Compensation for Occupational Injuries and Diseases Amendment (COIDA) Bill: public hearings day 2
Employment and Labour
21 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 Portfolio Committee met in a virtual sitting to hear oral submissions on the Compensation Occupational Injuries and Diseases Amendment (COIDA) Bill. Five organisations – Quad Para South Africa (QASA), South African Medical Association (SAMA), Association for Dietetics South Africa (ADSA), South African Institute of Chartered Accountants (SAICA) and Nala Business Chamber made submissions to the Committee.
QASA said it does not support the way Clause 24 amending Section 44 that deals with prescription is amended in the Bill. The proposed amendment increases the period within which the accident must be reported from 12 months to three years from date of accident. QASA recommended that the time period must be as generous as possible so workers have every opportunity to apply for benefits and not fall foul of prescription. Monthly pensions that are below the minimum wage must at least be in line with the wage for that particular sector. The allowance paid for constant attendants must be revised and brought in line with the requirements of the permanently disabled worker (who may require 24-hour attendance) and of the National Minimum Wage Act. In determining the tariff of fees, the Department must consult widely and rather include generic terms instead of brand names and a range of prices for devices as this might make the process more competitive and cost effective. The claims of permanently disabled employees must remain open and the claims of other employees must be decided within an hour of the application irrespective of the date or time.
SAMA believes that Clause 43, which seeks to ban the cession of medical invoices to financial institutions and third-party administrators would have a disastrous impact on medical practitioners and injured workers. It said the Compensation Fund is wholly dysfunctional, poorly governed and mismanaged. Removing the cession of invoices would do away with the only part of the Fund’s value chain that works. Such an amendment would be unconstitutional and irrational. If enacted it would defeat the entire purpose of COIDA and medical practitioners would have an insurmountable administrative burden.
ADSA stated that after implementation of the Umehluko and similar software systems, manual payments could no longer be made to dietitians, as the software programmes do not include tariffs for dietitians. Despite non-payment, many dietitians for ethical reasons are still rendering this essential service to members of the Compensation Fund without reimbursement. ADSA was advised by the Department of Employment and Labour to urgently negotiate tariffs and listing in the Government Gazette. Since September 2015, ADSA attempted to motivate for the listing of dietitians in the Government Gazette, but despite annual attempts, ADSA has been unsuccessful.
SAICA said the Department’s approach in Clause 43 is untenable as consultation is required in a democracy. SAICA recommends that an assessment of the socio-economic impact of policy initiatives, legislation and regulations be completed by the Department. The Compensation Fund needs to inform the Portfolio Committee how individual employers need to register to ensure that this process will be able to function efficiently and effectively. SAICA questioned the potential impact of the proposed change in legislation and the constitutionality of unreasonably prohibiting business practices with no apparent rationale.
Nala Business Chamber highlighted the negative impact of illegal contractors that do not report their workers injured at a worksite to the Department particularly on COIDA. The implementation of compensation was flawed and that many claims had still not been dealt with. The Committee heard that some people who have suffered third degree burns have not been assisted to date. Nala Business Chamber said the penalties given to employers are very low and that it must be a percentage of total revenue and not only of profit.
Members asked if public facilities cater for the specialised needs of paraplegics and asked if QUSA was a part of the socio-economic impact assessment done on the COIDA Bill. Members said many doctors were refusing to do work for Compensation Fund members because of the administrative nightmare it faces on a daily basis. Some claims had not been finalised after 21 years. Members said over a billion had been spent by the Compensation Fund on the replacement of various IT systems which have been dysfunctional. Members pointed out that travel injuries to and from work were being removed from the Bill and asked if research was done on people who used taxis and got injured on the way to work. Members said the changes would place more pressure on public hospitals and by not allowing to cede claims to third party administrators, businesses would be destroyed. Members said third party administrators were demonised without rationale by the Department. They referred to the effect of the Compensation Fund’s poor administration and asked about the importance of third-party administrators in relieving the burden on medical practices and on workers on the ground. Members asked if doctors are within their rights to refuse to see injury on duty (IOD) patients and what effect this had on workers. Members asked if claimants were paid out the full amount of their claims.
