AT210708: Report of the Portfolio Committee on Employment and Labour on the Public Hearings Held on the Compensation for Occupational Injuries and Diseases Amendment Bill, Dated 7 July 2021
REPORT OF THE PORTFOLIO COMMITTEE ON EMPLOYMENT AND LABOUR ON THE PUBLIC HEARINGS HELD ON THE COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES AMENDMENT BILL, DATED 7 JULY 2021
The Portfolio Committee on Employment and Labour having conducted public hearings from 20, 21, 22 and 28 April 2021 on the Compensation for Occupational Injuries and Diseases Amendment Bill, reports as follows.
The Compensation for Occupational Injuries and Diseases Amendment Bill (the Bill) was referred to the Portfolio Committee on Employment and Labour (the Committee) on 10 September 2020. The Committee was briefed on the proposed amendments by the Department of Employment and Labour on 4 November 2020.
The Department of Employment and Labour informed the Committee during the briefing that in 2014 the Compensation Fund embarked on a process to amend the Compensation for Occupational Injuries and Diseases Act (COIDA) (No. 130 of 1993). The Committee was informed that this was as a result of, among other pertinent legislative issues, the Minister’s provincial Izimbizo with domestic workers. Furthermore, in 2019 the High Court of South Africa declared section 1 (xix)(v) of COIDA to be unconstitutional and invalid to the extent that it excluded domestic workers employed in private households from the definition of “employee”. The Court directed that this subsection be removed from section 1 of COIDA.
In accordance with section 59 of the Constitution, the Committee resolved to conduct public hearings as an initiative to test public opinion on the proposed amendments to COIDA. The public hearings were held on the zoom platform on 20, 21, 22 and 28 April 2021.
The following entities made oral submissions before the Committee: 20 April 2021
National Employers’ Association of South
Mr Gerhard Papenfus
Mr Gideon Nkadimeng and Ms Dewald
Minerals Council of South Africa
Ms Nikisi Lesufi and Dr Thuthula Balfour
Women’s Legal Centre
Ms Chrisentia Blouws & Ms Qiqa Nkomo
21 April 2021
Quad Para South Africa (QASA)
Mr Greg Daniels
South Africa Medical Association (SAMA)
Dr Angelique Coetzee and Dr Mvuyisi
Association for Dietetics South Africa
Ms Alta Kloppers, Mr Alpha Rasekhala and
Ms Kgadi Moabelo
South African Institute of Chartered
Ms Juanita Steenkamp
Nala Business Chamber
Mr Ntozelizwe Benjamin Mnqenebe
22 April 2021
Occupational Therapy Association of South
Mr Elvin Williams, Prof Pat de Witt, Ms
Natalie Powell and Mr Leandri Richter
Mr Fritz Luttich, Mr Craig Tudhope and Ms
Socio economic Rights Institute (SERI)
Ms Kelebogile Khunou, Mr Thulani Nkosi
Mr Metthew Parks
Ms Hanlie Van Vuuren
28 April 2021
Relay Emergency Medical Services
Mr Richard Moodie
Hospital Association of South Africa
Ms Amrita Raniga, Mr Gavin Harrison and
Dr Dumisani Bomella
Richard Spoor Incorporated
Mr Richard Spoor and Mr George Kahn
Workers Compensation Assistance (WCA)
Mr Brian Pivo and Ravishni Mahadeo
Injured Workers Action Group (IWAG)
Mr Tim Hughes
The following section of this report is a summary of oral presentations made by organised formations as well as public institutions during the public hearings.
2.Summary of Oral Submissions
Summary of oral submissions made on 20 April2021
Below is the summary of oral submissions made on 20 April 2021 in the order in which they were presented.
National Employers’ Association of South Africa (NEASA)
The National Employers’ Association (NEASA) presented as follows:
- The Compensation Fund is not fulfilling both its constitutional as well as its legislative mandate.
- The Fund has been dysfunctional for some time as evidenced by negative audit opinions for the past five years.
- The information and technology systems, lack of skills, fraud and corruption are some of the challenges facing the Fund.
- NEASA was of the opinion that nothing has been done about these challenges faced by the Compensation Fund.
- Currently medical service providers choose to cede their claims to the Fund to third parties administrators. This is to ensure that injured workers are treated timeously. Changing this arrangement, as it is proposed by the amendments, will result in adverse effects such as:
- inability of workers to return to work;
- increase in litigations; and
- injured workers waiting long for claims to be approved before receiving treatment.
- NEASA is opposed to clause 43(4), which seek to amend section 73 of the principal Act which will render ceding agreements void.
- NEASA pointed out that involvement of third parties in claims administration is not unique to the Compensation Fund, it is also found in the Road Accident Fund and Medical Aid schemes.
- The memorandum, which accompanied the Bill did not explain the rationale behind the amendment of section 73, according to NEASA. This leaves the motive behind open to speculation.
- According to NEASA the proposed amendment to section 73 of the principal Act is nonsensical. The context and purpose of this amendment is not provided, thus making it difficult to provide inputs.
- NEASA asked the Committee to consider the irrationality of clause 43 and remove it from the amendment Bill as it is unclear whom this amendment will benefit. The presenter stated that it is incomprehensible for the Fund that is known for dysfunctionality to propose such an amendment.
- In response to what should be done to improve the situation, the presenter said the solution is for the CF to function effectively. According to the presenter third party involvement is necessitated by the failures of the CF. If the third parties are removed, the whole system will collapse, according to NEASA. The service providers will not be paid and they will turn away injury on duty patients. Injury on duty patients will have to be treated in already overcrowded public hospitals.
- This amendment will be legally challenged by third party administrators because it would be taking away a source of income from them. It will also be challenged by medical services providers because it helps them to focus on treating patients rather than doing administrative work.
COIDLink’s presentation focused on the role played by third parties or pre-funders in the claims administration process.
COIDLink presented as follows:
- Prefunding does not add costs to injured workers.
- Pre-funders deal only with their clients who are medical services providers.
- Claims administrators provide prefunding to the medical services providers and the service providers cede their claims to the administrator.
- Medical service providers do not suffer loss of cash flow while waiting for the settlement of claims.
- The Fund has changed its IT systems three times over the past 10 years and this has led to disruptions resulting to loss of money.
COIDLink cautioned that if clause 43(4) is implemented as it currently is, it will result in the following:
- Negative impact on workers, job creation and health care system.
- The public health care system is already over-crowded and will not cope with the addition of injury on duty patients.
- The livelihoods of claims administrators will be destroyed.
- It will have a direct negative impact on their supply chain companies e.g. Human Resource and IT companies. COIDLink has 60 suppliers that benefit from their operations.
- Medical service providers will be reluctant to treat injury on duty patients.
- This amendment will create a barrier to entry and only well-resourced practitioners will survive.
- Clause 43 will result in claims administrators being deprived of their assets.
- It will result in reduced economic activity and job losses.
COIDLink made the following proposal:
- A detailed study of the claims administration industry should be conducted and industry stakeholders to be involved.
- A system of accreditation and licensing of pre-funders should be explored.
In response to an allegation of manipulation of the claims process by administrators, COIDLink CEO pointed out that they have never been taken to court by the CF for fraudulent claims.
Minerals Council of South Africa (MCSA)
The Minerals Council of South Africa (MCSA) made a clause by clause oral submission on the proposed amendments to the COID Act.
MCSA commented as follows:
- Clause 1, amending section 1 of COIDA
The word “disease” is not defined. It will therefore include any disease arising out of or in the course of an employee’s employment, for example, a flu or a cold are included under the word “disease” as defined. In order to remove the unacceptable consequences of the confusion caused by the word “disease”, they suggested that the word “disease” in the definition of “accident”, be replaced with the words “occupational disease”.
