Compensation for Occupational Injuries and Diseases Amendment (COIDA) Bill: public hearings
Employment and Labour
20 April 2021
Chairperson: Ms M Dunjwa (ANC)
Video: Portfolio Committee on Employment and Labour
Read more about the Mahlangu matter here. (source: SERI)
Read the full Constitutional Court Order here.
Download the COIDA factsheet here.
The Committee met virtually for oral presentations from the National Employers Association of South Africa, COIDLink, the Minerals Council of South Africa and the Women's Legal Centre, on their views, concerns and recommendations regarding the proposed amendments to the Compensation for Occupational Injuries and Diseases Act (COIDA).
In is submissions, the National Employers Association of South Africa (NEASA) contended that intermediaries existed because of the inefficiency and dysfunctionality of the Compensation Fund in fulfilling its mandate. Third party administrators allowed medical service providers (MSPs) to be paid expeditiously and ensure that injured on duty (IOD) patients received quality healthcare. Injured workers could not wait for a claim to be approved before receiving medical treatment, nor could the MSPs wait for years before their invoices were paid, as this would cripple their practices financially. The government had to realise that its attempts to rectify corruption within the Fund had been futile. This amendment would make no difference. The fact that MSPs could not cede their medical invoices to intermediaries would only hamper patient treatment. The transfer of the administrative and financial risk back to MSPs would discourage them from treating IOD patients due to the known issues of backlogs and late payment, or non-payment, by the Fund. Opportunists existed who saw an opportunity in the Fund's dysfunctionality, and its lack of accountability would only get worse without the crucial role of intermediaries.
COIDLink, an IOD claims administrator, focused its submission on section 73.4 of the amendment. They argued that the Committee must expunge this section from the Bill to save administrators' livelihoods and save their dependents from hunger and destitution, considering that creating new jobs was a challenge, but existing jobs could be preserved. Every effort had to be made to stem the tide of unemployment, as people who lost their jobs became a burden to the state.
The Minerals Council South Africa submitted that the proposed provision for penalties was extremely onerous. The clear message to new investors would be that employment was accompanied with very harsh penalties for the employer. The same message would be sent to existing investors. This would undoubtedly lead to disinvestment and discouragement of future investment which South Africa could ill afford, bearing in mind the existing low economic growth and the excessive levels of unemployment.
The Women’s Legal Centre said the stated purpose and objective of the Bill was to extend the coverage for occupational injuries and diseases to previously excluded vulnerable workers, as well as the improvement of compensation benefits for employees. It therefore welcomed clause 1 of the Bill, which sought to amend section 1 of the Act by specifically extending social protection and occupational compensation to domestic workers. Domestic workers were a class of workers who had been excluded from social security and protection because section 1 (xix)(d)(v) of the COIDA had specifically excluded domestic workers who worked in private homes from the definition of employee.
Members of the Committee questioned why sections of the Bill had been referred to as "nonsensical," because they had done their best to include stakeholders. They also raised their concern that some presenters were not familiar with the Bill's procedures. Questions were raised as to why certain groups had not been consulted, and the presenters were also asked to provide the Committee with hard numbers and not generalise their percentages and the effects of the Bill.
The Chairperson welcomed Members to the virtual meeting and reminded them that presenters were making their submissions, and that they would have an opportunity to ask questions of clarity only. They should engage with what was presented.
National Employers' Association of South Africa (NEASA)
Mr Gerhard Papenfus, Chief Executive Officer, NEASA, said the Association had investigated the impact of this proposed amendment, in solidarity with other affected and concerned parties who were negatively affected by the dysfunctionality of the Compensation Fund (CF) and who advocated for its efficient and effective functioning.
NEASA was particularly and vehemently opposed to the introduction of section 43 of the Amendment Bill. The reasons for this were simple. It was trite and widespread knowledge that the CF was, and had been for some time, structurally and operationally dysfunctional. This was evidenced by repeated qualified audits by the Auditor-General (AG) and a slew of court orders against the Fund for non-payment of claims.
When an employee was injured while performing their duties at work, the employee was able to access necessary specialised private medical care, given that the employer contributed to the CF. Medical service providers (MSPs) then claim the fee from the CF. However, because of the rigorous administrative process involved, MSPs chose to cede their claims to third party administrators in return for immediate payment at a fee charged directly to the MSPs, and not the CF. Third party administrators therefore assisted employers and MSPs to navigate the complex CF claiming process in such a way that allowed cash flow and ensured that injured workers were treated timeously. This section would prohibit the cession of medical invoices by MSPs to financial institutions, including banks and other credit providers, or third-party administrators who acted as intermediaries between the employers, MSPs and the Fund.
Mr Papenfus said that what government failed to understand was that section 43 would effectively remove a key part of the Fund’s value chain that actually worked -- it would discourage health care providers from treating workers injured on duty, undermine the ability of an injured on duty (IOD) patient to access quality healthcare and treatment, and increase the burden on the legal system for MSPs, employers and the State. It would exclude domestic workers from getting quality health care as beneficiaries of the Fund, and it would also paralyse the efficient manner in which contributing employers may exercise their right to claim from the Fund. Ultimately, it would undermine the object of the Compensation for Occupational Injuries and Diseases Act (COIDA), which was to get injured workers proper health care and back to work. Furthermore, no tangible rationale had been given for this amendment.