Quad Para Association of South Africa (QASA) submission
Mr Greg Daniels from Quad Para proposed that the meaning of “dependent of an employee” in the Bill be redrafted to make it clear who may be considered a dependent.
QASA does not support the amendment of section 44 that increases the period within which the accident must be reported from 12 months to three years from date of accident. It states that the right to benefits shall lapse if the accident is not reported to the Compensaion Commissioner. The lapsing of benefits if the accident is not brought to the attention of the Commissioner would be inconsistent with the broad social aims sought to be achieved by COIDA and the generous manner in which the courts stated that its provisions must be interpreted. The consequences could be severe as an uninformed employee or their dependents may find themselves barred from submitting a claim under COIDA, because they reported the accident to the employer and not to the Commissioner or simply failed to do so within the three-year period. The prescription period should not be applied in the context of an employee and employer relationship.
QASA proposes that the period of three years from the date of the accident be retained but that the accident may be reported to either the employer or the Commissioner. Further, a subsection must be added to provide the Commissioner with discretion to allow claims to be submitted after this three-year period when it is appropriate to do so and especially for accidents that caused serious or permanent impairment.
QASA proposes that the National Minimum Wage Act be interpreted favourably for COIDA beneficiaries who at the time of their accident earned less than the minimum wage. Also the constant attendant allowance in section 28 of COIDA must, as a minimum, be increased to a rate commensurate with that of the proposed minimum hourly rate set in the Wage Act for the domestic worker sector.
“Medical aid” is widely defined in COIDA to include “any device necessitated by disablement”. This means that wheelchairs and other assistive devices required as a result of disablement fall within the meaning of medical aid. However, in determining the “tariff of fees for medical aid” only the Health Professions Council of South Africa and registered Medical Associations are consulted. These associations are not well placed to provide input on the fees for “any device necessitated by disablement”.
QASA is of the view that claims for medical expenses for permanently disabled workers must remain open. Alternatively, that a mechanism is created for such claims to be opened immediately in the case of emergency medical situations.
• The time-period and persons to whom claims may be submitted must be as generous as possible so workers have every opportunity to apply for benefits and not fall foul of prescription;
• Monthly pensions below the minimum wage must at least be in line with the wage for that sector;
• The allowance paid for constant attendants must be revised and brought in line with the National Minimum Wage Act and the requirements of the permanently disabled worker who may require 24-hour attendance;
• In determining the tariff of fees, the Department must consult widely and rather include generic terms instead of brand names and a range of prices for devices as this might make the process more competitive and cost effective;
• The claims of employees that are permanently disabled must remain open and the claims of other employees must be decided within an hour of the application irrespective of the date or time.
Ms H Denner (FF+) asked if QASA was a part of the socio-economic impact assessment of the COIDA Bill or has the organisation been a part of any other assessment since then.
Mr Daniels replied that he was not aware of any participation by Quad Para in the socio-economic impact assessment of either the National Minimum Wage Act or the COIDA Bill. Quad Para’s only involvement was when it saw the call for comment on the COID Amendment Bill. This was not brought to the attention of the Department before.
The Chairperson asked if public hospitals were aware of the need to attend to paraplegics every two or three hours. Hospitals would say they are short staffed. She asked for clarity on this.
Mr Daniels said that a spinal cord injury is actually a specialised care area which means that hospitals are not fully equipped for all the care requirements necessary for such an injury. There are private facilities that provide this service. There are state facilities such as at Groote Schuur Hospital which provide this service, but the facility would be quite full. There are challenges with catheterization. The old hospital had these facilities in one space, but now it has been changed to a rehab centre. Specialist care can be done at the hospital, but the hospital staff are not always aware of the catheterization requirements such as that the urine bag needs to be emptied every three hours. Nursing staff are not always aware of what is required since it is a specialised area.