- Clause 1, amending Section 1 of the principal Act
MCSA proposed that the definition of “employee” in COIDA be amplified by adding paragraph (e) to the definition, which reads as follows:
“(e) an employee who works for the first time at an Occupational Diseases in Mines and Works Act (ODMWA) mine or works on or after the commencement date of this Amendment Act and who suffers from an occupational disease”.
- Clause 8, amending section 16 of the principal Act
MCSA proposed that the words “life enhancement assistance” in clause 8 that seeks to amend section 16 of the Act be defined. Such a definition should also contain the safeguard that such assistance must be approved by the Commissioner.
- Clause 12, amending section 22(5)
The words in clause 12 amending section 22(5) of the principal Act “in furtherance of the business of the employer” should be replaced with the words “arranged by the employer”.
- Clause 16, amending section 30(1)
Provision must be made for the continuation of the rights and obligations of a mutual association that has an existing license.
- Clause 19, amending section 39 of COIDA
MCSA proposed that the penalty of 10% be limited to the earnings of the employee(s) involved in the accident and that penalty be the maximum which may be imposed.
MCSA was of the view that if the new proposed provision remained unqualified, it would have draconian consequences since it did not give the Commissioner any discretion to impose a lesser penalty.
- Clause 33, amending section 56 of the principal Act
MCSA was of the view that the existing provision must not be amended as no engineer has been or will be appointed under the MPRDA 2002, as no regulations exist.
- Clause 43, amending section 73 of the Act
MCSA’s view was that there is no basis for introducing the proposed amendment. Furthermore, they felt the prohibition against the “relinquishment” of such a claim is nonsensical and is probably unconstitutional.
Current delays and bureaucracy for health care providers makes business sense for them to cede claims to entities that specialises in this activity
- Clause 47, section 78 of COIDA
MCSA proposed that a new paragraph (d) be added, which provides as follows:
(d) the Commissioner may at the election of the employer reimburse a medical aid fund through which medical aid was provided to employees, such cost out of the Compensation Fund as the Commissioner may deem equitable.”
- Clause 59, section 93D of COIDA
MCSA recommended that the person being questioned must have the right against self- incrimination.
Furthermore, a provision similar to section 91 of the BCEA should be inserted which provides as follows:
“No answer by any person to a question by an inspector conducting an investigation, questioning or inspection in terms of this Act may be used against that person in criminal proceedings, except in proceedings in respect of a charge of perjury or making a false statement”.
Women’s Legal Centre (WLC)
The presentation of the Women’s Legal Centre (WLC) focused on clause one, which proposed to amend section 1 of the principal Act so as to include domestic workers in the definition of the employee.
WLC cited the Mahlangu case where the Court declared section 1 (xix)(v) of Compensation for Occupational Injuries and Diseases Act (COIDA) 130 of 1993 to be unconstitutional and invalid to the extent that it excluded domestic workers employed in private households from
the definition of “employee”. The Court directed that this subsection be severed from section 1 of COIDA.
Ms Nkomo presented as follows:
- Domestic work sector is composed of 80 per cent women who work under precarious working conditions.
- WLC welcomed the amendment of section 1 of the principal Act to include domestic worker in the definition of an employee.
- Ms Nkomo emphasised that the Mahlangu Court order was to be retrospective in implementation. However, she pointed out that retrospective implementation was not reflected in the Bill.
- She recommended that practical steps be taken to make sure that domestic workers are aware of the Mahlangu case and its implications to their rights.
- WLC welcomed the proposed amendment of section 1 of the principal Act so as to include a life partner in the definition of “dependant of an employee.”
- The definition of the dependant of an employee was also to be amended to include a child below the age of 25 if the child is still receiving tertiary education. WCL was of the view that there is no justification for this age limit since social security benefit is a right and not a privilege.
- WLC welcomed the proposed amendment of the definition of an “occupational disease” to include post-traumatic stress disorder.
- WCL welcomed clause 12, which proposed amendment of section 22(5) to extend protection to employees who got injured while transported to work.
WCL made the following recommendations:
- The Department of Employment and Labour (DEL) to provide a rationale for the exclusion of a child who is above the age of 25 and not receiving tertiary education from the definition of the dependant of an employee.
- DEL must make sure that those who are to be impacted the most by legislation, domestic workers in this case, are aware of the proposed amendments.
- The Portfolio Committee on Employment and Labour (the Committee) must consider the capacity of the DEL to bring the amendments to life.
- The Committee must ensure that the proposed amendments are implemented retrospectively.
- DEL must adopt a proactive approach in raising awareness of the Mahlangu case among domestic workers.
- DEL must be encouraged to travel to rural areas to create safe spaces for women to report injuries on duty.
Summary of oral submissions made on 21th April 2021
Below is the summary of oral submissions made on 21 April 2021 in the order in which they were presented.
Quad Para South Africa (QASA)
QASA made oral submission as follows:
- That provisions of COIDA must be interpreted generously in favour of employees.
- That an open list of persons who may be consulted that includes service providers and organisations for disabled persons must be provided instead of just the Health Professions Council of South Africa (HPCSA) and registered Medical Associations.
- Generic description of devices must be used to avoid restriction in procurement.
- Amended section 73(3) makes provision for the medical practitioner to apply for reopening of the claim and payment of further medical costs after the claim has been finalised or the period has lapsed. QASA pointed out that hospitals are not prepared to wait for claims to be reopened and that state hospitals do not always have the specialist care or resources available resulting in worsening of the initial condition, e.g. pressure sores and even death. Therefore, QASA proposed that the claims of permanently disabled beneficiaries remain open so that they are able to access emergency care and hospitalisation at suitable facilities.
- Clause 24 proposed amendment of section 44 to extend the date of reporting an accident from 12 months to three years. Previously accidents were reported to the commissioner, employer or mutual association concerned. The amendment proposed to restrict reporting to the Commissioner only. QASA proposed that the accidents be reported to either employer or Commissioner and the Commissioner be provided with a discretion to process claims after the 3-year period on good course shown.
- QASA proposed that the monthly pensions that are below the hourly rates of a sector as provided in the National Minimum Wage Act (NMWA) be adjusted upwards from the date that the NMWA came into force.
- Further, QASA proposed that the allowance paid to constant attendants be revised and brought in line with the requirement of the permanently disabled beneficiary (who may require 24-hour attendance) and of the NMWA.
South African Medical Association (SAMA)
SAMA is a professional association with voluntary membership of about 12 000 registered medical doctors practising in the public and private sector.
SAMA made their oral submission as follows:
- Clause 43, amending section 73 of the principal Act will have a catastrophic impact on injured workers and the doctors, surgeons, hospitals, physiotherapists and other health professionals who provide their treatment.
- SAMA did not support the amendment of section 73 by clause 43 of the amendment Bill in the form that it has been proposed.
- SAMA requested that subsection 4 of the proposed amendment to section 73 be removed from the amendment Bill.
- The reason for the request was that the amendment 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 in a highly dysfunctional environment.
- SAMA is opposed to this amendment on the grounds that it will place an immense administrative, financial and legal pressure on the healthcare sector and disadvantage injured workers, and their right to quality medical care.
- SAMA was of the view that both the Fund and its IT system are dysfunctional. They stated that the current IT system is as dysfunctional as the previous one.
- According to SAMA, the process of administration with the Compensation Fund is riddled with delays and has proven ineffective, which generally leads to medical practitioners only receiving compensation for their services after two years of the claim
being submitted (if at all). In the 80’s and 90’s doctors submitted claims directly. Problems started end of 90’s and in 2000’s doctors started to make use of 3rd party administrators.
- SAMA also submitted that clause 43 is unconstitutional and irrational. Further, SAMA submitted that this amendment is an infringement of section 22 of the Constitution of the Republic of South Africa, which stipulates that every citizen has the right to choose their trade, occupation or profession freely.