Intermediaries existed because of the inefficiency and dysfunctionality of the Fund in fulfilling its mandate. Third party administrators allowed MSPs to be paid expeditiously and ensured that IOD patients receive quality healthcare. Injured workers could not wait for a claim to be approved before receiving medical treatment, nor could the MSPs wait for years before their invoices were paid, as this would cripple their practices financially.
Third party administrators therefore addressed this problem. What the Government seemed to fail to understand was that the CF was not operating efficiently to allow businesses and stakeholders to work cooperatively with it. If an injured worker could not get proper treatment and did not return to work, it affected the employer’s operational capabilities. This was further worsened if MSPs and businesses had to take over the administrative processes in dealing with CF claims. Due to the inefficiencies of the CF, many MSPs and employers relied on third party administrators to ensure cash flow for working capital.
Third party cession, debtor as collateral and administration outsourcing, was not unique to COID but also existed effectively and efficiently within the Road Accident Fund (RAF), the medical aid industry and commercial banks.
Section 43 collapsed the only element of the Fund’s process that currently worked efficiently, which would not only have a detrimental impact on the entire value chain, including IOD patients, MSPs, commercial banks and employers, but even the Fund itself. In the end, it would be the injured workers who would suffer, as practitioners would no longer be willing to treat them and they would be forced to pay personally or resort to public hospitals.
Curiously, the government alleged an element of fraud and corruption from intermediaries. However, there was no evidence to this effect. On the contrary, intermediaries had had to resort to legal proceedings to get payment from the Fund itself – court cases which the Fund never wins. What was evident, though, was that the Compensation Fund‚ by its own admission‚ spent billions irregularly, but the AG was not able to confirm this figure‚ “as the entity did not maintain proper records and adequate systems of internal controls.” Corruption could not be attributed to intermediaries, nor could it be a valid reason for this amendment. Intermediaries were not the authorised bodies who approved the payment of unsupported claims. It was the Fund itself which authorised the payment of unsupported claims and which could not seem to manage legitimate claims due to maladministration.
Far beyond the effects of this amendment on the medical practitioners, it also had implications for employers who had a right to claim injured workers’ salaries or wages paid while on sick leave from the Fund. The inefficiencies of the Fund had a direct impact on the operational abilities of employers. Two issues that were already problematic in the CF were businesses that lost contracts because "certificates of good standing" could not be obtained from the Fund due to maladministration, and medical practitioners, who already refused to treat IOD claims as a result of non-payment by the Fund. This amendment, as illustrated above, would only worsen these already problematic issues.
The government had to realise that its attempt to rectify corruption within the Fund had been futile. This amendment would be no different. The fact that MSPs could not cede their medical invoices to intermediaries would only hamper patient treatment. The transfer of the administrative and financial risk back to MSPs would discourage MSPs from treating IOD patients due to the known issues of backlogs and late payment, or non-payment, by the Fund. Opportunists existed who saw an opportunity in this dysfunctionality. The dysfunctionality of the Fund and its lack of accountability would only get worse without the crucial role of intermediaries. Employers who contributed to the fund would also suffer the brunt of the administrative failures, which may cost industry millions of rand and effectively weaken the economy. This amendment would disable the only mechanism that kept the Fund functional.
NEASA therefore submitted that the Parliamentary Portfolio Committee consider the irrationality of clause 43, the consequences of clause 43 in relation to workers -- including domestic workers -- not getting treated, and the burden on the medical fraternity which was already under strain due to the COVID-19 pandemic. NEASA implored the Government to remove section 43 or allow for it to be amended in such a way that was beneficial not only to MSPs and employers, but also the workers who suffer injuries on duty. It found it incomprehensible that a Fund which was known for its administrative failures would support amending legislation which would exacerbate their inability to function effectively and transparently.
Unless an intervention was implemented to stop this section from becoming operational, an entire services sector could be abolished overnight, possibly also infringing on the constitutional right for individuals to freely choose their occupation, trade or profession. Medical services providers, businesses, and not the government, must decide how they manage their affairs. The proposed amendments would not only foster a culture of unaccountability and worsen the corruption in the Fund, but would cripple MSP’s and other businesses and deny injured workers quality health care.
The Chairperson thanked Mr Papenfus for the presentation and opened the floor to Members to ask questions of clarity.
Ms C Mkhonto (EFF) asked about the shortfalls identified by NEASA, pointing out it had not mentioned what should be done to improve the situation. She asked if NEASA was not taking third party practitioners as consultants.
Ms H Denner (FF+) said that neither the Committee nor the legal Department were fully aware of the legal implications of the Bill, especially on the issue of third-party practitioners, and asked for a comment in that regard.
Dr M Cardo (DA) was of the view that the points made in rationality of section 33 were well made. He asked if the Committee could be provided with numbers.
Mr S Mdabe (ANC) attempted to ask a question, but was not audible because of connection issues.
Mr Papenfus responded that the solution was that the Compensation Fund must function effectively. Third party practitioners were assisting companies with their services, and had helped many of them. The complaints of businesses were overwhelming, and there were thousands of outstanding issues. A claim had to be submitted and the money must be paid, but this was not happening at the moment, which meant the Fund was dysfunctional.
Third party consultants did not get paid by the government, but the problem was that the officials appointed by the government were not doing the work. Third party consultants assisted the CF and were paid by the medical fraternity, not by the government, which meant they were administrators. They were focused on particular actions and they got them through legal action. The Fund wanted these practitioners out of the way because they had been working hard and getting the desired results.
