Compensation for Occupational Injuries and Diseases Amendment Bill: Department briefing with Deputy Minister

Meeting report

Opening remarks by the Chairperson

The Chairperson welcomed the Committee. She said the original purpose of this meeting was to engage with the Department of Employment and Labour (DEL) on its Annual Report, but they were not ready unfortunately. The Department will instead brief the Committee on the Compensation for Occupational Injuries and Diseases Amendment Bill (COIDA). She said that a notice will be circulated after communicating with the Department and the Ministry on when the Department will come and present its Annual Report. 

The Committee understands the importance of the COIDA amendments, as they understand the outcome of the court proceedings regarding domestic workers. It is important that the Committee is not seen as dragging its feet because everything the Committee does is for the benefit of ordinary people, and most of them are vulnerable.

Members would not deliberate on the Bill but only ask questions of clarity. The responses given by the Department will assist the Committee when listening to stakeholders and it will aid in deliberations when the Bill is finally analysed. She welcomed the Deputy Minister, the Department and everyone who joined in to observe proceedings. She handed over to the Deputy Minister of Employment and Labour, Ms Boitumelo Moloi, for opening remarks.  

Briefing by the Deputy Minister

The Deputy Minister said that that the Department had the opportunity to present the departmental synopsis on the third and fourth quarter reports to the Committee. This process was very enriching and she was sure Members would agree. She still believed that there was a need to pursue further engagements with other departments to find common ground on some of the outstanding issues that may need further engagement.

She said the Department had submitted two pieces of legislation to Parliament for consideration. These were the Employment Equity Amendment Bill (EEAB) and COIDA.  The Committee was briefed in a previous meeting on the EEAB and will then be briefed on COIDA in this meeting. As co-chairs of the Inter-Ministerial Committee, the Department, together with the Department of Home Affairs, have prioritised migration policy for the current financial year. The work done by the Inter-Ministerial Committee is promising and there will be something to report very soon on that specific piece of legislation. 

There is already a Constitutional Court judgement on the COIDA amendment compelling the Department to provide further formulisation on the domestic worker sector. The COIDA Bill is a very important document for the Department. Its amendments are also informed by consultative work done in 2014 through provincial imbizo’s in the domestic worker sector.  The Committee should note even though the Bill addresses the inclusion of domestic workers under the category of employees for purposes of benefits in terms of the Act, there are other significant amendments proposed by this Bill such as the Rehabilitation and Reintegration Framework of injured employees and those that have recovered from diseases back into the workplace. It also deals with inspections, compliance and enforcement related to criminal liability, administrative penalties, and benefit improvements. The Director General (DG) and the Commissioner of the Compensation Fund (CF) will take the Committee through the specific amendments proposed by this Bill and the processes that will follow.

She said the amendments seek to address the constitutional court judgment compelling the Department to formulise a domestic worker sector, something that was grossly overlooked by the previous administration, including the Apartheid government. Although it took the Committee and the Department a long to get to where they were with the Bill, they can be proud of how far it has come. She said that it would fix a significant disservice done to those who raised us into the grown men and women we were today. It was grossly overlooked and resulted in many lives lost in domestic workplaces.  The case in point was Mrs Mahlangu’s case that leads to the constitutional court ruling. She thanked the Mahlangu family and all those who stood on the side of the family in difficult times.

She handed over to Mr Thobile Lamati, Director-General, DEL, and Mr Vuyo Mafata, Compensation Fund Commissioner to lead the presentation.

Briefing on the Compensation for Occupational Injuries and Diseases Amendment Bill 

Mr Thembinkosi Mkalipi, Chief Director: Labour Relations, DEL, lead the presentation. He said that DM Moloi summarised all the important amendments the Bill was introducing. He took the Committee through the amendments:

Amendment of Section 1 (Definitions) not affected by the NEDLAC process

The Act expressly excludes domestic workers from the category of employees for purposes of benefits under the Act. To eliminate such discrimination, the Bill removes the express exclusion of domestic workers as employees. This is in conformity with international labour standards.

Technical amendments were made to the definition of “Financial year”, the words “mandator” and “contractor” would be replaced with “contractor and sub-contractor” and the definition of “serious and wilful misconduct” has been removed.