- SAMA was of the view that public hospitals are, lamentably, overburdened, resource constrained, often poorly managed and under-staffed. Further, most of the affected employees will be relegated to these facilities, where sub-par quality of care is unfortunately not uncommon.
Association for Dietetics South Africa (ADSA)
The main focus of ADSA presentation was to motivate for the listing of dieticians as service providers to members of the Compensation Fund in the Government Gazette and highlight the essential role of the dietician as a member of the multidisciplinary team treating patients.
The presenter stated that prior to the implementation of UMehluko programme on 4 August 2014, dieticians were compensated in terms of section 73 of COIDA for services rendered to critically injured patients admitted to ICU.
UMehluko as well as various other software programmes implemented thereafter did not make provision for the compensation of service providers not listed in the Government Gazette.
Despite non-payment, dietitians are currently, for ethical reasons, still rendering these essential services to members of the CF without reimbursement.
DEL advised ADSA regarding the listing of dieticians in the Government Gazette.
Since 2015, ADSA attempted to motivate for the listing of dieticians in the Government Gazette. Despite annual attempts, ADSA have been unsuccessful.
Dietitians are reimbursed for IOD claims according to (i) private funders; (ii) public sector; and (iii) COIDA for claims administered by Rand Mutual Assurance (RMA) and Federated Employers Mutual Assurance Company (FEMA). However, they are not reimbursed for IOD via Workmen’s Compensation Fund.
ADSA is of the opinion that according to the Bill of Rights, Section 27 of the Constitution and the HPCSA’s interpretation thereof as per Booklet 3 (National Patient’s Right Charter), the non-recognition and non-payment of dietetic services is a transgression of the protection of the human rights of members of the Workmen’s Compensation Fund.
Furthermore, the status quo constitutes discrimination in the workforce amongst workers as well as against dietetics as a profession.
South Africa Institute of Chartered Accountants (SAICA)
SAICA made a clause-by-clause oral submission on the proposed amendments, as follows: Clause 1, section 1
- SAICA supported changes of including domestic workers in the Act. However, SAICA raised the following concerns with implementation:
- Statistics South Africa estimated that there were 864 000 domestic workers in the country in September 2020.
- The registration process for domestic workers is currently manual.
- There is poor feedback from the CF once manual documents are submitted.
- There is difficulty in correcting errors once documents are submitted.
- Currently employers are engaging service providers to assist with claims due to difficulty in engaging with the CF
- Domestic employers would not necessarily be able to appoint service providers to address- administrative difficulty.
- Received assessment, based on rates can be minimum of R492,66 but CF has a minimum assessment of R1 284 per annum.
- If a mistake is made, employer has to correct within 30 days otherwise CF will not review assessment.
- A transitional provision must be included to address issues such as: (i) how will changes be implemented and how to receive reference number (ii) when employer register must they now pay assessments for previous years (iii) turnaround time in receiving feedback when registering.
Clause 43, section 73
The following issues must be taken into consideration:
- Cession assist medical service providers to be paid.
- 3rd party service providers have systems in place.
- Shorter turnaround times.
- Medical service providers don’t have time and know how on how to deal with the CF.
- Impact on IOD patients, service providers and 3rd party providers.
Unintended consequences of clause 43
- Valid claims that were ceded and/or assigned from medical services providers and submitted to the Fund for payment prior to commencement of the Act will be “void” (not voidable).
- The existing pre-funding book would in effect be wiped off the balance sheet of companies with the effect that financial institutions that advanced funds to these companies will cancel all facilities and will foreclose on their security.
- The proposed amendment seemingly has retrospective effect and the retrospectivity prejudices pre-funders that legally conducted its business before the proposed amendment.
Recommendation on clause 43, section 73(4)
- Consider impact on vulnerable employees.
- Consider impact on medical service providers.
- Question whether the Regulatory Impact Assessment took this into account.
- Seem to unreasonably prohibit business practices with no apparent business rationale.
- Therefore, SAICA requested deletion of this proposal.
Clause 51, section 83
The Committee must consider the following:
- There is no information on amount of penalties.
- System issues lead to employers submitting manually and charged with late submission penalty.
- There is no method for employers to object.
- Employers don’t receive feedback after submitting information to CF.
Recommendation on clause 51, section 83:
- The Bill needs to set out a method for employers to object to incorrect assessment prior to penalties being levelled.
- Detail regarding the calculation of the penalty to be provided.
- A process to object to the assessment needs to be included.
Nala Business Chamber
Nala Business Chamber is a legal NPO Business Chamber under the South African Chamber of Commerce.
Nala reported negative impact they have of the illegal forums who injure people at worksite and contractors or clients do not report such incidents to the DEL and particularly COIDA.
They inquired as to what happens to the client who invited the visitor or worker who get injured in their property?
Nala was of the view that illegal forums require thorough analysis and incorporation into the legislation.
Nala felt that the penalties given to the employers are too low and they must be a fraction or percentage of the total revenue and not profit. Furthermore, Nala felt penalties need not only look at bigger companies, but also smaller companies if they’ve transgressed in terms of the regulations in line with Occupational Health and Safety Act and COIDA.
Summary of oral submissions made on 22th April 2021
Below is the summary of oral submissions made on 22 April 2021 in the order in which they were presented.
Occupational Therapy Association of SA (OTASA)
OTASA made the oral submission as follows:
- OTASA supported the inclusion and incentivisation of vocational rehabilitation in the Bill, in restoring an employee’s independence and social integration to the maximum extent practicable.
- OTASA was particularly pleased that the rehabilitation framework was being used, which is:
- clinical rehabilitation and the provision of assistive devices for the purpose of physical and psychological recovery of the employee and to reduce any disability resulting from an occupational injury or disease;
- vocational rehabilitation to assist an employee to maintain employment, obtain employment, regain or acquire vocational independence; and
- social rehabilitation to assist in restoring an employee’s independence and social integration to the maximum extent practicable.
- OTASA highlighted the complexity of these processes and the types of service delivery that require inclusion and funding and the significant role Occupational Therapists (OTs) can play in the achievement of this outcome.
- OTASA welcomed the inclusion of domestic workers among the range of employees that may receive benefits from the Compensation Fund. As a result, OTASA assumed that there will be an increase in:
- the number of users;
- the extent and nature of services to be delivered in order to fulfil the mandate of the Bill; and.
- this in turn will require an increase in the number of OTs.
- OTASA reported the following problems encountered by OTs in providing services for workers injured on duty:
- Registration on CompEasy system. Of those surveyed, 50.9% reported successful registration in February 2021.
- Navigating the CompEasy system. Only 21.8% reported to be able to navigate the system. Those who reported inability to navigate the system were 78.1%.
- Submission of claims. Of those surveyed, only 21% reported that they were able to submit claims on CompEasy. The remaining 78% reported that they were not able to submit claims on CompEasy system.
- Unpaid invoices averaged 80% in August 2020.
- Of those surveyed, 48% and 62% reported retrenching staff and reducing working hours as a result of non-payments respectively.
- As accounts often remained unsettled due to employers not registering their employees on the CompEasy system, OTASA welcomed the penalties for employers to ensure better compliance.
- OTASA was of the view that CF should be held responsible and accountable for the utility of the CompEasy system, as the size of penalties can be considerable.
- The terminology used on the Bill focuses on “medical practitioners”. This has a consequence for:
- what is paid (medical expense); and
- term interferes with professional independence (specifically on forms).
- The term “health care practitioners” would be more fitting.
- The term “medical aid” within the Bill is confusing, since it is used inconsistently with the term in the private health care industry.
- Clause 43, section 73
- According to OTASA, the proposed prohibition on involvement of intermediaries in claims and compensation recovery process is controversial.
- They expressed grave concern about the capacity of the CompEasy system and the CF’s ability to settle accounts within working days.