Doctors cede their claims to third party administrators because of the incompetence of government officials. The reason for this was that once they lodged a claim, it was the same as throwing it away. The government did not act in time, and that was why the doctors ceded the claims to third parties. Because of time constraints, there was a need to have third party consultants and this role must be protected because of the work that they were doing. There were doctors who had not received the money for the work they had done, which meant that the only option left was litigation.
The employer had to pay 75% of the salary for the first three months, and this was a challenge because employers could not manage such a task. This was not a good idea from the Fund’s side.
Mr Papenfus said if medical practitioners were not paid for their services, it was concerning because it meant that employees would not get assistance in a time of need, and it would have an impact on the sustainability of the profession and cause a strain. It could also mean that the profession could be wiped out. Financial strains would have an impact on employment at large.
Mr Mdabe asked if Mr Papenfus had said the amendments were nonsensical. He could not finish his question because of the poor signal.
The Chairperson asked Mr Mdabe to type his question in the chat box.
She said that it was her understanding that the Committee had asked the Compensation Fund to make a presentation to the Committee, and they had had deliberations. She asked if Mr Papenfus had listened to, or read, any of the presentations by the CF. She wanted to get his understanding of the system. She was worried that Mr Papenfus was generalising the issues, as he had not provided numbers to the Committee as requested by Dr Cardo. She asked if Mr Papenfus was aware of what was happening at the Compensation Fund.
Mr Mdabe asked what Mr Papenfus had meant by saying "nonsensical amendments?"
Mr Papenfus said he was aware of what was being said by the Minister, but he did not know what was happening at the Fund. He knew what happened as outcomes -- he had met with people who had complained about the services provided by the Fund. He himself, as an employer, was also disappointed.
He said that an injury on duty usually involved an individual employee and did not lead to unemployment, but was a financial burden on the employer. The problem would come when medical practitioners refused to assist the injured employees and referred them to public hospitals, as this would not lead to unemployment but to financial burdens on the parties. Third party consultants would cease to exist should these amendments be applied.
Responding to Mr Mdabe’s question he said it did not make sense if the patient, businesses and medical practitioners did not benefit from the amendments. What was the point of having the amendments, because there was no understanding as to why there was a need for them?
The Chairperson asked if Mr Papenfus was aware that the Compensation Fund was engaged in looking at the challenges and upgrading their system. She was concerned about the allegations being made by Mr Papenfus.
Mr Papenfus said that he was aware of a system change from two years ago, when the Fund became insufficient, which was a total failure, but he was not aware of a system investigation. He said that if the system had been working well, why was there a need to change it? It was not good to get rid of those who were helping businesses. The Fund was supposed to be efficient, but because of the lack of good service people had to rely on third party consultants.
The Chairperson thanked Mr Papenfus for the presentation, and for responding to the questions of members.
Mr Gideon Nkadimeng, Chairperson, COIDLink, a black-owned injury-on-duty claims administration business, said that according to Stats SA, the country’s official unemployment rate had reached an alarming 30.8% in the third quarter of 2020, and an even more alarming 43.1% if one used the expanded definition of unemployment. Black African women were the most vulnerable, with an unemployment rate of 36.0%. The Centre for Development and Enterprise had indicated that South Africa now had an unemployment crisis that was among the most severe in the world. This placed a heavy financial and social burden on the communities where most of the unemployed live. People must have employment if they were to gain skills, dignity and independence.
At the recent South African Investment conference held in November 2020, President Ramaphosa spoke about his government’s commitment to growing the SA economy. It would be a great contradiction if the President were to tell the nation on the one hand that his government was committed to creating jobs, while on the other hand it was proposing laws that would cause immediate job losses. In this country even one job loss was one too many.
Creating new jobs was a challenge, but existing jobs could be preserved. Every effort must be made to stem the tide of unemployment. People who lost their jobs became a burden to the state. Taxpayers’ money should not be used to support them when they could support themselves by remaining employed by claims administrators.
COIDLink submitted that the Committee must expunge the section 73.4 amendment from the Bill to save their livelihoods and save their dependents from hunger and destitution.
The Chairperson thanked COIDLink for their presentation, and asked Members to engage with them on matters of clarity.
Ms Denner asked about the effect at ground level should section 43 be accepted as is, and for a comment on third party consultants, because they were being accused by the Minister as being a problem. She was worried that the previous presenters had not found a motivation for section 43, and the Committee should inquire about this.
The Chairperson reminded Ms Denner that the Committee was only asking questions of clarity, and there would be a time for deliberations. Members should write down their questions for that process.
Dr Cardo thanked Mr Nkadimeng for highlighting the flaws in the amendment Bill. He asked for clarity on the second recommendation, because the fund had been in a shambolic state. How would a system of accreditation work? Why would it be a good idea to have a licensing system in dealing with claims?
Ms Mkhonto said the presentation dealt with proposals, regulations and accreditations of claims, and wanted to know if claim administrators had the capacity to comply should the Department decide to take up their proposal. Would there be transparency with the compensation and medical service providers? She asked if the approach would not marginalise small administrators, and how the system was going to work in this case, saying it was easy for people to focus on the big players.
Mr Mdabe asked whether the 50 000 claims annually were from COIDLink only, or if they included claims by administrators.
Mr Nkadimeng said that the 50 000 claims mentioned were only those of COIDLink, and not the other service providers.
