The Reader Friendly Column

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.