- OTASA reported that from their recent survey, most of their members use an intermediary. The number of members working directly with the CF decreased from 29%, to 20% and currently stand at 18.8%. Of those surveyed, 67.2% reported that the prohibition of intermediaries would affect their financial viability and 60% said they would probably no longer treat CF patients.
- OTASA outline the negative experiences of OTs working directly with the Compensation Fund. These included ICT challenges and inability to resolve queries through the call centre, which they said put them on hold for extended period of time. They outlined the implications of these experiences for patients as follows:
- Drop in standard of care as patients are not seen as frequently to limit financial risk and pressure garments and splints that require expensive materials in their manufacture are not being prescribed as frequently.
- Medical professionals refuse to see COID patients resulting in patients’ inability to access health care.
- Poor prognosis and increased disability resulting in increased pay-outs from the Fund.
Compsol is a claims administration company, which has an establishment of 438 staff members most of them stationed in the Eastern Cape. Its oral submission focused on the role played by third parties or pre-funders in the claims administration process.
Compsol presented as follows:
- Compsol stated that their medical services providers are owed more than R556 million in switched but unpaid accounts. In addition, they said more than R180 million worth of services were already rendered in good faith, but not yet submitted as claims could not be registered due to CompEasy system problems.
- They stated that it takes 347 days on average for CF to pay an invoice. Gqeberha labour centre was identified as the one that take the longest time to pay an invoice at 474 days. A Medical Aid pays an invoice within 25-40 days, while Compsol pay within 14 days on average.
- Compsol view the role of cessionaries as follows:
- Gate keepers and aggregators.
- Ensure that medical service providers, employers and injured workers realise their rights in terms of the COID Act.
- Provide administrative support to employers, employees and medical services providers.
- Provide working capital to medical services providers.
- Eliminate 99.9% of potential fraud.
- Elimination of fraud by ensuring legal compliance before an invoice is submitted to the Fund via the state of the art software with built-in validations.
- Invoices are switched after the Fund has accepted liability for the incident.
- Medical service providers carry the full cost of a commercial factoring agreement. No costs to employer, injured worker or the Fund. The factoring process happens post patient treatment and does not prohibit any medico legal action against the medical service provider. Factoring has the following benefits:
- Much needed working capital is injected into medical practices ensuring their sustainability and willingness to treat injured workers.
- Allows young, newly qualified doctors to get their practices established, buy equipment and sustainably treat IOD patients.
- Injured workers are assisted by willing and able MSPs.
- Back-to-work protocols ensure minimum negative impact on the economy.
- Employers have minimum downtime and are assisted in their effort to comply with the complex COID environment.
- Compsol was of the view that clause 43(4) seeks to ban the collective ability of third party cessionaries to hold the CF accountable for just administrative action.
- Compsol highlighted Courts’ rulings against the Fund. They reflected on 113 invoices that were invalidly rejected. Of these invalid rejections, 85 were a result of the Fund’s software problems and 28 were a result the Fund’s staff problems.
- Compsol pointed out that the following stakeholders were not consulted when the SEIA was conducted:
- “Third parties” – neither cessionaries nor administrators
- Private health care sector
- Registered credit providers, cooperative financial institutions, registered banks, factoring houses or other financial institutions
- They also pointed out that clause 43 was not included in the presentation to the Committee on 4 November 2020.
- Compsol defined “cede” or “purpots to cede” as follows:
- Cession is an act whereby the cedent (medical services provider) transfers rights (invoice) to the cessionary (commercial bank, registered financial services and credit provider of Compsol). Simply the sale of a medical invoice for service already rendered.
- According to Compsol cession is not and does not:
- prevent the CF from interacting with its clients;
- cause or increase the risk of fraud;
- determine into whose bank account monies for medical services administered are to be paid;
- impact the compensation benefits received by the injured employee;
- result in additional costs to the CF; and
- violate any provisions of the Health Professions Act.
- Compsol stated that risks identified by the CF e.g. fraud and corruption should be addressed through a system of well-established preventative, corrective and detective controls and a strong control environment with general and application controls e.g. SAP, not legislative amendments.
- According to Compsol clause 43(4) is unconstitutional because of the following reasons:
- It will prevent medical service providers from using their invoices as collateral for financing of working capital which infringes on their right to property.
- It is intended to limit the medical service provider’s right with what they may do with their medical accounts for services already rendered. It purports to govern and control the economic rights of a medical service provider.
- It will prevent medical account cessionaries to access the courts resulting in the CF no longer being held judicially accountable, which is not in the public interest.
Socio Economic Rights Institute (SERI)
SERI is a registered Non-Profit Organisation (NPO) that provides socio-economic rights assistance to individuals, organisations and social movements in South Africa. SERI represented Ms Sylvia Mahlangu in her case against the Minister of Labour (Now Employment and Labour) which culminated in a ground-breaking judgement of the Constitutional Court of South Africa. On 19 November 2020 the court handed down an order declaring constitutional invalidity of section 1(19) paragraph 5 of COIDA, which excluded domestic workers employed in private households from definition of employee. The court also ruled that the order of constitutional invalidity takes immediate and retrospective effect from 27 April 1994.
According to SERI, although the current Bill includes the domestic workers under the definition of employee, it does not give full effect to the Mahlangu judgement, which ruled that the judgement has to have immediate and retrospective effect from 27 April 1994.
SERI stated that in December (2020) it submitted a retrospective claim for compensation for the death of Ms Mahlangu. SERI noted that it is still impossible to process retrospective claims. Their interest is to ensure that domestic workers are sufficiently protected and that the Mahlangu judgement is fully complied with.
SERI presentation was divided into three parts, namely: Specific comments, secondly challenges affecting the realisation of domestic worker rights; thirdly challenges of enforcing the law and fourthly recommendations.
According to SERI, sections 38, 39, 41 and 44 present obstacles when it comes to retrospective claims.
- Section 38, Notice of accident by employee to employer
This section requires, an employee to file a notice of an occupational injury verbally or in writing to the employer. It also states that the notice of an accident can be given to the Commissioner.
Although it also states that failure to give notice to an employer does not bar a right to compensation, the employee must show that the employer had knowledge of the accident from any other source. It is therefore clear that this section requires the employee to file the first report of an accident, failing which his or her claim may be rejected.
SERI submitted that section 38 requires some reconsideration or an amendment. As a previously excluded group the domestic workers are unlikely to have filed this first report to employers. As it stands this section will disadvantage the domestic workers, asserted SERI.
- Section 39, Notice of accident by employer to Commissioner
Although there are proposed amendments to this section other provisions which prefer the employer as the first party to give notice of accident to the Commissioner and the time limits that are set out for giving such notices remain intact
SERI submitted that the scheme of this section works to disadvantage domestic workers whose employers have no duty to give notice of the accident to the commissioner. The DEL should consider making amendments to section 39 to accommodate workers submitting retrospective claims whose employers are either untraceable or unwilling to lodge a claim.
- Section 41, Particulars of claim
The difficulty with this section is that it provides for particulars of claim to be provided by employees when requested to do so and it is clear that the kind of particulars envisioned are
medical reports and the like. It should be acknowledged that domestic workers intending to bring in retrospective claims may not be in a position to provide these sort of particulars.
SERI therefore submitted that other forms or types of particulars to prove retrospective claims be considered and these could include affidavits or witness testimony and the DEL should consider other types of particulars as well
- Section 44, Prescription
States that the right in terms of the Act will lapse if the event is not brought into the attention of the Commissioner by the employer or mutual association concerned within three years from the date of the accident.
SERI submitted that a mechanism must be put in place to enable the Fund to process retrospective claims from domestic workers.
SERI was of the view that the proposed Bill should be withdrawn in its entirety because it does not address processing of retrospective claims or a new section should be introduced in the Act that would give effect to the Mahlangu judgement and the subject of retrospective claim.