It was likely that medical service providers would reject or turn away employers if they were of the view that pre-funding would not be provided, and they would focus on cash-paying clients as compared to those covered by the fund. There was no specific study to substantiate this, but it was from conversations with industry people.
He said that the system was there, and fraud took place because of collusion. However, in response to Ms Denner, service providers did not have the ability to manipulate the system. The perception was broad, and COIDLink could not talk on behalf of the entire industry, but they had not yet witnessed it.
Their proposal was to be constructive and took into consideration that the way they worked was a good model because of the good relations they had with the Fund, and that they could navigate challenges. COIDLink came up with options that could assist the Fund, and would identify claims administrators on their roles and their involvement in claims, including medical service providers. They did not seek to further increase costs or barriers to the system.
Ms Leah Nzau, CEO, COIDLink, said that COIDLink was compliant with the Compensation Fund, and they provided all the supporting documents and had always responded within 24 hours for the last 20 years. There was no area that did not allow administrators to switch to the other options. All supporting information was provided, and COIDLink was transparent. Doctors were paid in advance, and for COIDLink to get their money back from the Fund they needed to make sure that they followed all the rules and were transparent. COIDLink believed that the CF worked with other stakeholders, and for the last 20 years there had been no legal issues between COIDLink and the Fund, which meant that there was a good working relationship.
Mr Nontsele asked about the potential of job losses if the amendments were taken into consideration -- could they provide potential numbers in the sector that could be affected. He said COIDLink should not be ignorant of the challenges of the Fund and would be familiar with them. What did they say about these challenges?
Ms Denner asked Mr Nkadimeng if COIDLink had been consulted as part of the socio-economic impact assessment, and if the report could be supplied to the Members.
The Chairperson asked which reports were being referred to by Ms Denner. She said it was alarming that healthcare providers may turn away employees who were injured while on duty, and this did not mean that they were acting against their code of ethics. She asked if COIDLink had never made payments that were overpaid because of their pre-payment calculations.
Mr Nkadimeng said that from COIDLinks point of view, they could quantify the number of job losses, and if section 43 was taken as it was, service providers would be forced to close shop. There were companies that provided services to COIDLink, and they would also be affected by COIDLink not being in business.
COIDLink could catalogue the challenges of the Compensation Fund because they were familiar with them, and the amendments did not deal with these challenges. COIDLink’s role was to navigate between the challenges and provide services. The proposed amendments did not deal with payment issues.
Mr Nkadimeng said that there had been no consultations with them, and COIDLink had sought consultation with the Department but no response had been received. The approach taken by COIDLink was to be a partner and to see things as challenges, not as dysfunctional, which meant they worked on looking for answers on how to deal with the challenges. COIDLink was a channel for the CF to reach other stakeholders that were part of the Fund.
Answering the question raised by the Chairperson, he said medical service providers had an oath to protect people, and it could happen that they had an option to choose how and who they could help. In practice, there had been claims where doctors had issues with certain medical aid plans and insisted on receiving cash payments, and this was the impact. The process of pre-funding only came through when a claim had been assessed and COIDLink was certain that it complied with the Fund, which meant the risk of over payment did not arise in such instances.
The Chairperson thanked COIDLink for its presentation.
Minerals Council South Africa
Dr Thuthula Balfour, Head of Health, Minerals Council SA (MCSA), said that in terms of the new proposed definition, the word "accident" was now defined as meaning "an incident or occurrence arising out of or in the course of an employee's employment and resulting in a personal injury, illness, disease or the death of the employee". This new definition confirmed the equalisation of certain consequences flowing from a work-related accident in which a person was injured and an occupational disease.
As far as the word "disease" was concerned, such a word was not defined. It would therefore include any disease arising out of, or in the course of, an employee's employment. For that reason, diseases which were not referred to in section 65 of COIDA, such as a flu or a cold, for example, were included under the word "disease" as defined. He pointed out that section 1 referred to the definition of "occupational disease," which was currently defined in COIDA by referring to section 65. It was now proposed that it included "post-traumatic stress disorder," which was acceptable. In order to remove the unacceptable consequences of the confusion caused by the word "disease," MCSA suggested that the word "disease" in the definition of "accident" be replaced with the words, "occupational disease."
The proposed amendment to section 4 of COIDA added the provisions of section 6A of COIDA. In view of this, the current section 6A of COIDA must be deleted, which had not been done in the Amendment Bill. Section 4 of COIDA must be read with section 62 of the COIDA Amendment Bill in terms of which the expression "Director-General" was substituted with the expression "Commissioner," except where it occurred in the definition of "Director General" and certain other sections.
Dr Balfour said that the current section 20(3) provided that the Director-General shall submit a copy of the balance sheet of the Compensation Fund to the Minister, who must table the same in Parliament within 30 days after receipt thereof. It was now proposed to merely submit to the Minister the annual financial statement, together with the annual report and any other relevant documentation, as provided for in section 55 of the Public Finance Management Act 1 of 1999. The requirement of tabling of such a statement and annual report in Parliament was no longer required, in terms of the proposed amendment. SAMC submitted that it was of extreme importance that there had to be proper governance of the Fund, with proper transparency, and that the audited accounts must be tabled in Parliament. It proposed that the requirement that the annual financial statement and report be tabled in Parliament be retained, especially in view of the enormous problem with corruption in the country.