Composition of the Board

The Director-General is the chairperson of the Compensation Board and advises the Minister on issues of policy arising from the Act, amendment of the Act and the appointment of assessors. The Bill empowers the Minister to appoint 15 board members from the constituency of organised labour, organised business, and government.  The Board will have an independent non-voting chairperson.  The Board will advise the Minister on issues of policy from the Act, amendments of the Act and appointment of assessors.

Amendment of Chapter 3 (Finances)

The Director-General is the Accounting Authority. The Nedlac social partners agreed that the Director-General should remain the accounting authority for the Compensation Fund

Amendment of Section 22

Section 22 (3) (a) stipulates that if the accident is attributable to the serious and wilful misconduct of the employee, no compensation shall be payable unless (i) the accident results in severe disablement or (ii) the employee dies in consequence thereof, leaving a dependant wholly financially dependent on him/her .  Section 22 is amended to the effect that notwithstanding serious and wilful misconduct on the part of the employee, compensation will still be payable.

Amendment of Section 30

The Bill replaces the term “mutual association” with “licensee”. The reason for the use of “licensee” is to remove the monopoly enjoyed by Rand Mutual Assurance and the Federated Employers Mutual Assurance. Any legal person carrying on the business of Financial Services will be legible to apply for a license in terms of section 30.

Court jurisdiction in terms of the Act

The proposed amendments provide that the appropriate forum to deal with COIDA related disputes is the Labour Court.  Wherever ‘High Court’ occurs in the Act has been substituted for the ‘Labour Court’. 

Amendment of Section 39, 40, 47, 64, 68, 81, 82, and 83:

The Bill decriminalises Sections 39, 40, 47, 64 and 68, and provides for penalties for con-compliance and contravention.

Amendment of section 70: appointment of medical advisory panels

This section has been amended to broaden the scope of the medical advisory panel to include occupational injuries.

Amendment of Section 76: Fees for medical aid

The amendment seeks to expand the scope of consultation to include all health care organisations.

Amendment of Section 81 (2): Employer to keep records

This section has been amended to provide for five years for record keeping in line with the National Archives Act.

Amendment of Section 82(1): Employers to furnish return of earnings

The financial year has been aligned with Public Finance Management Act 1 1999.

Amendment of Section 84: Certain Employers Exempt from Assessment

In the event of an introduction of a new class or industry during the transitional period, the Director General may in concurrence with the Minister exempt certain employers from payment of assessment to the Compensation Fund in respect of their employees.

Amendment of Section 86(2): Assessments to be paid to the employers

The reference to the Exchequer Act has been removed and replaced by Prescribed Rate of Interests Act.

 Amendment of Section 90 (1): Review of decisions

The word “review” has been replaced with the word “variation” to avoid the confusion between the internal review process and the judicial review.

(More information can be found in the attached presentation)

Discussion

Mr M Bagraim (DA) welcomed the presentation. He said there is an opportunity to amend the legislation and it will eventually go to Parliament to be amended, so now would be a perfect time to restructure the entire system. He asked why the Department did not consider restructuring it since it has been completely dysfunctional for 20 years.

In terms of the legislation, it is taking away the right to claim from the system itself. For instance, if you are travelling to or from work and involved in an accident, the individual would then have to claim from the motor vehicle legislation. The motor vehicle fund is completely bankrupt so employees would be left ‘high and dry’ if they got injured on their way to or from work. He said he does not understand this concept.

He referred to Mrs Mahlangu’s case and said that the court ruled that she has a retrospective claim, yet the amended legislation does not make it retrospective. He asked the Department for clarity around this matter.

He asked what will happen when employers fail to report or refuse to report. ‘Will that be made a criminal offence’? He said employer negligence is another issue that needs to be looked at.

The presentation still names the DG as the Accounting Authority but there have been so many failed audits in the system, and it does not make sense that the DG would remain the accounting authority. He said he does not understand why the words “convicted’ and ‘imprisonment” are used although the amendment says that Section 39, 40, 47, 64, 68, 81, 82, and 83 will be decriminalised.