Challenges affecting the realisation of domestic worker rights
- Wide spread non-compliance from employers
In the post-apartheid South Africa government sort to include domestic workers under labour legislation such as Basic Conditions of Employment Act, Labour Relations Act and Unemployment Insurance Fund. We also have sectoral determination 7 which establishes the basic conditions of employment in the sector. Despite these, domestic workers in SA still continue to work under unfair conditions. Employer non-compliance in the domestic sector is wide spread. It is therefore important to explore the nature of the sector, what characteristics facilitate employer non-compliance and challenges in enforcing the law if we are going to make any headways in this issue.
While some progress has been made with respect to enforcement in our country, it is clear that the enforcement mechanisms that are used in other sectors are made particularly difficult due to domestic workers’ workplace being the private home. So on the one hand you have domestic workers who are entitled to protection under the law and should have access to the visit of labour inspectors at workplaces on the other hand you have household members who also have the right to privacy of their home. So there is a conflict of rights which needs to be addressed.
- Challenges of enforcing the law
A lack of knowledge by employers and a lack of administrative and enforcement capacity pose a challenge to enforcing the law. SERI noted that the experience of domestic workers in accessing the UIF gives an example of what can be expected with the inclusion of domestic workers in COIDA because they are very similar social protection schemes. Reports state that only about 20% of domestic workers are registered for UIF.
SERI made the following recommendations:
- The Bill should be withdrawn in its entirety because the proposed amendments are inadequate in dealing with retrospective claims. When the Bill was drafted the retrospective claims were not considered. Alternatively, a new section on retrospective claims should be included.
- The Bill is not in alignment with the Constitutional Court judgement in Mahlangu and should be aligned.
- The DEL should promote health and safety in the domestic work environment in accordance with Occupational Health and Safety Act.
- The Department should create an incentive for employers of domestic workers to register and contribute to the Compensation Fund.
- The registration and contribution system for employers should be simplified.
- The Department should strengthen enforcement mechanisms in the domestic work sector by securing enough qualified labour inspectors.
- An internal directive within the Department should be sent out to all staff to educate them about how to process the retrospective claims.
- Retrospective claims received should be monitored and experiences of such claims shared.
- The Fund should outline deadlines for employers to register and the deadline for when new employer employee relationship is established and the Fund should communicate clear penalties for non-compliance.
- The Department should launch a public awareness campaign about the inclusion of domestic workers in COIDA.
COSATU welcomed and expressed strong support for the Bill because of its progressive provisions. COSATU encouraged Parliament to prioritise passage of the Bill since, according to the presenter, it is long overdue. COSATU presented as follows:
- COSATU welcomed the inclusion of all medical costs, constant attendance allowances and funeral costs because:
- Most workers, especially industrial and at risk workers do not have medical aid;
- Medical aids frequently exclude significant costs from coverage; and
- This will assist many workers with unforeseen and often unaffordable costs at a moment of distress or the loss of a bread winner for a family.
- COSATU supports the expanded definition of dependents since these are necessary to reflect the family and cultural norms of South Africa.
- COSATU strongly welcomed the long overdue inclusion of domestic workers under the coverage of the CF because:
- This will benefit the almost one million domestic workers who have been excluded to date;
- The Bill should not have been delayed for so many years; and
- The result has been in countless domestic workers denied Compensation Fund relief.
- COSATU welcomed the inclusion of post-traumatic stress disorder since:
- This is critical for many workers exposed to violent or other horrific workplace incidents;
- This will benefit security guards, mine workers, correctional service officers and many other workers exposed to violent and other traumatic incidents; and
- It will provide relief to women workers who have been subject to violence and abuse.
- COSATU welcomed the inclusion of cover for diseases resulting from the workplace since:
- This is critical for many workers exposed to unhealthy workplaces;
- Examples include exposure to asbestos in the mining and construction sectors, hazardous materials in the chemicals industries and more recently COVID 19; and
- This will provide security and relief to millions of workers and their families.
- COSATU supports the provision setting out Board membership and NEDLAC’s role in facilitating nominations from organised labour and business since:
- This is an employer and employee scheme and needs to reflect that;
- Support Board membership criteria; and
- Welcome criteria for removal of Board members.
- COSATU welcomed the introduction of no fault rule when determining compensation since:
- This is important to avoid unfair exclusion of workers;
- Accidents will often include some degree of fault;
- The point of CF is to assist workers with their medical costs, rehabilitation, reintegration, as well as their families; and
- It should not be used to punish workers and their families during already trying conditions.
- COSATU supports the provision for fines of up to 10% of earnings to offending employers in certain instances because:
- These are necessary to ensure that employers take compliance seriously and those who blatantly break the law are dealt with firmly; and
- Requirements to meet compliance are fair, rational and not onerous.
- COSATU welcomed extension of the time to submit claims from 12 months to three years since:
- This will assist workers battling to recover, those unaware of their rights or lacking the means to submit claims; and
- Government, employers and unions will need to play their respective roles in ensuring that all employers and employees are aware of the provisions of the Act.
- COSATU welcomed the additional six-months provision for workers to submit objections when good cause can be shown since:
- Often workers struggle to gather the required documentation; and
- This provision will provide additional space to do so if needed.
- COSATU welcomed the cover for road accidents occurring during the course of work under the CF and agree with prevention of double dipping and the coverage of accidents not occurring in the course of work under the Road Accident Fund.
- COSATU accept the role of lawyers in what are often complicated submissions and given the backlog of applications because:
- Lawyers’ excessive fees at expense of claimants has often robbed claimants of the little monies due to them and further strained CF’s limited tax payers’ funded resources;
- Accept conditions placed upon lawyers in the Bill; and
- Support court set fees’ limitations but needs to be enforced.
- COSATU supports the inclusion of provisions providing for shared and appropriate responsibilities between employers, contractors and sub-contractors because:
- This is critical to ensure that workers’ rights are not undermined by contracting and sub-contracting and that employers, contractors and sub-contractors are held accountable for their responsibilities.
- COSATU welcomed the provisions providing for incentives for employers who are in compliance with the Act and embrace good labour practices because employers need to embrace their roles in promoting labour market stability and decent work in order to boost productivity and spur economic growth.
COSATU comment by clause/section
- Clause 41, section 70A
Clause 41 inserted a new section 70A after section 69, titled “Rehabilitation and Reintegration”.
COSATU supported the insertion and pointed out that it correctly seeks to meet South Africa’s legal and constitutional obligations to ensure the rights of workers to rehabilitation and to return to work when ready as outlined under the International Labour Organisation’s Conventions, United Nation’s Conventions, South Africa’s Constitution and Integrated National Disability Strategy.
However, COSATU was of the view that there are certain features of drafting in this section which would, if enacted by Parliament, undermine the clear purpose of the amendment to provide for the right to rehabilitation in accordance with the Constitution and South Africa’s international obligations.
According to COSATU, as presently drafted, section 70A:
- Gives the CF and its licensees a discretion to provide rehabilitation rather than imposing an obligation on them to do so;
- Subsection (1)(c) restricts the concept of rehabilitation to an employee returning to his/her previous employment; and
- Subsection 2(b) can be interpreted as restricting the purpose of rehabilitation to providing for the employee to return to work as an employee rather than enabling an employed person to be rehabilitated so as to perform work either as an employee, an independent contractor or self-employed person.
COSATU’s proposed amendments on Rehabilitation
COSATU proposed the following amendments to the text of the proposed section 70A:
“Compensation Fund to provide rehabilitation
70A. (1) subject to the provisions of this Act, the Compensation Fund, employer individually liable or licensee as the case may be, [may] must provide facilities, services and benefits aimed at rehabilitating employees suffering from occupational injuries or diseases to return to [their] work or to reduce any disability resulting from their injuries or diseases.
- Clause 16, section 30
COSATU raised the following concerns regarding proposed amendment to section 30:
- Workers’ compensation is a unique form of insurance in that employees are prevented from bringing civil claims of any form against their employers by section 35 of the Act.