South African Medical Association (SAMA) submission
SAMA Chairperson, Dr Angelique Coetzee, said Clause 43, amending Section 73 of the Act, will have a catastrophic impact on injured workers and the doctors, surgeons, hospitals, physiotherapists, and other healthcare professionals who provide for their treatment.
SAMA is opposed to Clause 43 on the grounds that it will place excruciating administrative, financial and legal pressure on the healthcare sector and disadvantage injured workers, and their right to quality medical care.
The amendment essentially means that medical practitioners who treat employees who qualify for compensation under COIDA can no longer use their medical claims as surety for payment in any manner, and will be compelled to attend to the administration of the claims themselves, without the assistance of third-party administrators.
The Compensation Fund administration is riddled with delays and has proven ineffective, which generally leads to medical practitioners only receiving compensation for their services two years after the clam being submitted (if at all).
The proposed amendment will lead to an untold number of medical practitioners dealing with COIDA challenges such as: the redirection of resources to administration of COID matters; allowing limited time for attending to patients; not being able to approach financial and other institutions with a “promise to pay” based on their Compensation Fund claims; commercial banks will no longer be allowed to accept a medical practice’s debtors book as collateral for an overdraft facility to fund cash flow for working capital; loss of revenue; and possible closure of private practices.
Clause 43 does little to address the actual structural and governance failures of the Compensation Fund. The historical weaknesses and poor performance of the dysfunctional and poorly managed Fund will perpetuate the harm that injured workers face and will continue to be a barrier to the substantive realisation of their rights to social security.
Clause 43 is also problematic from a constitutional point of view. Should the amendment be enacted not only would it unjustifiably infringe on existing rights in the Bill of Rights, but it would also serve no rational purpose. It will be an encumbrance to the medical profession, as it places unreasonable restrictions on medical practitioners, and is arguably an infringement of section 22 of the Constitution’s right to freedom of trade.
Clause 43 will also negatively affect patients, who will be required to attend at public hospitals, as opposed to private hospitals, to receive treatment for their workplace injuries. South African public hospitals are, lamentably, overburdened, resource-constrained, often poorly managed, and under-staffed. Most of the affected employees will be relegated to these facilities, where sub-par quality of care is unfortunately not uncommon.
The inclusion of over one million domestic workers as beneficiaries of the Fund is good news, but it is unclear how the levy payment, assessment and payments processes will work. The current processes and procedures of the Fund are not suitable to manage the domestic sector and employers need the correct information and representation. (See submission for examples of comments received from SAMA members).
SAMA believes that Clause 43 of the Amendment Bill, which seeks to ban the cession of medical invoices to financial institutions and third-party administrators, if adopted, would have a disastrous impact on medical practitioners and injured workers. The Compensation Fund is wholly dysfunctional, poorly governed and mismanaged, removing the cession of invoices would do away with the only part of the Fund’s value chain that works. Such an amendment would be unconstitutional and irrational. If enacted it would defeat the entire purpose of COIDA by encumbering medical practitioners with insurmountable administrative burden, financial uncertainty and will undoubtedly further disincentivise healthcare professionals from engaging with the Fund. The amendment proposed by Clause 43 must be reconsidered and abandoned.
Dr Mvuyisi Mzukwa, SAMA Vice Chairperson, made brief comments. He said SAMA represented its members on an international level and was a part of the World Medical Association.
Mr M Bagraim (DA) said the diagnosis given by SAMA on the COIDA Bill is spot on. The legal diagnosis is fantastic. He spoke to a group of doctors from Qualicare who said that many of its doctors are refusing to do any work coming in from the Compensation Fund, because of the administrative nightmare it faces on a daily basis. He spoke to a claimant whose claim had still not been dealt with after 21 years. The Committee has heard over past few years that about half a billion has been spent on the replacement of various IT systems. The current system is just as dysfunctional as the last. He was not sure why Clause 43 was necessary. There are other things that need to be changed. When you want to change legislation, you want to change some evil that exists. He said he was not sure what evil existed. Is there any evil that exists now?
