Every year you religiously pay your assessment for Workmen’s Compensation, which is based on the total annual earnings of all of your employees.  But are you aware what you are paying for?
COIDA, which replaced the Workmen’s Compensation Act in 1993, covers employees involved in occupational accidents, or who contract occupational diseases.  The rates payable are fixed according to the class of industry in which the employer is engaged, the principle being that each industry must produce sufficient revenue to meet the costs of accidents during the year of assessment and such costs of administration that may be incurred.  This ensures that each class and subclass bears its own costs of accidents, and each of the 23 classes is, in effect, a mutual insurance association of employers in that class. 

The rates are reviewed annually, and are increased or reduced depending on the frequency and severity of accidents in each class of business.  It is therefore in the interest of all employers to take an active interest in the prevention of accidents, and to enlist the co-operation of their employees.

The electrical contracting industry falls under Class V – 0500, and the rates payable to the fund in 2006/07 amount to 2,24% of your total employees’ earnings.  Earnings include wages, overtime of a regular nature, commission, leave bonus, any other bonuses, etc.  This assessment is payable by the employer, and no part thereof may be recovered from the earnings of employees.

The maximum amount of earnings on which an employer’s assessment may be calculated is R189 840 a year, and this limitation is adjusted annually each year by a notice in the Government Gazette.

All occupational injuries or alleged occupational injuries that entail medical expenses and/or absence from work for more than three days must be reported in the manner prescribed in the act.  Any delay in reporting an accident or alleged accident is a criminal offence, and the Compensation Commissioner may also impose a penalty on the employer which could be the full amount of the claim.

COIDA provides a system of “no fault” compensation for employees who are injured or killed in accidents that arise out of and in the course of their employment, or who contract occupational diseases.  Employees are entitled to compensation irrespective of whether or not their injury or illness was caused by the fault of their employer or a third person.  However, if the accident or disease is due to the negligence of the employer, the employee may apply for increased compensation in addition to the compensation normally payable. 

The act specifically exempts employers from liability for injuries incurred or diseases contracted by employees in the course of their employment, so they cannot institute damages claims against their employers.  However, if you are not registered with the fund and an employee is injured or killed while at work, you would not be indemnified against such an action and could be faced with an expensive civil claim.

An employee who is injured on duty is entitled to compensation in respect of temporary total disablement, permanent disablement (according to the degree of disablement), and death.  Reasonable medical expenses arising out of an injury on duty are payable for two years, or longer if further medical treatment will reduce the extent of the disablement.

In terms of the act the employer is required to pay the injured employee compensation amounting to 75% of his normal wages during the period of incapacity, up to a maximum of three months.  Such compensation is repaid to the employer, and all medical costs are paid directly by the fund to the hospital, doctors, etc., subject to the accident/disease being reported in the proper manner.
An employee who contracts an occupational disease after being exposed to specified work processes (listed in the act) is entitled to compensation, unless it is proved that the disease was not contracted at work. Employees have to prove that the disease is work related in order to qualify for compensation.

Recently there was an article in the press in which it stated that there were over 100 000 unopened envelopes sitting in the commissioner’s offices in Pretoria still awaiting attention.  So, if you are still awaiting refunds of compensation paid to your employees, the application is possibly still waiting to be attended to.

To avoid this problem, and to ensure that all applications submitted by your firm are dealt with promptly and professionally, it is recommended that you should register, or change your registration, with Workmen’s Compensation, to the Federated Employers’ Mutual Assurance Company (FEM) which is licensed by the Minister of Labour as an “agent” of the fund.  My experience is that FEM provides every assistance to members when one of their employees has been injured or killed on duty, as they “walk” the employer through the whole process to ensure that compensation is paid as promptly as possible and that employees receive their payments without undue delays.

Should you require any further information in this regard please contact the FEM offices in:

• Johannesburg (011 359 4300),
• Pretoria (012 440 1824),
• Durban (031 304 8958), or
• Cape Town (021 418 3210).

Contact Chris Greager, ECA(SA), Tel 031 312-6313,
ecakzn@iafrica.com