- The prospect will now arise that a wide range of organisations, including insurance companies, will apply for licences to insure employers in particular sectors of the economy.
- The experience of many workers is that insurance companies reject claims wherever possible, often on technicalities. Such an approach is incompatible with the administration of workers’ compensation which is a remedial scheme.
- Section 30(7) states that a licensee shall be accountable to the Minister but it does not say how the operation of a licence will be supervised to ensure workers receive compensation and claims are not inappropriately rejected.
COSATU’s proposed amendments on Licensing
COSATU proposed the following amendments to the proposed section 30(7):
“(7) Any licensee issued with a licence in terms of this Act shall:
- be accountable to the Minister[.];
- be under the control of a boards consisting half of members representing organised labour and half of members representing business;
- comply with any conditions determined by the Minister or as may be prescribed; and
- conduct their business transparently and in a manner that gives full effect to the rights of employees and their dependants under this Act.”
Solidarity presented as follows:
COIDA must be interpreted in such a manner that promotes the spirit, purport and objects of the social security right as enshrined in section 27(1)(c) of the Constitution. Further, one of the principles to be kept in mind when considering compensatory laws is ease of understanding.
Clause by clause comments
- Section 1(a)
Solidarity opposed the removal of the word “accident” and substitution with “incident or occurrence” because no COIDA specific definition of “incident” or “occurrence” has been included in the COID Amendment Bill, which leaves one with the definition of “incident” in section1(1) of the Occupational Health and Safety Act (OHSA) read together with section 24 of OHSA, that requires an “incident” only to be reported in very specific circumstances that differs significantly from the requirements for reporting in COIDA.
Amendment to read as follows:
“an accident arising out of or in the course of an employee’s employment and resulting in a personal injury, illness or the death of the employee and includes a recurrence, relapse or aggravation”.
Solidarity also proposed that a presumption be included in COIDA that if a person was injured/ died in the course of employment, it is presumed to arise out of employment and vice versa unless the contrary is proven.
- Clause 12, section 22 of the principal Act
No amendment has been proposed to subsection (2) of section 22, but Solidarity proposed that payment in respect of temporary total disablement be made from day one. Currently it is excluded from compensation unless the injury result in temporary disablement of four days and more. It is also misinterpreted as it does not necessarily refer to the first four days. However, that is how some employers interpret and apply it. It is unacceptable that employees have to sacrifice up to and inclusive of three days of their limited number of allocated sick leave for an injury on duty. Currently, if an employee does not have any sick leave available, he has to take unpaid leave.
- Clause 12(c), section 22
Solidarity supports the proposed amendment of section 22(5), but would prefer “the conveyance of an employee” to be described fully. Solidarity was of the view that travelling from the place of work to home after a shift has ended, should be included as an “accident: in terms of the Act, because section 22(4) of the principal Act determines that actions taken “for the purpose of or in the interests of or in connection with the business of his employer” shall be considered to be on duty.
- Clause 15, section 26
Solidarity was of the view that this section places an employee under an obligation to divulge confidential health conditions to employers to which an employer is not entitled, for instance, is it correct to expert an employee to divulge an illness such as HIV/AIDS when an occupational injury is sustained or an occupational disease contracted. HIV/AIDS may influence medical treatment as well as rehabilitation protocols.
- Clause 16, section 26
Solidarity was against the demutualisation of the mutual associations because it will not be in the interest of employees if compensation is paid by an ordinary insurance company that is primarily aimed at making a profit. However, should demutualisation proceed, strict terms and conditions should be prescribed by law in the Act itself.
- Clause 30, section 49(b)(5)
Solidarity strongly opposed this amendment as it may lead to the reassessment of permanent disablement that may be detrimental to pensioners. It is unclear as to the necessity of this section in light of the right to review claims that is already provided for in terms of section 90 of the principal Act.
Summary of oral submissions made on 28 April 2021
Below is the summary of oral submissions made on 28 April 2021 in the order in which they were presented.
Relay Emergency Medical Services (REMS)
The presentation by Relay Emergency Medical Services (REMS) was divided into two parts, namely informing the Committee about the services they render and the conditions under which they work as well as comment on the COID amendment Bill.
Services rendered by REMS
REMS informed the Committee, through pictures and video clips of the nature of their work and the conditions under which they render emergency medical services. Their emphasis was on being always prepared since emergencies happen any time. They also identified the scarcity of resources as a major challenge in their day to day work.
They showed a picture where they had to attend to farm workers who were involved in motor vehicle accident that overturned. They emphasised the cooperation between them and the Emergency Medical Services of the Eastern Cape Provincial Department of Health as vital for the success of that operation, even though some workers sustained serious injuries.
They also showed the evacuation of the worker who was injured while working with horses in the horse stable. The emphasis was the availability or non-availability of suitable vehicles for rural roads.
Another picture showed the transportation of a patient that tested positive to COVID-19, which they have to transport over 300km distance to get to the provincial hospital. The condition of the patient deteriorated along the way and they were running short of oxygen, which the patient needed on a continuous basis.
Members of the Committee were also shown a picture where the worker was rescued from a collapsed trench, where specialised skills were needed.
A video was also shown of REMS paramedics demonstrating to the construction workers on working on heights.
REMS pleaded to the members of the Committee for resources such as human resources and vehicles to be used as ambulances as they don’t have enough of them.
Comments on the COID Amendment Bill
REMS paramedics were concerned about the reluctance of some doctors especially in the private hospitals, to treat injury on duty patients. However, they pointed out that this does not happen in public hospitals. The public hospitals are over-crowded and under-staffed and taking injury on duty patients to them add to the already over-burdened system.
REMS pleaded with the members of the Committee to remove clause 43(4), which seeks to amend section 73 of the principal Act, from the Bill in the interest of injured workers.
Hospital Association of South Africa (HASA)
Hospital Association of South Africa (HASA) is an association that was established to represent the private hospital sector in appropriate forums and to serve the interests of its members which are drawn from this sector. HASA is composed of the following members in the private hospital sector:
- Life Healthcare
- The National Hospital Network
- Other independent hospitals and hospital groups, including the Wisani Medical Centre in Ga-Rankuwa and Joint Medical Holdings
HASA members comprise approximately 80 percent of acute hospital beds in South Africa distributed across all nine provinces, giving them a truly national footprint. HASA members also contribute significantly to the South African economy. In the 2016/17 financial year, private hospitals contributed R55.5 billion to the economy, equivalent to 1.3 percent of GDP
and supported 248 504 jobs throughout the economy, equivalent to 1.57 percent of national employment.
HASA’s presentation focused on the following aspects of the COID amendment Bill: prohibition on the cessation of claims by healthcare practitioners; inclusion of domestic workers into the ambit of COIDA; inclusion of compensation for rehabilitation and definition of “Medical Associations”.
·Clause 43(4), which seeks to amend section 73 of the principal Act.
The effect of clause 43 of the COID amendment Bill is to prohibit third parties (namely claims administrators and service providers) from taking cessation of medical service providers’ claims. HASA was opposed to this clause on the following basis:
- CF has a long history of inefficient administration in so far as processing and paying claims to, amongst others, medical service providers.
- Historical administration inefficiencies within the CF are what gave rise to the third party intermediaries whose services ensure that medical service providers:
- Do not have to have the specialised knowledge required to ensure reimbursement from the CF;
- Do not have to wait inordinate lengths of time for the CF to reimburse them for services rendered; and
- Can focus on the clinical management of IOD patients.
- Medical service providers make use of claims administrators and service providers, not only in respect of their CF work, but their work with medical aid patients too.
- Claims administrators and service providers play a significant role in ensuring debt collection.
According to HASA, the consequences of these amendments include:
- Threatens the provision of medical services to COIDA patients at private sector hospitals and therefore their access to healthcare services as guaranteed in the Constitution and will adversely impact revenue streams of private sector hospitals.