The Chairperson said Mr Bagraim should only ask clarity seeking questions.
Mr Bagraim asked what evil SAMA thought existed in the Compensation Fund. He knew that travel injuries to and from work was being removed. He asked if research was done on people who use taxis and get injured on the way to work. He asked about the constitutionality of this. Will these changes not place more pressure on public hospitals? By not allowing to cede claims, businesses will be destroyed.
Ms Denner said third party administrators are immediately demonised by the Department. She asked about the importance of third-party administrators in relieving the burden on medical practices and the effect of the Compensation Fund’s poor administration on workers on the ground
if Clause 43 is allowed in the Bill. Since SAMA was not consulted on the socio-economic impact assessment (SEIA) done in 2015, could the Committee access this SEIA and was it meaningful? How are doctors within their rights to refuse to see injury on duty (IOD) patients and what effect does this have on the workers on the ground.
Dr Coetzee replied that doctors can legally refuse to see a patient when it is not a life-threatening situation. The doctor is only obliged to see patients in a life-threatening situation. If there is no proper billing system and clinical record keeping for injuries at work, it becomes an administrative nightmare. Medical practitioners are to give the best care to patients and not deal with administrative challenges. COIDA patients were not often seen by SAMA doctors. Often employers do not know what documentation should be given to SAMA.
The Chairperson asked what SAMA was proposing in place of Clause 43. She gave an example: If someone is injured at work and has a claim of R150 000, does the person receive the entire R150 000 pay out? If the Compensation Fund is dysfunctional, has SAMA ever requested to be exposed to how the system works physically. Has it approached the administrative services at the Compensation Fund?
Dr Coetzee replied that she had met with Compensation Fund on a number of occasions in her own personal capacity. When it wanted to implement the second last IT system, SAMA advised them that the system is not user friendly and was very complicated. This would not add any value for doctors and should not be implemented. At the time, the system was already paid for. For many years SAMA had a good relationship with COIDA and would have stakeholder meetings. The problem is that the Compensation Fund had a high turnover of Acting CEOs and managers and at some stage one cannot start all over again explaining what had already been explained six months before on what the problem is. There was no progress. Unfortunately, listening to the private sector at some stage becomes a “tick box” exercise. This is a problem.
On the example given of the claimant receiving the full R150 000, she replied this was not the function of doctors. The doctors only submitted invoices and whether patients are receiving compensation is outside the domain of SAMA or the average medical doctor.
On the IT systems, there have been five new systems over the past few years. SAMA wanted Clause 43 to be removed and did not want this amendment as third parties make the process work. SAMA would fill in forms but would not claim anything from COIDA. There should be a paper trail of injured patients.
Dr Mzukwa explained that there are two processes that need to be followed concurrently when a patient is injured. A patient must receive medical attention as soon as possible. The employer must provide paper work so the patient can be attended to by a medical practitioner. The Occupational Health Practitioner, such as doctors who have done a course on occupational medicine, must assess the injuries and the time lost by the patient at work so they can be paid for the missed working days. They need to assess the part of the body that was injured and the severity of that injury. There is a formula used for this by COIDA. The Occupational Health Practitioner decides what the patient should be compensated according to this formula. These are two separate processes.
Association for Dietetics South Africa (ADSA) submission
Ms Alta Kloppers, ADSA Executive Committee representative, presented a case study and video.
Non-payment of dietitians as service providers to members of the Compensation Fund
After an injury on duty, the main objective is to place a fully recovered, rehabilitated and functional individual back into the workplace. Evidence supports the crucial role of the dietitian, as part of the multi-professional team, to ensure nutritional care of patients after injury that inevitably not only contributes to decreased healthcare costs as a result of fewer complications and decreased length of hospital stay but also to the uncomplicated rehabilitation of patients.