The Amendment Bill did not provide for the continuation of the validity of a licence issued to a mutual association in terms of the Workmen's Compensation Act, 1941 (as amended). Read with the new section 30, the Minister may determine whether a licence may be issued to such an entity. Provision must be made for the continuation of the rights and obligations of a mutual association that had an existing licence.
The Committee was told that MCSA proposed the penalty of 10% be limited to the earnings of the employee(s) involved in the accident, and that the penalty be the maximum which may be imposed and that the new provision should read: "An employee, excluding an employer referred to in section 84(1)(a)(i), (ii) and (iii) who fails to comply with subsection (1), shall be liable to a penalty of a maximum of 10% of the actual or estimated earnings of the particular year of the employee or employees involved in the accident."
The proposed provision was extremely onerous, and would lead to the creation of a negative investment climate in the country. The clear message to new investors would be that employment was accompanied with very harsh penalties for the employer. The same message would be sent to existing investors. This would undoubtedly lead to disinvestment and discouragement of future investments which the country could ill afford, bearing in mind the existing low economic growth and the excessive levels of unemployment.
In terms of the proposed amendment to section 40(4), an employer who failed to comply with its provisions shall be liable to a penalty of 10 per cent plus interest on actual earnings declared to the Compensation Fund. This proposed provision was unreasonable and unfair. A discretion should be given to the Commissioner to determine the penalty. As worded, it was not clear whether the calculation of the penalty referred to the actual earnings of all the employees of the employer, or only the earnings of the particular employee(s) involved in the accident inquiry. The proposed provision therefore lacked the clarity which was required in terms of the rule of law.
On the matter of increased compensation due to negligence of the employer, Dr Balfour said that at present, section 56(1) provided that if an employee met with an accident or contracted an occupational disease which was due to the negligence of the employer and certain other managerial employees, referred to in paragraphs (b) to (e), such employee may apply to the Commissioner for increased compensation. It was now proposed that paragraph (d) be amended to read as, "of an engineer appointed to be in general charge of the machinery, or of a person appointed to assist such engineer in terms of any regulation made under the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002);". At present, section 56(1)(d) referred to a person appointed, or such person's assistant, in terms of a regulation made under the Minerals Act, 1991 (Act No. 50 of 1991). He pointed out that the Minerals Act regulations promulgated in terms of Government Notice 992 of 26 June 1970 (as amended), remained in force by virtue of the provisions contained in Schedule 4 to the Mine Health and Safety Act 29 of 1996. No similar regulations were made under the Mineral and Petroleum Resources Development Act, 2002. In other words, the existing provision must remain unamended, as no engineer had been or would be appointed under regulations made under the Mineral and Petroleum Resources Development Act, 2002, as no such regulations existed.
Although the definition of “employee” was not referred to in the proposed amendment to section 65, it was not necessary to insert a provision in COIDA stating that an "employee" referred to in our paragraph 4.4 shall be entitled to compensation only in terms of COIDA, and shall have no claim for benefits in respect of a compensable disease in terms of the Occupational Diseases in Mines and Works Act (ODIMWA).
At the end of 2014, a "Compensation for Occupational Injuries and Diseases Amendment Bill," which was not published in the Government Gazette, was circulated for comment. At that stage, the Amendment Bill proposed various elaborate provisions relating to rehabilitation, reintegration and early return to work of employees who suffered from injuries or occupational diseases. Those provisions placed very onerous obligations on employers, and were unrealistic. The provisions had now been materially changed, as appeared from the present Amendment Bill. In MCSA’s view, the new provisions were realistic and should be supported.
Depending on the circumstances, it may be difficult for service providers to recover payment for services rendered from the Compensation Fund timeously. There may therefore be a need for such service providers to rather cede their claims to another entity to collect such payment. In MCSA's view, there was no basis for introducing the proposed amendment. Furthermore, the prohibition against the "relinquishment" of such a claim was nonsensical, and was probably not constitutional.
In practice, difficulties may occur where medical services were provided via a medical aid fund. MCSA recommended that in such a case, reimbursement should, at the election of the employer, be made by the Commissioner directly to such fund.
At present, section 81(3) provided that an employer who failed to keep a register or other record of earnings and other prescribed particulars of employees should be guilty of an offence. It was now proposed that the fine which may be imposed in the event of such an omission should be "a fine not exceeding 10% of the actual or estimated annual assessments for the period for which the employer failed to keep the record as required by this section." MCSA was of the view that this proposed amendment was not unreasonable.
In the proposed amendment to section 83(6)(b), it was provided that the Commissioner may impose upon and recover from the employer "a penalty of 10% of the amount … assessed." MCSA proposed that the penalty be one "amounting to not more than 10% of the amount… assessed". This would make it clear that the amount of the penalty was discretionary and based on the relevant facts.
Dr Balfour said one of the functions of an inspector would be to issue compliance orders. In terms of the new proposed section 93F, "an inspector who had reasonable grounds to believe that an employer had not complied with a provision of this Act may issue a compliance order." The compliance order must also set out "the maximum fine that may be imposed upon the employer for a failure to comply with a provision of this Act." It would seem that the inspector may impose the fine. See also section 93F (4). At most, such an inspector should merely be given the power to recommend to the Commissioner to impose a fine. A fine should in any event be imposed only after the employer had been given an opportunity to present his/her case. The provisions of the Promotion of Administrative Justice Act 3 of 2000 must be complied with. The MCSA proposed that the Minister be given the powers to prescribe by regulation the requirements that an inspector must have, before he or she was appointed as such.