- In the absence of claims administrators and service providers, medical service providers will increasingly refuse to treat COIDA patients.
- This work will be pushed to the already overburdened public sector.
- This will detrimentally impact the patient’s health, recovery and future wellbeing, which will negate what is essentially the primary purpose of COIDA.
- The removal of claims administrators and service providers from the claims process will constitute a retrospective measure on the rights of COIDA patients to access health care services as guaranteed in section 27(1) of the Constitution.
HASA was of the view that if clause 43(4) is to be implemented, the CF would need to ensure that additional (ongoing) support structures are put in place to ensure that medical services providers are adequately trained and skilled to deal with the claims process.
HASA commented on the Socio-Economic Impact Assessment as follows:
- The SEIA for COIDA version May 2015 issued by the Department of Planning, Monitoring and Evaluation does not set out the full impact of this assessment.
- There appears to have been no consultation or consideration of the private healthcare sector when conducting the SEIAS activities. This is a significant oversight as medical service providers will be required to shoulder the burden associated with processing CF claims, should claims administrators and service providers be removed from the claims process.
HASA was of the view that the CF and the DEL had not provided cogent substantiation of the rationale for introducing the amendment contemplated in clause 43(4) of the COIDA Bill.
Furthermore, HASA was of the view that amendments contained in clause 43 of the COID amendment Bill are unconstitutional as they are irrational and therefore conflict with the principles of legality.
Therefore, HASA felt that DEL should focus on fixing what doesn’t work instead of eliminating what works.
HASA commented on inclusion of domestic workers as follows:
HASA welcomed this proposed amendment. However, they raised the following concerns:
- There are no transitional provisions contained in the COID amendment Bill that would lend support to ensuring that domestic workers are from that date of their inclusion in the CIODA, able to access adequate healthcare services for occupational injuries and diseases under COIDA. This could threaten the very rationality of this amendment.
- In order to ensure that this amendment is capable of realising its purpose, the CF will need to ensure that before this amendment takes effect, both employers and domestic workers are equipped and knowledgeable on how to comply with the requirements under COIDA.
- A positive obligation needs to be placed on the Commissioner to put in place measures to reduce existing backlogs in claims.
- HASA was of the view that it would be irrational and therefore contrary to the principles of legality to allow the amendment that brings workers within the scope of COIDA to take effect in the absence of educational campaigns and programmes; registration drives; guidelines on registration process and resource call centre.
HASA commented on the inclusion of compensation for rehabilitation into the ambit of COIDA as follows:
- It would appear that there is going to be some level of claims processing in relation to rehabilitation. It would be irrational to introduce a new category in respect of which claims can be made under COIDA (rehabilitation) into the ambit of COIDA, which would in effect further exacerbate backlogs and delay payment periods for claims, without simultaneously imposing a positive obligation to the Commissioner to put in place effective measures to reduce existing backlogs.
HASA commented on the definition of “Medical Associations” as follows:
- The term “Medical Associations” has not been defined in the COID amendment bill, and as such, its meaning remains unclear. Importantly it remains unclear if these “Medical Associations” will include hospital groups. This is of particular importance to HASA and its members, who respectfully submitted that hospital groups should have a right to be consulted directly with respect to medical aid tariffs, particularly with respect to private sector patients.
- Accordingly, HASA submitted that it be clarified, by way of definition, if the term “Medical Associations” extends to and include hospital groups (in addition to doctor groups and allied groups) within its ambit. Alternatively, HASA requested that the provisions of section 76 and 79 of the COIDA be extended to private hospital groups, and in particular that private hospital groups be conferred rights to be consulted directly for purposes of determining tariff fees for medical aid.
Richard Spoor Incorporated
Richard Spoor Incorporated (RSI) is a public interest law firm that focuses on industrial human rights law, e.g. occupational health and safety and related compensation aspects. RSI is well- known for its work in obtaining compensation on behalf of sick gold miners with silicosis (pneumoconiosis) in the largest class action in the history of South Africa. The firm specialises in COIDA, ODMWA, MHSA, OHSA and related common law aspects.
The firm frequently represents clients on a pro bono basis.
The focus of oral submission of the firm was on four points, namely:
- Clause 60, proposing amendment to section 97(k) of the principal Act.
This clause will enable the Minister to make regulations for the determination on calculations of permanent disability.
- Clause 16, proposing amendment to section 30 of the principal Act.
This will commit private insurers to provide workmen’s compensation insurance thereby extend the field from two associations who are currently licensed namely Rand Mutual Association (RMA) and Federated Employers Mutual (FRM).
- Clause 58, proposed amendment to section 91(f) of the principal Act This clause deals with legal costs in objections and appeals.
- Clause 1, amending section 1 of the principal Act
This clause deals with the revised definition of dependants, which exclude children over the age of 25. This will exclude disabled children over the age of 25 who are unable to work and are wholly dependent and will remain dependant on their parents for life.
RSI submitted that it will be unfair and unreasonable to exclude this category of dependants.
RSI submission on a broader context
COIDA faces a number of challenges, including:
- Inordinate delay in payment of claims.
- Wide spread under compensation where workers receive less than what they are entitled to under the Act.
- Claims being refused, more so occupational diseases claims.
- Unfair compensation scheme specifically as it relates to manual workers.
- Exclusion of workers and trade unions from the claims process. It is the employer who lodges the claim and submit evidence in support of the claim. In many instances workers have no insight into what is being submitted. A way has to be found for workers to participate fully in the claims process.
- A compensation scheme is supposed to incentivise employers to improve health and safety in the workplace. The premiums employers contribute towards the Fund should be linked to risks in the workplace. Employers with unsafe workplaces and those with bad health and safety records should be contributing more towards the Fund. To reduce the premiums, they should improve the health and safety record in the workplace. Currently good employers are subsidising bad employers. There is no sufficient correlation between the premiums and the risks that is being paid for.
Issues raised by RSI
- Regulated assessment of permanent disability
The Minister may make regulations regarding the assessment and the way permanent disability is determined.
Permanent disability is already regulated broader by the Act. Schedule 2 of the Act which stipulates the degree of permanent disability associated with each type of injury (Meat Chart).
It compensates workers for impairment, not disability. It contains provisions like the loss of two limbs equals 100% disability. The loss of a hand at the wrist equals 50% disability. Loss of one eye equals 30% disability.
The problem with the “meat chart” is that:
- It does not correlate between actual disability and the injury itself.
- The compensation framework discriminates unfairly against unskilled workers.
- Circular 171, which deals with Noise Induced Hearing Loss (NIHL) provides that a base line assessment of hearing be conducted when a worker starts employment. This test is not accurate and it does not take into account the hearing loss the worker might
have incurred before starting employment. This base line test was introduced in 2002 and does not compensate for hearing loss incurred before that date.
RSI submitted as follows:
- There must be guidelines when it comes to determination of disability and compensation. Impairment must not be equated to disability. Workers can be equally impaired but not equally disabled. The current system does not take disability into account but focuses mainly on impairment, which is discriminating against unskilled work. RSI does not believe that people should be partially compensated under the scheme.
Workers Compensation Assistance (WCA)
Workers Compensation Assistance was established in 2002 and employs 30 staff members. It assists 1000 employers and their workforce of 500 000 with COIDA administration and compliance.