Prior to the Commissioner implementing the Umehluko software program on 4 August 2014, dietitians were reimbursed manually in terms of section 73 of the Act, for services rendered to critically injured patients admitted to hospital ICUs.
After implementation of Umehluko and other versions of similar software programs, manual payments could no longer be made to dietitians, as the programs do not include tariffs for dietitians.
Despite non-payment, many dietitians are currently, for ethical reasons, still rendering these essential services to Compensation Fund members without reimbursement, as without these services, the health and recovery of these patients are jeopardised.
ADSA was advised by the Department to urgently negotiate tariffs and listing in the Government Gazette. Since September 2015, ADSA attempted to motivate for the listing of dietitians in the Government Gazette. Despite annual attempts, ADSA has been unsuccessful.
Attempts to obtain a meeting date during 2020
On 26 November 2019, ADSA was granted a meeting by Ms Milly Ruiters, Chief Director: COID Services. During the meeting, a comprehensive discussion of the motivation for dietetic services to members of the Compensation Fund took place. After the meeting ADSA was informed that the motivation was too late for the 2019/20 consultation process and that it needed to resubmit the motivation for the 2020/21 process.
ADSA had started requesting meetings since July 2019 and was informed by Ms Ruiters that the consultation process for 2021/22 financial year only commences in August 2020. ADSA was advised that the Department sourced the assistance of specialists to review the tariffs and that the Billing and Coding Unit headed by Ms Dolly Nkabinde will communicate meeting dates with ADSA.
A follow up request for a meeting date was done via email on the 12th August 2020 and ADSA was advised that consultations begin in August and the Fund would consider previous submissions and then a final decision would be communicated.
A final follow up email was sent to Ms Nkabinde on the 19th September 2020, but ADSA received no reply from the Department.
ADSA would like to engage with the Director-General of the Department of Employment and Labour on the listing of dietitians in the Government Gazette as service providers to members of the Compensation Fund that obtained injuries while on duty.
The Chairperson asked why ADSA’s submissions had never been gazetted and why this was only being done now.
Ms Kloppers replied that since 2015 to date, ADSA had annual meetings and submissions with the Department of Employment and Labour. She referred to the meeting held with the Department in November 2019 which had a positive outcome. ADSA stated its case at the meeting, but did not receive any feedback from the Department. ADSA approached the Department to make another submission, but it was notified that it could only do this at the end of August or September 2020. The same thing happened in previous years and ADSA wrote to the Director General at the end of 2020, but still received no response. The email was sent again toward the end of January 2021 and again, no response was received. ADSA is submitting claims through an agent, but these claims are rejected.
The Chairperson said ADSA should encourage males to become dietitians so that it is not a female- dominated sector. ADSA should also visit high schools as there are males interested in the profession.
South African Institute of Chartered Accountants (SAICA) submission
Ms Juanita Steenkamp, SAICA Project Director: Governance and Non-IFRS Reporting, said that when the Department called for comments in 2018 on the Draft COID Amendment Bill, SAICA submitted a submission but it seems the input from SAICA was not considered. SAICA received submissions from its members complaining that stakeholders in the industry were not adequately engaged and consulted on the impact of the proposed amendments in the Bill.
According to Cabinet Memoranda, seeking approval for draft policies, bills or regulations must include a socio economic impact assessment that has been signed off by the Socio-Economic Impact Assessment System Unit.
SAICA notes that no such assessment was conducted and none of the documents including the Memorandum on the Objects of the COIDA Bill suggest otherwise.
The proposed amendment to include domestic workers in the definition of an employee is lauded but we are concerned about the Compensation Fund’s ability to deal with this administratively.
Employers currently face enormous battles to register as the current system only allows for companies. Others such as non-profit organisations, sole traders and trusts need to register by sending information via email. SAICA questions how individual employers will be able to register via email. SAICA has received numerous complaints where registration takes longer than a year. Clients submit the registration forms and receive no feedback.