Mr N Hinana (DA) asked for clarity on section 39. He wanted to know what would happen to people who were injured and the cases were not reported. How were such cases going to be dealt with? He also asked who was going to incur the medical bills, considering the different circumstances.
Ms Mkhonto commented that there had been a total disregard of domestic workers in the presentation. She wanted to know the thoughts of the MCSA on the issue of licences, and if this did not lead to monopolisation of the sector, and what could be done to make sure that there were no negative impacts.
Dr Cardo asked about the proposed changes to section 44 of the Bill. He wanted to know if it was not a concern to give the Minister discretionary measures, and if there was a less draconian way to deal with the issue.
Dr Balfour said that MCSA was raising the penalty issues on section 39, and Mr Hinana had been talking about real life situations where employers did not register with COIDA. She had said that she was of the view that there were penalties when an employer had not submitted the required documentation. Inspections were carried out to make sure that all employees were registered, but it did happen that some employees would not be registered. It was a good question, but she could not provide much information since she was not well versed in that area.
Responding to Ms Mkhonto, she said that the legislation was progressive if it was compared to other developed countries. She had focused only on the area of her department, but the recognition of domestic employees was important.
Dr Balfour said that the Minister periodically renewed the licences, and most people who were licensed did their best to provide a good service so that their licences were not revoked. Most mine workers did not have issues when it came to claims, and they were paid within 30 days. She said that maybe the Department wanted to bring other players on board as a way to produce better results through competition, which meant that there would be no monopolisation.
The key point that had been raised by businesses was the blanket penalties, because contraventions were different -- some were serious and others less serious, 10% used to be levied on employees. A proposal was made that an employer who failed to comply with the requirements would get a penalty of 10% on earnings declared to the Fund. The general approach was that there must be grading, and a 10% penalty should be applied.
Women’s Legal Centre
Ms Chriscy Blouws, Attorney, Women's Legal Centre (WLC) said the WLC was an African feminist strategic litigation law centre based in Cape Town, but which had a national footprint. Its key focus and objectives were to work towards substantive equality for women in South Africa. The Centre conducted its work through the use of different methodologies, including education and training, a legal advice unit where women could obtain legal advice, as well as litigation of strategic cases that had the potential to achieve substantive equality.
The Centre had five strategic focus areas, which included addressing violence against women, women’s rights to land, housing and tenure security, equality in relationships, access to sexual, reproductive health and rights, as well as women’s rights to work in just and favourable conditions. The work of the Centre was done in an intersectional manner, as it recognised that women were not a homogenous group and thus experienced intersecting forms of discrimination differently.
Ms Blouws said the WLC welcomed the introduction of the Bill into Parliament by the Department of Employment and Labour (DEL), as it was critically important legislation that sought to address the discriminatory practices present in the existing labour framework. The Centre had previously engaged the DEL on the content of the Bill when it was at the stage of internal Departmental development. The WLC was also an amici curia in the Constitutional Court litigation in the case of Sylvia Mahlangu and Others v the Minister of Labour and Another. The analysis that the Centre provided to the Court of the facts in the case contributed to the Court utilising a feminist intersectional lens to reach its judgment and make the appropriate order. It was with this lens that the WLC was making these submissions.
The Bill sought to amend the COIDA so as to amend, substitute, insert, delete and repeal certain definitions and sections; to provide for matters pertaining to the Board and its members; to provide for the Commissioner to perform certain functions that were previously performed by the Director-General; to further provide for matters pertaining to the rehabilitation, re-integration and return to work of occupationally injured and diseased employees; to regulate the use of health care services; to provide for the Commissioner to review pension claims or awards; to provide for administrative penalties; to regulate compliance and enforcement and to provide for matters connected therewith.
The amendments further sought to extend the coverage for occupational injuries and diseases to previously excluded vulnerable workers, as well as the improvement of compensation benefits to employees; link to key target Chapters 10 and 11 of the National Development Plan 2030; align the Act with the requirements of other legislation and to remove ambiguities in some of the provisions of the Act. They also sought to empower the National Economic Development and Labour Council (NEDLAC) to nominate persons from whom members of the board may be appointed by the Minister to represent the interests of organised business, organised labour and the State; to provide for the term of office of a board member to be limited to two terms; to provide for the disqualification from membership of board bembers, resignation and removal from office; and introduce rehabilitation, reintegration and return to work in order to address the tendency of some employers to dismiss employees on the basis of occupational injuries or diseases.
Ms Blouws explained the historical discrimination against women in the workplace. For the Department to adequately implement legislation for the protection of workers in the workplace, there needed to be an appreciation that not all workers were the same. Many professions still carried the weight and stigma of the country's discriminatory past and were very present in the lived reality of women, especially women in the workplace. In addition, many professions remain gendered, and those which were considered to be “women’s work” forms of labour often involved work that was undervalued, underappreciated and underpaid. It was therefore important to understand the historical context in terms of which the Bill would find practical application.
An example of a sector that was largely gendered in nature was domestic labour, whether conducted as domestic work outside of the individual's home or unpaid care work conducted inside the home. Domestic work remained a highly feminised sector, where 80% of all domestic workers were women who lacked access to any kind of social security coverage. Domestic work could be described as the backbone of South Africa's society and economy. It was a type of employment deeply rooted within an apartheid and patriarchal context. Domestic work, and the way in which it was treated and viewed in society, had compounded the poverty of women of colour, who remained vulnerable in an informal workspace.