WCA categorised its general comments on proposed amendments into two, namely positive and negative comments:
- Enfolds domestic workers in private households
- Modernises the principal Act
- Restores the role of the Compensation Commissioner
- Emphasise rehabilitation/ reintegration
- Simplifies and improves the no-fault principle
- Brings the Act in line with the prevailing law Negative
- Misses the opportunity to clarify “employer” vs “exempted employer” vs “employer individually liable” (cf s44 Prescription)
- Introduces some items of deep concern (dealt with individually below) mainly in areas of:
- institutional capacity and
- Typographical/ grammatical errors
WCA ranked its items of concern in order of seriousness as follows:
- Clause19 (which amends section 39 of the principal Act)
- “(6) an employer who fails to comply with subsection 1 shall be liable to a penalty of 10% of the declared annual earnings
- Clause 51(a) (amends section 83)
- “(5) if the earnings actually paid by an employer in respect of a particular period differ from the current estimated earnings shown
- Clause 20(c) (amends s40)
- Issue: this and all penalties should be stated as a maximum
- Clause 16(b) (amends s30)
- [Mutual associations] License to carry out Business of Compensation Fund
- Clause 43 (amends s73)
- (4) cession or relinquishment of medical claim void
- Clause 41(b) (adds s 70A)
- 70A the Compensation Fund may provide facilities, services and benefits aimed at rehabilitating employees suffering from occupational injuries
- Clause 52(b) (amends s85)
- (3) if the employer is participating in the rehabilitation of employees as prescribed, the Commissioner may give such employer a rebate
- Clause 1(k) (amends s1)
- “employer individually liable” means an employer who in terms of section 84(1)(a) and (b) is exempt from paying assessments to the Compensation Fund
WCA expatiated on the items of concern listed above as follows:
- Clause 19
- 10% of declared earnings is typically seven times the annual assessment that an employer pays and cannot be sustained.
- The word “declared” should be replaced with the word “employee’s” because the employer “shall” be liable for the penalty it will result in destructive harm to most employers in RSA.
- CompEasy system prevents or delays reporting until/ unless all aspects of the accident/disease are known.
- Institutional impediments practically guarantee that employers will fail to report accidents.
- The CF processes should recognise the capacity of employers to institute claims on their own behalf.
- Clause 51(a)
- The section must apply to all earnings incorrectly shown, not only to earnings “currently estimated”.
- No limitation should be imposed to the Commissioner’s right to correct an assessment to bring it in line with the actual earnings.
- Clause 20(c)
- All penalties should be stated as a maximum. The proposed wording is: “An employer who fails to comply with the provisions of this section shall be liable for a penalty not exceeding the full value of the compensation payable plus interest.”
- Clause 16(b)
- A regulatory framework is required to outline bases and criteria for awarding licenses (including existing licenses); arbitration of disputes against awards and similar issues; sight to be kept on the objectives of the amendment; and risk of “capture”.
- Clause 43(4)
- WCA objects to this clause on the basis of its unlawfulness.
- Impracticality for employers, employees and the CF: Currently employees do not easily obtain medical services of their choice due to admin burden on providers who treat COIDA patients; If providers cannot choose how to recover their COIDA fees, employers and their injured employees may have even greater difficulty obtaining medical services; and ultimately, employees may be treated in public facilities or their medical aids will pay. The CF may find it near impossible to obtain medical reports and claims will languish unresolved.
- Clause 43(b): Rehabilitation benefits are inadequate/ poorly supported e.g. CF does not pay for the services of biokineticists and dieticians despite their interventions being crucial in rehabilitation and physiotherapists often struggle
to obtain payment for services. The CF must urgently review the regulatory framework for rehabilitation.
- Clause 52(b)
- To avoid uncertainty and abuse, strict guidelines are required for all aspects of section 85.
- Clause 1(k)
- An exemption to pay the CF is not the same as “individual liability”. It is therefore incorrect to group mutual associations and provincial departments together under the banner of employers “individually liable”.
- An anomaly was created by the Ministerial notice published 3 October 2014 which mandated the move of all class 3 (steel manufacturing) business to the Rand Mutual: although these employers have a theoretical right under s84(3) to move their registration to the CF, the notice prevents them from doing so; and by an interpretation of s84(3) such employers after they have moved back to the CF may never again be insured by a mutual association/ license.
Injured Workers Action Group (IWAG)
The presentation of Injured Workers Action Group (IWAG) focused on clause 43(4), the socio- economic impact assessment and constitutionality of the COID Amendment Bill.
IWAG presented on clause 43(4) as follows:
- Clause 43(4) of the COID amendment Bill prohibits medical services providers (MSPs) from ceding their claims for payment by the CF.
- This will result in third party administrators who assist the medical fraternity with administration and funding no longer being able to provide this service in the absence of financial and legal security.
- The result is that thousands of MSPs will lose their constitutional rights, be forced to do their own administration and to claim directly and individually against the CF. Without the support and benefits of third-party administrators and funding, MSPs may choose not to treat injury on duty (IOD) workers/ patients.
- The Minister, Director General, CF Commissioner and Chief Director (Labour Policy and Industrial Relations) have indicated that the objective of clause 43(4) is to remove the need to deal with third parties.
- However, they have never provided evidence-based, empirical, rational, justifiable reasons or benefits of doing so.
- The SEIA conducted on the Bill did not provide cogent reason for clause 43(4).
- The elimination of fraud and corruption between service providers, such as third party administrators and the CF is mentioned, but there is no evidence of, nor any prosecution of any pre-funding third party administrator.
- To the contrary, pre-funding third parties remove the opportunity for fraud, clean up claims and assist the CF with its efficiencies.
- Pre-funding third party administrators do not charge workers, or the CF. They assist MSPs, workers, employers and the CF.
IWAG presented on SEIA as follows:
- Cabinet requires a SEIA to be conducted for any piece of legislation.
- The COID amendment Bill is not fit for purpose.
- Written in 2015, it is six years out of date, was conducted under a different Minister and during the Zuma Presidency.
- It was written under the old Umehluko system which has since been replaced.
- It was conducted and written in just two months.
- It failed to interview or take into account the impact of the Bill on a single MSP.
- It failed to interview domestic workers.
- It failed to interview a single third party administrator, or the bank.
- It failed to provide any justification for clause 43(4).
IWAG presented on constitutionality of the bill as follows:
- Clause 43(4) violates at least three sections of the South African constitution, namely section 25 (the right to property), section 22 (the freedom of trade, occupation and profession) and section 34 (the right of access to the courts).
- MSPs exercise their rights to use the services of third party administrators and funders to assist their practices. This saves them and provides much needed cash flow to run their practices and provide medical treatment to injured workers. This right and choice
will be removed by clause 43(4) without consulting with them and for absolutely no benefit. The risks are high that MSPs will go out of business or cease treating injured workers and dealing with CF.
- Hundreds of thousands of compliant businesses and employers contribute in excess of R11 billion per annum to the CF. This is done to ensure that their workers enjoy the rights and benefits they are entitled to under COIDA.
- If MSPs stop treating injured workers due to clause 43(4), employers will be contributing to a Fund and benefit that workers can no longer make use of.
- Workers will be forced to turn to public health facilities, be delayed in treatment and only return to work (if at all) weeks or months later. This will be a human cost and an immense cost to our fragile economy.
3. General Observations
The Compensation for Occupational Injuries and Diseases Amendment Bill was received favourably by the majority of those who made oral presentations during the public hearings.
The inclusion of domestic workers in the definition of “employee” was welcomed by all parties that made oral submissions.
However, the following clause was rejected by most presenters:
- Clause 43(4), which proposed the amendment of section 73 by including subsection 4 that reads as follows:
“Any provision of any agreement existing at the commencement of this Act or concluded thereafter in terms of which a service provider cedes or purports to cede or relinquishes or purports to relinquish any right to medical claim in terms of this Act, shall be void.”
Most presenters based their opposition to this clause on the negative impact they foresee to the medical services providers, the claims administrators, injury on duty patients and the public health care system. They also expressed the view that some relevant stakeholders were not consulted when the Socio-Economic Impact Assessment of the Bill was conducted. They also expressed doubt on the capacity of the CF to process claims timeously.
Having considered the oral presentations, the Committee agreed that the inputs would definitely assist the Committee when deliberating on the proposed amendments to the Compensation for Occupational Injuries and Diseases Act.
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