Dr M Cardo (DA) said the inclusion of domestic workers in the Act is welcome and long overdue. He asked if the Compensation Fund will be able to cope with another sectoral category of claims given the challenges it already faces with processing and paying claims using the dysfunctional Comp-Easy system. ‘Does the fund have enough administrative and technical ability to give effect to the amendments in this Bill’?

He asked if a proper socio-economic impact assessment of this Bill has been done since it will have serious financial and economic consequences. For example, it proposes a specialised inspectorate to enforce the funds laws and regulations, and that will come at a financial cost at a time where budgets are being cut. He asked how big the inspectorate will be and how feasible this new inspectorate is. ‘Why can’t its functions be performed by the existing inspectorate in the DEL’?

He asked the Department to explain the rationale behind the introduction of a draconian penalty regime contained in Section 19 as it proposes a fine on employers for late reporting of accidents that is equal to 10% of their entire wage bill for every accident reported late. He said the average employer in South Africa pays an average annual assessment premium of about 1.3% of their wage bill. If there were ten late reported accidents the said employer would have to pay a penalty equal to their entire wage bill. He said this seems very harsh and draconian and asked for clarity around this.

Ms K Mkhonto (EFF) welcomed the Bill as it is very impressive, and she applauded the Department for the inclusion of domestic workers in the Bill. She asked the DG to clarify why Section 73.4 is not included as the presented amendments say nothing regarding this section.  ‘Does it mean the Section will not form part of the amendments to be done or has it been set aside for another meeting’?

She also asked if there is any change in the Bill introduced in Parliament and presented before the Committee, stating that the DG or the Commissioner is the Accounting Officer.  She asked if there are any changes in the protocol for the chairperson of the board as he is a non-voting individual - to report to the Minister or to parliament.

She said the Minister always says that Bills are checked for their impact on the social economy. ‘Is it possible for injured workers who do not have permanent disabilities from their injuries to be given lump sums for these claims’? The DM spoke about rehabilitation and the reintroduction of workers to the workplace. ‘Why are people who qualify not given lump sums of their benefits instead of monthly payments’?

She said she did not understand what the strict monitoring tools of all the activities of the Compensation fund are. Looking at the activities of the Compensation fund it does not seem very efficient. She asked what can be done to improve and execute the desired duties.

Mr N Hinana (DA) welcomed the presentation. He asked Mr Mkalipi if the people who are affected by these amendments the domestic workers, miners etcetera were aware of what is being amended. When looking at all the sectors where most of the injuries are occurring, those people are supposed to know what is being amended and the benefit thereof. ‘How does the Department get to those individuals or constituencies that are being directly affected by these amendments’?

The amendment provides that both employer and employee must be registered with this Act but it is unclear if the people employed under the subcontract were aware. He asked who takes responsibility if the employee is injured. ‘Would it be the main contractor or the labour broker’? He asked if the Department has a public outreach programme to empower people and help them understand the steps being taken to help them.

Ms H Denner (FF+) welcomed the amendments as it was long overdue. She asked if the amendments will be done retrospectively as it was done in the judgement previously mentioned by Mr Bagraim.

She asked if there will be a grace period/implementation period for domestic employers to register and to apply for their domestic workers as was done with the Protection of Personal Information (POPI) legislation.

She asked how the Department will properly inform domestic employers about the amendments and their expanded responsibility in this regard.

Mr S Mdabe (ANC) welcomed the presentation as it is a very progressive amendment. He asked for clarity around the prohibition of sending claims of medical professionals to a third party in the cases of the third party representing the employer in facilitating and launching the case. ‘Would that still be permissible considering the number of challenges present in that system’?

He asked what can be done to reduce the cost, maximise the benefits and mitigate the risks associated with the legislation. ‘What impact will the amendments have on other national priorities’?

Responses

Mr Mkalipi responded to Mr Bagraim’s question saying that the restructuring of COIDA is not a legal issue. The restructuring in terms of the restructuring the organisation, can be done outside of the legislation. COIDA should be restructured to be fit for purpose that is a different issue to the law. If there is going to be restructuring in law, and it does not work, the law then needs to be amended to correct that restructuring. He said he is not arguing against the need to restructure but he does not believe restructuring an organisation through the law is good practice.