The Compensation Fund does not have a great track record in paying claims and service providers can wait from 180 days to numerous years. The Fund’s inability to pay claims speedily might impact medical service providers who cannot afford not to be paid for a number of months.
Clause 43 means that medical service providers may no longer cede their claims to third party administrators. This will impact the most vulnerable of employees, including domestic workers who will now be included, as the medical service provider might decide that they do not want to continue treating injury on duty (IOD) patients.
The unintended consequence of the Clause 43 amendment is that many service providers may be reluctant to treat IOD patients. This will place an additional burden on government health services that are already over utilised and that may not have the capacity to accommodate additional patients. The injured employee may be severely prejudiced and companies fear that many IOD employees will simply not receive medical treatment. The public interest will not be served under these circumstances.
In the assessment of the employer annual fee to the Compensation Fund based on its workers' earnings, the COID Act states that where the actual earnings differ from the current estimated earnings shown in the return the Commissioner shall adjust the assessment. The Fund then requests further information and should the information not be forthcoming the Fund assesses the employer on an estimated figure. SAICA agrees that where employer does not respond the Fund should continue with the assessment. However, numerous members have complained that they submit the information and no feedback is received. The Fund then continues to assess them on the incorrect figures and there is no method to engage the Fund on correcting the information.
SAICA is concerned that the Bill states that where the actual earnings were more than estimated earnings, the difference will be recovered and the fund may impose a penalty. There is no clarity on the penalty amount and the information to be considered when the penalty is imposed.
• The impact of the amendments affects the public at large, accountants and members in business, all who participate in and will benefit from a well-managed social security system. A balance however needs to be achieved between the interest of all parties as relates to compliance and fairness.
• The Department of Employment and Labour’s approach is untenable as consultation is required in a participatory democracy.
• SAICA recommends that an assessment of the socio-economic impact of policy initiatives, legislation and regulations be completed by the Department as per the Cabinet decision.
• The Fund needs to inform how individual employers will register to ensure that this process will be able to function efficiently and effectively.
• The Fund needs to consider the impact of the proposed changes on medical service providers and on work employees claiming the benefits.
• The Fund should consider the impact of the proposed changes to medical service providers and their employees claiming the benefits. As no regulatory impact assessment was mentioned, SAICA questions the potential impact of the proposed Clause 43 as well as the constitutionality of unreasonably prohibiting business practices with no apparent rationale.
• The Bill needs to set out a method for employers to object to incorrect assessments prior to penalties being levied. Details on the calculation of the penalty and an objection process need to be included.
Ms Steenkamp concluded by saying that many presenters have spoken of the difficulty engaging with the Compensation Fund. Over the past few months, SAICA had numerous positive engagements with the Fund. SAICA thanked the Fund for this and said it would like to continue its engagements in this manner.
The Chairperson thanked Ms Steenkamp and said this was very encouraging to hear. There were no questions or comments by the Committee.
Nala Business Chamber submission
Mr Ntozelizwe Mqenebe, Nala Business Chamber CEO, highlighted the following issues:
• The negative impact of illegal contractors that do not report their workers injured at a worksite to the Department particularly on COIDA.
• This might fall under a criminal case but what happens to such a contractor when workers are injured – there is a need to report this so that it is avoided in future.
• Compensation is clearly defined in section 1(e) but implementation is flawed. Some family members have to date not been taken care of in terms of medical care, constant attendance and care or funeral costs.
• In some cases, workers have third degree burns incurred during performance of their work duties who have not been assisted to date. Some people have died.
• Nala Business Chamber believes the penalties applied to employers are very low and that the penalty must be a percentage of the total revenue and not only of the profit.
The Chairperson said the submission would assist in the Committee’s deliberations. There were no questions or comments by the Committee.
The meeting was adjourned.
Dunjwa, Ms ML
Bagraim, Mr M
Denner, Ms H
Nontsele, Mr M
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