The stated purpose and objective of the COIDA Bill was to extend the coverage for occupational injuries and diseases to previously excluded vulnerable workers, as well as the improvement of compensation benefits to employees. The WLC welcomed clause 1 of the Bill, which seeks to amend section 1 of the Act by specifically extending social protection and occupational compensation to domestic workers. Domestic workers were a class of workers who were excluded from social security and protection because section 1 (xix)(d)(v) of COIDA specifically excluded domestic workers who work in private homes from the definition of employee. Domestic workers were unfairly discriminated against since the enactment of COIDA because of who they are, the position they hold in society, the stigma attached to the work that they do and the overall patriarchal nature in which the world of work operates. The enactment of the amendment gave the Department and society an opportunity to rectify the historical damage that had been done to this category of women.
The Constitutional Court in the case of Mahlangu had further ordered that the inclusion of domestic workers would have retrospective effect, dated back to 27 April 1994. The current amendment in the Bill and its inclusion of domestic workers was silent on the issue of retrospectivity. This highlighted a big gap in the consideration of the , and was misleading on the part of meaningful participation, as women who were not aware of the judgment would not know that they were able to claim compensation for injuries which had occurred before these amendments.
Ms Blouws said that the Bill also sought to amend the definition of “dependant of an employee” to include life partners of the employee, and to limit the age of children who could claim dependant benefits to 25 years of age if they were attending tertiary education.
Statistics South Africa’s Quarterly review in June 2020 showed that the unemployment rate in the country was at 30.1%. Joblessness of the youth between the ages of 15 – 34 years of age had been consistently as high as 63.3%. This category of persons was financially dependent on their adult parents or grandparents. By September 2020, Statistics South Africa had reported that the economy had shed 2.2 million jobs.
People of colour who came from poor and marginalised backgrounds often did not have the financial means or opportunity to attend tertiary education. There were a range of reasons for this, which included having to care for siblings and family members while their parents worked to provide an income for the family. The fact that they did not attend tertiary education, however, did not mean that they were not completely and financially dependent on their parents and in need of the same social protection relief.
It was the WLC’s submission that social security benefits were a right, not a privilege, and there could be no justification for the age limit set by the Department in respect of when someone was worthy to be financially dependent on a parent. In fact, this went against the state's obligation in terms of both s27 of the Constitution, which was the supreme law of South Africa, and its international obligations in terms of section 39 of the Constitution and the International Covenant on Economic, Social and Cultural Rights (ICESCR), to which South Africa was a party.
Section 27 of the Bill of Rights in the Constitution provides for the right to health care, food, water and social security. It states in section 27(1)(c) that everyone has a right to have access to social security, including, if they were unable to support themselves and their dependants, appropriate social assistance.
Section 39 further provides that any court, tribunal or forum, must consider international law when interpreting the rights in the bill of rights, and also that they should promote the spirit, purport and objects of the bill of rights when interpreting legislation. Article 9 of the ICESCR states that "the states party to the present Covenant recognise the right to social security, including social insurance.” The general comment 19, which was adopted on 23 November 2007, deals with the international obligations on states in terms of article 9, and expands on these obligations.
Surely, with dependency much like in any other relationship, the question was whether there was a duty to maintain, or whether such a duty existed, because of the nature of the relationship between the parties. Each application must be considered and weighted, based on the facts of the dependent submitting the claim. This approach would ensure that the state met its obligations to provide social security benefits to those most in need, and social security was treated as a basic human right rather than a privilege. The Centre therefore did not support attaching a qualification in terms of age or education when an individual could claim to be a dependent under the legislation. It submitted that this requirement was not in line with the Constitution or South Africa's international obligations.
The workplace could be, and often was, a volatile and hostile space for many women. They were far too often subjected to sexual harassment and other forms of violence. In 2020, Hlanganisa and Iswi released a report detailing the harrowing accounts of sexual harassment and other forms of violence experienced by domestic workers in South Africa. There was a critical need to include the harmful effects of violence against women in the workplace -- physically, mentally and emotionally -- and to provide women with the necessary benefits to heal themselves.
Ms Qiqa Nkomo, Candidate Attorney, WLC, said the International Labour Organisation (ILO) in 2019 had adopted Convention C190, which expressly addressed hostile and often violent work environments. It made specific recommendations on how workplaces could and should be made safer by employers, and set out the responsibility of the state in this regard.
The WLC welcomed the Department's efforts to eradicate patriarchal notions of male superiority in the world of work by deleting references to “him” throughout the Bill. This symbolic gesture did in fact go a long way to ensuring that the workplace became a substantially more gender equal environment. It was an important amendment, as it would ensure that the language of the Act and the protection that accompanied it was no longer hetro normative in assuming that only men deserved recognition and social protection.
The WLC operated from the Western Cape, and the surrounding rural areas in the Cape Town area had little to no public transport systems. Farm workers and their families were often wholly reliant on their employers to transport them to and from farms, towns, schools or other business hubs. Without a functioning transport system, these seasonal farm workers were left completely at the mercy of their employers for transportation. They were often required to sit on the back of open flatbed trucks. As recently as 6 January 2021, there had been a fatal accident involving 38 farm workers traveling on an open truck outside Worcester in the Western Cape. The media had reported that one farm worker had died and 12 were left injured.