He said that employees who get injured in car accidents present two issues. There is already a law indicating how compensation is paid to people who got injured on a public road. ‘If payment is made from the fund to people who get injured this way, when will the payments stop’? ‘The COIDA compensates people who are injured at work. If it was going to compensate people injured in a taxi, why then not also compensate for people injured while walking to work’?  These issues become very difficult to manage. Secondly, it is to make sure that injured individuals do not double dip, claiming from both the Road Accident Fund and the COIDA.

He responded to the issue of domestic workers and the outcome of the Constitutional Court whether it will be backdated or not.  He said that the law presently does not deal with that, the Committee can look at how far the court can backdate and it is an issue that can be discussed by Parliament if deemed necessary. There are constitutional requirements needed to backdate any legislation as it is not normal to backdate legislation because you do not want to make innocent employers before the law comes into effect not innocent anymore. It is an issue that can be discussed when the Portfolio goes over the Bill clause by clause.

He said that if employers comply with the law they have no reason to fear the fines. If an employer does not comply with the law or does not report a case, they must remember that there is a worker behind that case who died and a family who is unable to claim from COIDA because the employer has not submitted a report. When looking at this issue, focus should not just be on the fact that the employer may not be able to afford the penalty. One should also look at the human factor. Members should look at how many family members are affected by the employer’s lack of reporting and how many families go to bed hungry because the fund is unable to process the claim. That is the issue that needs to be balanced. Employers have nothing to fear if they comply with the law.

He said that it is important to note that decriminalising the sections does not refer to all the sections in the law, only to certain sections.

He replied to Ms Mkhonto saying that after looking at the law the Department felt that Section 73.4 does not need to be amended. If the Member still believes an amendment is needed, now that the Bill is in Parliament, she can propose an amendment. The Department will then have to sit with the Committee and look at it and see what the consequences are of said amendments. The amendments brought before the Committee are the areas the Department believes needed to be amended. If there is anything the Department missed, Members can indicate or make whatever changes they deem necessary.  

He said that the DG, in terms of the Bill, is still the Accounting Officer. The Commissioner will answer the question around payment of lump sums and issues around monitoring tools. These issues do not fall within the law, issues of strengthening reinforcement and monitoring, would be better addressed by the Commissioner.

He replied to Mr Hinana saying that mine workers are represented by trade unions and all the legislation was debated and approved by NEDLAC constituencies. The legislation goes through a public hearing process where the public is called in and the law is explained to them, questions are answered, and clarity is given around all issues. That creates an opportunity for domestic workers and employers to come and hear about the changes being made. That is how the Department interacts with its stakeholders, through NEDLAC, public hearing processes and public commenting processes.

He said employees are not required according to this law to register. Registration is only required by the employers and they must declare their payroll annually.

He said that this is the only law that defines labour broking as part of the main employer.  This law holds the main employer responsible for injuries that take place in that workplace.

He said all legislation that goes to Parliament must go through an assessment. This legislation has gone through that assessment and Cabinet has accepted everything done as to its requirements. If Members believe the assessment is not up to standard then this was unfortunate because it was done to the requirements of Cabinet and those requirements have been met.

He said the Bill does not create new inspection processes; the same inspectors that are there will be enforcing this legislation. It just provides them with more power, more areas of operation and it regulates the administration.

He replied to Ms Denner saying that initiative should be taken to engage with employers now to prepare them to comply with the law. The Department should make sure that there is enough time between the Bill being passed by Parliament and the time the President accepts the Bill to the Act stage and when the President says it will be operational. All these issues should be worked out to ensure all employers are ready to comply. The fund is aware of the requirements needed and is considering the exemptions to certain classes in terms of these processes.  These issues do not necessary form part of the legislation, rather in the implementation process.

He said most of the people seeking third party claims from the fund are employers with issues of people not receiving the right amount of money and the mark-up of that money. The issues preventing third party claims go both ways, it does not differentiate.

Mr Thobile, Lamati, Director-General, Department of Employment and Labour (DEL), replied to Mr Bagraim’s question saying that the Minister is on record having indicated that the Department is in the process of restructuring the Compensation Fund and the Unemployment Insurance Fund (UIF). He has addressed the Committee and Parliament to this effect. As the new law is being introduced, the Department is simultaneously looking at ways to make the fund more effective.

