Legislative proposal to amend the Compensation for Occupational Injuries and Diseases Act to expand comprehensive Compensation Fund coverage to domestic workers (Hon I Ollis, DA)

Private Members' Legislative Proposals and Special Petitions

08 November 2011
Chairperson: Mr S Thobejane (ANC)
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Meeting Summary

The Committee discussed the legislative proposal Mr I Ollis (DA) to amend the Compensation for Occupational Injuries and Diseases Act, 1993 (No 130 of 1993) to expand comprehensive Compensation Fund coverage to domestic workers. The objects of the proposed legislation were to amend the Compensation for Occupational Injuries and Diseases Act, No 130 of 1993, to include domestic workers.

Mr Ollis argued that it should not be allowed that domestic workers were left to fend for themselves once they became injured or disabled at work. The proposed legislation would give domestic workers coverage as participants in the Compensation Fund; and mandate employers of domestic workers to contribute towards the Compensation Fund.

Mr Ollis further stated that a domestic worker that was disabled due to a work related injury had no cover. There would be hospital bills and probably no cover because private medical aids were expensive and few domestic workers were on medical aid. If permanently disabled that person would lose income, would have no pension, and would be destitute. Why was it that domestic workers in South Africa were the only category of workers not covered by the Compensation Fund? The military and the police were not covered but had their own funds. On the front page of the Department of Labour website it was stated that domestic workers were not covered. It could not be allowed that domestic workers in our country could be left with absolutely nothing if they were injured.

It was discriminatory to say that domestic workers were not entitled to the same benefits, everybody else had that benefit, and the State should not keep denying domestic workers the right to be registered and the right to claim.

Members were concerned about the issue of contributions from domestic workers towards the fund; they could hardly afford to have a further burden on their low salaries. Mr Ollis responded that the Compensation Fund did not require contributions from employees; it was suggested that in this case the percentage be charged to the employer and would then have no impact on the employee.

A person should be registered for UIF if they worked 24 hours or more in a month, and in terms of the Compensation Fund that should be the minimum, and that employer should ensure registration for compensation benefits.


Meeting report

Announcements
The Chairperson announced that the scheduled briefing of Hon A Lovemore (DA) on her legislative proposal to allow South African citizens living abroad to register as voters, and to extend accessibility to voting by South African citizens living abroad, would not take place as Hon Lovemore was out of the country; and that presentation would be rescheduled.

The Davidson proposal to prohibit contracting between an organ of state in the national sphere of government and companies whose directors were party political office bearers or public representatives of political parties would also be rescheduled for early in the new year.

Next week the Committee would host representatives from the Petitions and Public Participation Committee of the Johannesburg Municipality Metro to share experiences.

Preparations were being made for the Committee to visit KwaZulu-Natal, Gauteng and Limpopo in January, in order to gain knowledge from the provinces as to what they were doing, in preparation for the study tour to Canada that was expected to take place approximately June 2012.

A new legislative proposal had been received from Dr W James (DA) that sought to amend the Labour Act to deal with trade unions and to address the issue of teachers that went on strike.

The Chairperson welcomed Mr Ollis.

Ollis proposal: amend the Compensation for Occupational Injuries and Diseases Act, 1993 to expand comprehensive Compensation Fund coverage to domestic work
The objects of the proposed legislation were to amend the Compensation for Occupational Injuries and Diseases Act, No 130 of 1993, to include domestic workers. It should not be allowed that domestic workers were left to fend for themselves once they became injured or disabled at work. The proposed legislation would give domestic workers coverage as participants in the Compensation Fund; and mandate employers of domestic workers to contribute towards the Compensation Fund.

Mr Ollis presented his legislative proposal.
He explained that the Compensation Fund used to be called the Workmen’s’ Compensation Fund; that fund, together with two other funds provided insurance to workers against injury at work. Accidents happened, and where there were specific occupational hazards one had to wear protective clothing and there were rules about occupational health and safety. Even with those rules and that protective clothing a person could be injured. The Compensation Fund provided cover for those injuries that happened in the workplace. In that event the Compensation Fund would pay medical expenses and also compensate for loss of income for prolonged hospitalisation and, if necessary, for rehabilitation. In the case of permanent disability resulting in inability to continue working, the Compensation Fund would pay a pension.

A domestic worker that was disabled due to a work related injury had no cover. There would be hospital bills and probably no cover because private medical aids were expensive and few domestic workers were on medical aid. If permanently disabled that person would lose income, would have no pension, and would be destitute. Why was it that domestic workers in South Africa were the only category of workers not covered by the Compensation Fund? The military and the police were not covered but had their own funds. The Department of Labour’s website stated that domestic workers were not covered. It could not be allowed that domestic workers in our country could be left with absolutely nothing if they were injured.