This amendment went some way to addressing the vulnerability of workers who rely on their employers for transportation, although much needed to be done to address transportation access to workers in rural and peri-urban areas. The issue of transportation was especially critical, as it spoke directly to accessing the rights set out in the legislation, and brought one back to questions around the implementation of the Bill.
Regarding the recommendations, although the WLC supports the amendment and extension of the definitions in section 1, it recommends that the requirement for dependants older than 25 needing to attend tertiary education in order to claim dependent benefits be removed, as this would discriminate against and exclude a particular class and group of persons based on their gender, race and socio-economic background and circumstances. It recommends that the Department be asked to explain to the Committee the rationale behind restricting the right to social security protection.
The WLC wished to highlight and recommend the importance of social dialogue and public participation, which included the voices of marginalised women who work in vulnerable and precarious positions. COVID 19 had frustrated many attempts at public participation around a range of issues, but the Centre encouraged the Department and the Portfolio Committee to ensure that the voices of those most impacted by the legislation was heard and included in this process.
To ensure meaningful social dialogue and participation, it recommended that the Portfolio Committee consider the capacity of the DEL in bringing these amendments to life. It strongly suggested that the Department ensure that they had sufficient capacity to effectively address claims from domestic workers that would be brought to them, as there may be an influx of claims from domestic workers who were previously excluded. The Department had been under severe pressure with the rollout of the Temporary Employer Relief Scheme (TERS) provisions, and the WLC was concerned that with the passing of this legislation and without a clear implementation plan, workers would struggle to access their rights.
The WLC recommends that the Department adopt a proactive approach in creating awareness around these amendments and the Constitutional Court judgment, specifically in relation to retrospectivity, which these amendments did not refer to. A way to do this would be to advertise these amendments extensively in all media platforms, including social media, but more importantly to do so in different languages to ensure that women on the ground were able to read the amendments comprehensively and understand their implications.
Most of the women who seek the Centre's assistance work in domestic settings in private homes. They report the difficulty and complexity they find themselves in regarding lodging any complaints against their employer, due to the fear of further victimisation. Their work was conducted in close and intimate spaces, and intimidation at work and the fear of losing their work should they lodge a complaint was a very real fear and risk. This was an additional consideration the Portfolio Committee and the DEL should take into account in implementing these amendments, especially in relation to the powers they afford labour inspectors.
Ms Blouws concluded that the WLC looked forward to an invitation to make oral submissions to the Portfolio Committee and the opportunity to expand on the submissions above, but also to address any specific questions that the Committee may have.
Dr Cardo said that the inclusion of domestic workers was long overdue, but it should be taken into consideration that it may not be realistic and might create a lot of problems. He asked for a comment as to whether this was a realistic idea.
Ms Denner asked if WLC had access to the socio-economic impact assessment, and if they had used it to base their presentation. She wanted to know how the WLC was planning on protecting women in the workplace.
Ms Mkhonto asked, if the Bill became retrospective, whether there would be enough records that could refer back to cases from 1997 so that affected people could be catered for.
Ms Blouws said that it was not their position to say anything about including domestic workers without a proper investigation being done and looking at the funding from the state, because COIDA must cover the basic rights of everyone, and the Constitution supported this. It was important to check the funding, and the WLC had also asked the Department to check into the matter. It would be important for the Department to inform the Committee about the amount of funding available.
In response to Ms Denner’s question, Ms Blouws told the Committee that they did not have access to the socio-economic impact assessment.
She said that any occupational injuries should have the necessary documentation, and if a domestic employer got injured while working in a household, it was the employer who would take her to the hospital in most cases. This was difficult, because some domestic workers would not have witnesses and they were vulnerable to abuse. Legislation should be improved and inclusive, considering the living realities of South Africa.
The Chairperson asked Ms Blouws which age limit should be proposed, since WLC did not agree with the 25 years proposed by the Bill. She raised a concern on the issue of privacy in the household and the vulnerability of domestic workers, and wanted to know what role other stakeholders would play in empowering domestic women. The recommendations by the WLC were operational, and she asked for a comment on whether they should be included in the Act.
Ms Blouws said that the recommendations should not be included into the Bill, but their intentions were to bring out the concerns of women and how the Department could reach out to women. They wished to have an inclusive policy for everyone. She added that urban domestic workers had different issues compared to those in rural areas. The WLC was concerned about the lack of inclusivity, because most women were not consulted.
She told the Committee that there had been political progression in South Africa, but women remained vulnerable, and they faced restrictions to access of their rights. This was the angle being used by the WLC to advocate for the rights of women in a domestic setting, and warn that to start off with that, there would be an influx. The rights must be extended to everyone in the country. The Constitutional Court had highlighted the issue of retrospectivity, so consideration should be given as to how the issue could be raised within the context of the Bill.
The Chairperson said that all the adverts regarding the Bill had been circulated to all the provinces in different languages, and the Committee would have loved to speak to a number of women's organisations, but because of the pandemic and rules of Parliament, this had been difficult. Organisations like the WLC assisted Parliament in ensuring that every woman was being reached. She was glad that the WLC understood the privacy of a household and the need to empower women through the Bill.
The public hearings were important, and Members of Parliament should advocate for the Bill in their constituencies.
The Committee was adjourned.
Dunjwa, Ms ML
Bagraim, Mr M
Cardo, Dr MJ
Denner, Ms H
Hinana, Mr N
Mdabe, Mr SW
Mkhonto, Ms C N
Nontsele, Mr M
Zuma, Ms AS
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