He said that the Committee can make the decision regarding whether the DG remains the accounting authority or not. The Department will bring recommendations for the Bill to the Committee and it is up to the Committee to turn the recommendations into law.

He replied to Dr Cardo saying that the economic cost to the families, in terms of injuries, cannot be quantified. While the Department strives to create a balance to not put extra strains to the companies, but companies have a responsibility/duty of care. When they fail to exercise it, then surely there must be a penalty. There are systems in place to make sure there are no injuries, such as zero harm. If deterrents such as penalties are not put in place, then this battle will not be won. Fatalities will remain high. That is why these penalties are put in place and if companies comply there will be no need to pay said penalties.

He replied to the issue of labour brokers who take responsibility. He said that when reading his point, it should not be read in isolation to what happens in other pieces of legislation. The responsibility between the employers who procure services from labour brokers have been clarified in those pieces of legislation. There is a provision in the law that talks about deeming provisions and if those provisions are met then you are deemed an employee of the person who procured your services. So that employer is responsible for your health and safety according to the OHS Act. Equally, when it comes to the CF contributions, that employer must take responsibility for the injuries sustained on occupational diseases contracted by the employees.

The Committee will have its own processes of public comment and finding people to come in and all that and then there will be an advocacy session to bring all those affected by the legislation up to speed regarding the legislation.

Mr Vuyo Mafata, Compensation Fund Commissioner, said that the CF is a social security scheme that provides income replacement in an event of a workplace accident. If a person is injured and not physically disabled and can return to work, they do not qualify for further income replacement benefits from the point they are deemed to not be permanently disabled.

One of the provisions in the COIDA Bill is the return to work as well as a new clause that states it can reassess the disability of the person at any point during the lifespan of the claim. This enables the CF to make those decisions regarding the changes in the person’s disability, whether it gets worse or better, to insure the compensation is aligned to that.

The rehabilitation and reintegration provision that has been brought into the new law is to find a way to get these who have been permanently disabled, to reskill them and if so they do not qualify to continue receiving the income replacement. They are then assisted to be reintegrated back into the workforce. Lump sums will not be paid as the purpose of the fund is to pay income replacement over the life of the injured worker if the worker is unable to work.

The Chairperson thanked the Department and everyone who presented and for the responses. She requested that all responses be put in writing as this is going to be a very emotive and tedious process, and by the time the Committee comes to deliberate Members may have forgotten that certain questions have been asked and answered. She said she is preparing a file to remind Members to make the process of deliberation easier.

She said the Committee has a right to put changes forward when going through the principal Bill. The Committee will deliberate, the Department will respond, and the legal team will come in and advise accordingly. It is not cast in stone as the legislative arm of the State; it is the Committee’s responsibility and for now this is what Cabinet has put forward.

She said that it is also the Committee’s responsibility to ensure that people are empowered through the processes of this Bill. The first leg of this process is now done, and the second leg is to sit with the Secretariats and adverts will be circulated to the media in different languages, and people will be invited to come. There will still be companies who will dispute matters and all this needs to be done to ensure people are empowered. The DG is correct that the advocacy process is their responsibility but for now the Committee’s role when doing constituency work is to ensure what happens.

She said it will not be easy to follow up because employers have always had their own way but as an activist, she believes it is important to empower workers. Workers can now defend their rights, but as much as they have rights, they also have responsibilities. There cannot be a work environment where employers do what they want and are not being challenged. There is an area that workers through their representatives are being empowered to understand, it cannot be a one man show. As much as the Committee must ensure things go well, the workers also need to be empowered.

She said workers will report employers and the Department for not doing what is required of them. In certain cases, they may even blame the Committee for not representing them. At the end of the day the Committee needs to ensure that the workplace environment is conducive for workers to work and to be empowered.  These pieces of legislation and processes have exposed class contradictions in the country. One worker represents 10 people the household. There are many things that need to be looked at in terms of transformation. When the Committee engages in deliberations, as much as the Members differ in political views and parties, they must remember that it is all about the people the Committee represents. She asked Members to put anything that may have been overlooked in writing to be sent through the Secretary.

The meeting was adjourned.