questions about this whole situation are at the moment being asked throughout the industry;
• The next complainant is the Democratic Alliance (DA) with a lengthy press release dated 5 February 2008.  Just to summarise will disqualify me from getting this onto the internet, so let me just have a few words about this release.  You can read it if you are serious about the service. The conclusion of the document is sufficient to reflect the content of the document.  Amongst others they make their intent clear as far as the following is concerned:
• They have written to the Minister of Labour, copy also available on the internet;
• A letter to the Public Protector
• Pose questions to Parliament;
• Request the Portfolio Committee to summons the Compensation Commissioner (why not the Director General who is according the COID Act the accounting officer?) to explain the non-delivery.

These are then just three of several articles that have recently appeared in the press and discussion programmes on TV. 

And a special message here to the SABC: when you again feature the Compensation Fund on Special Assignment (previously in March 2003) please refer back to your earlier articles and try to improve on them.  I would imagine that viewers want to know less about the technicalities and banal excuses for long delays in the payment of accounts and the repudiation of medical accounts and more about what management actually DO at the Fund to sort out its problems.
In the meantime, we have to settle for promises from a participant to make a difference wherever he is present.  (Let us hope that will happen.)
A reformer conference as I have suggested in January 2008?  I hope it is not too late.
A very concerned friend till next time.
http://www.da.org.za/da/Site/Eng/campaigns/Plan ToRescue.asp

Till next time.

Memories, but not always sweet.
You all know the feeling at the end of the year when the calm sets in and you have time to do some introspection.  You take stock of the matters encountered during the year.  When reminiscing about the past, and not only the past twelve months but as far back as the beginning of the nineties, I suddenly remembered all the articles that were published – especially those in the law and medical journals – calling for immediate reform of the then 1941 workmen’s compensation legislation.  The contingent of experts from the legal profession, trade union representatives, medical profession and academics, as usual, had a lot to say about how the Act should be amended.
This reform drive culminated in a “Conference on the Reform of Workers’ Compensation Legislation” which was held in March 1992.  To verify, if necessary, you can read some of the contributions in the “Industrial Law Journal”, Volume 13, Part 6 1992.  A lot of valid points and recommendations were made at this conference.  The gist of most of the arguments was the concern that employees are not adequately compensated, especially for occupational diseases.  Delays in some of the processes were also a worry.  Lee Bozalek, Legal Resources Centre, Cape Town, for example, was worried about the small number of objections against the decisions by the then Workmen’s Compensation Commissioner.  “It strains credulity that, for example, during the 1990 year in which 250 000 plus accidents were reported.. only 331 workmen (sic) were unhappy with decisions…” (See page 1356).  In plain language, the experts were not happy that the rights of the injured employees were not properly exercised, mostly because of the nature and attitude of the “system”.  Not a word about the status of the assistance and training by their unions.
The bill that was published on 11 December 1992 did take some of the experts’ concerns into account such as a radical improvement regarding the number of occupational diseases and the method of compensating the employees suffering from the diseases.  This bill eventually became the COID Act which came into force on 1 March 1994.

The situation 15 years later
So now we have a new Act since 1994 and a new “system” since 1995.  Did the employees’ plight improve? 
As far as the legislation is concerned, undoubtedly yes.  As far as the administration of the legislation is concerned, I have serious doubts.  The number of complaints about lengthy delays and unnecessary litigation emanating from strange decisions taken by Compensation Commissioner’ office does not look promising.  During December several senior officials of that office were suspended according to the press.  All this cannot enhance performance and service to the people for whose sake the legislation was created.
After all the stock taking of the past and the present, as summarized above, I came to the conclusion that a follow up conference by the old and new reformers should be held to debate whether the system that worried them in 1992 – and long before that – has really been improved to their satisfaction.  Is the present legislation and the associated administration really that much of an improvement?  The unions need to be involved as they are in terms of their mandates obliged to ensure that their members are fairly treated, something that I do not see happening at the moment.

To Do Month
January is the month in which you must list all the tasks to be performed for the 2008 administration.  Remember to include checking your Government Gazette Notices for:
A new Earnings Limit;
A new Schedule 4 (Calculation of Benefits);
Critical dates for specific tasks such as submission of Return of Earnings; etc, etc

Till next time.