Mr Ollis’s proposal sought to amend the Act that governed the Compensation Fund to provide for domestic workers. The way the Fund operated currently was that employers contributed a percentage of the salary of the employee to the Compensation Fund and the Commissioner did the calculation of how much had to be paid, and the percentage was at the discretion of the Commissioner. Experts in the field calculated the risk in the same way that insurance payments were calculated. There would be a slight increase for employers, who would have to pay a little more; a rough calculation estimated about R3.50 per month per average salary that domestic workers were paid. The risk for a domestic worker was not great; the danger in a home environment was low risk and therefore it would be a low risk calculation, and the monthly percentage that employers would have to pay would be quite low. The payments from all the domestic workers across the country would be put into the Compensation Fund, the Fund would invest that money and if someone was injured that person would be able to draw the medical expenses and in the case of permanent injury the Fund would pay a pension to that person. By changing the Act domestic workers could be put in a position where, if an accident happened and they were disabled and unable to work, they could be paid a pension and not left destitute on the side of the road.

There could be costs involved in terms of extra paperwork in terms of the Compensation Fund to register an extra number of people. The Compensation Fund was the largest fund of its kind in the country so it had significant resources to be able to absorb the extra weight. The actual funding would come from employers who paid that small amount that was determined.

It was discriminatory to say that domestic workers were not entitled to the same benefits, everybody else had that benefit, and the State should not keep denying domestic workers the right to be registered and the right to claim.

Discussion
Mr P Pretorius (DA) asked, if the domestic workers’ money was paid into a pool, would the domestic workers only be entitled to what they cumulatively put in together, or would there be cross
subsidisation between the various categories.

Mr Ollis clarified that all the contributions to the Compensation Fund went into a common pool; so there was a high level of cross
subsidisation. That money was invested at a high rate of interest; according to the Auditor General’s reports. Both the Compensation Fund and the Unemployment Insurance Fund (UIF) over recovered in the last financial year. The money was put into a general fund and worked similar to insurance where everybody paid a little so that the one whose loss was huge could be paid for.

Mr Pretorius was interested in the definition of a domestic worker as he had noted that gardeners were included – would that then include the painter, general handyman or any person that worked at a private residence.

Mr Ollis responded he could not do that because he was not asking for an amendment to the working conditions of domestic workers. The current definition of domestic work was the one accepted by the Department of Labour, which included a gardener of a house cleaner but did not include people who did things that were not part of the household. Those other workers were already entitled cover.

The Chairperson noted that Members just needed clarity as to whom the proposal referred to.

Mr Ollis clarified that it referred to people who worked in the garden and in the home; not people like security guards or painters that were employed by other companies, but people who worked in the home specifically.

Mr Pretorius asked how Mr Ollis foresaw the payments being made on a monthly basis; what about the person who only had a domestic worker once a week?

Mr Ollis said the proposal suggested that the registration would be linked to the same form as was used for the UIF. The law required that every employer registered every domestic worker for UIF, the same as for any other worker in South Africa. Domestic workers already had to be registered with the UIF, and a payment had to be made therefor. The payment for the UIF was different to the Compensation Fund. UIF required 1% payment of the employee’s salary and 1% of that salary from the employer. That 2% had to be paid over monthly or annually in advance to the UIF. The proposal suggested simply adding to that form to register for the Compensation Fund benefit, thereby creating a simplified process of one form to register for both UIF and compensation Fund that could be developed by the Department of Labour. It was also suggested that payments be made annually and that electronic payments via EFT or electronic banking were facilitated. Everything could be done once a year in one payment.

Ms M Molebatsi (ANC) asked for a summary of a job description for a domestic worker.

Ms M Kubayi (ANC) was concerned about the issue of contributions from domestic workers towards the fund; they could hardly afford to have a further burden on their low salaries.

Mr Ollis responded that the Compensation Fund did not require contributions from employees; that was UIF and was already in place. It was suggested that in this case the percentage be charged to the employer and would then have no impact on the employee.

Ms Kubayi asked whether Mr Ollis had explored why the Labour Department did not want domestic workers to be covered. The fact that that was stated on the front page of the website showed that there had been queries.

Mr Ollis informed Members that the Portfolio Committee on Labour had been asking the Department of Labour for the last three years whether covering domestic workers was important and should be done. The previous Director General of Labour and the current Director General of Labour both said that it must be done and were in the process of doing this. Portfolio Committee on Labour then had a hearing on the new International Labour Organisation’s resolution on domestic work, which it was a party to in Geneva. Organisations like COSATU, FEDUSA and trade unions that were responsible for domestic workers participated in the meeting. Those unions said they had been asking that domestic workers be covered for compensation for ten years and were still being told that it was in the pipeline. The previous Minister of Labour and the current Minister of Labour both said that they believed this should be done. There was general agreement that it should be done; and that it could be done; but something was stalling because it was not happening. Mr Ollis suggested if the proposal went forward that the Department of Labour be asked what was holding up the process. The Department was busy with other legislation; and it was not a priority.

Ms F Khumalo (ANC) was also interested in the challenges faced by the Department regarding domestic workers. She wished to know whether the domestic workers were registered with their employers as per the requirement; whether they were paid according to the requirements of the Department of Labour; and the small amount of approximately R3.50 mentioned by Mr Ollis would mean a lot to the domestic worker if they had to pay.

Mr Ollis said the monthly fee would be low because it was a low risk, but what about that person that was left with nothing, who would care for them for the rest of their life if they were unable to work? There was nobody. There were instances where domestic workers were injured on duty and should be protected by the Compensation Fund.

In terms of whether domestic workers were registered and were paid correctly, Mr Ollis said the Department of Labour passed laws that required domestic workers to be registered for UIF and had inspectors that went out to inspect whether the workers had in fact been registered. Some were registered and others not and the Department should be asked why more inspections were not done to ensure enforcement. Whether they were paid correctly was not part of the proposal, but Mr Ollis felt some domestic workers were paid too little and others adequately.

Ms Pilusa-Mosoane (ANC) also asked for a job description for domestic workers.

Mr Ollis said he wished to see domestic workers covered just like everybody else. A proper proposal should be done. Parliament should take action on this issue. Something should be done urgently.

Ms Khumalo assumed that the person to be put on the Compensation Fund was the person that was registered; they could not expect to be compensated if they were not first registered with the Fund.

Ms A van Wyk (ANC) said that Members were well aware of the UIF requirements. The success of the registration of domestic workers for UIF was also a measurement of the capacity of the Department to implement whatever new suggestions there might be, and she thought it would be valuable information for the Committee to know how successful the department was in registering domestic workers and with the implementation of that, otherwise would be putting something else there that the Department might not be able to implement.

Mr Ollis understood that it had bearing on this case but he could not answer on behalf of the Department of Labour. He understood that currently less than 50% of domestic workers were registered for UIF.

Ms van Wyk also believed there were a lot of domestic workers who were not required to register because they worked as casuals for certain hours a month with different people; how could the net be broadened to include them as well?

Mr Ollis responded that in terms of who was registered for the Compensation Fund, it was suggested that the same definition be used as was used for UIF. A person should be registered for UIF if they worked 24 hours or more in a month, and in terms of compensation that should be the minimum, and that employer should ensure registration for compensation benefits.

Ms Pilusa-Mosoane supported Ms van Wyk, which was why she needed a definition of a domestic worker. When she tried to register her part time domestic worker she was told that she could not.

Ms P Kopane (DA) supported the proposal in principle but there was reluctance on the part of the South African employer to register employees for UIF, and domestic workers were not paid what they should. Although it was not part of the proposal there needed to be synergy between the two.

One of the reasons that employers did not register their employees was because they did not like paperwork; it was too much trouble. If that reason could be reduced to one form to register for UIF and the Compensation Fund, then the same people who registered their domestic workers for UIF would register for the Compensation Fund.

It was felt that the Department should embark on an intensive awareness campaign to inform employers and employees of their responsibilities and their rights so that more people would be registered and to teach the South African public what was required. Thereafter the labour inspectors should check whether the people had complied.

Ms Kopane believed that before the Committee could agree to the proposal it would need a guideline as to what the Commissioner would determine had to be paid.

Mr Ollis said that calculations had been done and if a domestic worker earned R150 per day, as a sample figure, the monthly payment to the Compensation Fund would be R3.28, based on a low risk industry calculation of what people in low risk industries were currently required to pay.

The Chairperson said a domestic worker was not considered to be a profession and was not
categorised.

Mr Ollis appealed to the Committee to allow the proposal to go forward to the next stage because it was urgent. Every day in South Africa
people were injured at work and were sent home, and in some cases were sent home with nothing unless the employer chose to assist, but even then there was no pension. The situation was unacceptable.

The Chairperson thanked Mr Ollis. The Committee would deliberate and do its research and in the process invite stakeholders, in this case the Ministry and the portfolio Committee to give their understanding.

The meeting was adjourned.



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