<--- Back to contents

Chapter 6 - Labour Law

Compensation Fund

The Compensation Fund provides compensation for employees who get hurt at work, or sick from diseases contracted at work, or for death as a result of these injuries or diseases.

The Compensation Fund is covered by the Compensation for Occupational Injuries and Diseases Act (No 130 of 1993) (COIDA) and the Compensation for Occupational Injuries and Diseases Amendment Act (No 61 of 1997). The Compensation Commissioner is appointed to administer the Fund and approve claims of employees. Where an employee is entitled to receive compensation from the Compensation Fund, the Fund, and not the employer, will pay the employee.

Go to the Department of Labour website for more information on the Compensation Fund: www.labour.gov.za

When can a employee claim compensation?

• Employees can claim if they are injured in an accident 'in the course and scope of duty' (in other words, while they are doing their work).
  
• Employees can claim if they get a disease caused by the work (an occupational disease).
  
• If an employee dies from the accident or disease, their dependants can claim
  

Employees who are drivers or who have to be transported as part of their work may be involved in motor vehicle accidents while working. Motor vehicle accidents at work are covered by the Road Accident Fund Act. The accident must be reported to the Compensation Commissioner, and will follow the normal Compensation procedure, but the money will be paid by the Road Accident Fund.

See Motor Vehicle Accidents while working.

Who can claim compensation from the Fund?

Any person who is employed or being trained by an employer, and is injured or gets sick on or because of the job can claim compensation. The following employees cannot claim compensation from the Fund:

• domestic employees in private households
  
• members of the South African National Defence Force and South African Police Services (they have their own fund)
  
• outworkers to whom employers give articles to be made up or to wash or clean. Then they are not working under the control of the employer
  
• employees who work outside South Africa for longer than 12 months at a time, unless there is a special agreement with the Commissioner

The Act says an employer has to pay compensation to the injured employee for the first 3 months from the date of the occupational injury. Thereafter, the Compensation Fund will pay. The Compensation Fund will repay the employer for the money that was paid.

Who contributes to the Fund?

Employers pay into the Compensation Fund once a month. Employees do not pay anything to the Fund, so employers cannot deduct money from employees' wages for this. The following employers do not have to pay into the Fund:

• national and provincial state departments
  
• certain local authorities
  
• employers who are insured by a company other than the Compensation Fund. For example, those companies which are part of the Chamber of Mines are insured by Rand Mutual Association, and many employers in the construction industry are insured by Federated Employers Mutual Assurance.

These employers are still covered by the Act and claims are made to and decided by the Commissioner. The only difference is that the payouts are made by the insurance fund of the employer (not by the Compensation Fund).

When will the Fund not pay compensation?

• No payment is made for claims which are made more than 12 months after the accident or death, or more than 12 months after the disease is diagnosed.
  
• If an employee is off work for 3 days or less, this is not covered by the Compensation Fund. It may be covered by the employee's medical aid or sick fund.
  
• No payment is made if the employee's own misconduct caused the accident unless the employee was seriously disabled or died from the accident.
  
• There may be no payment if the employee unreasonably refuses to have medical treatment, for as long as the employee refuses.

Occupational diseases and injuries

Diseases

Occupational diseases are illnesses caused by substances or conditions that the employee was exposed to at the workplace. Schedule 3 of the Compensation for Occupational Injuries and Diseases Act sets out the working conditions and diseases caused by these conditions that are covered by the Compensation Fund. An employee can claim compensation if exposed to these working conditions and then getting the related disease. If a disease is not listed then employees can claim compensation only if they can prove that the disease was caused by conditions at work and not by some other factor. Medical evidence and reports will have to be submitted to the Commissioner. It may also take some time for a disease to become obvious and in such cases employees can claim compensation if they are no longer at a workplace so long as it falls within the time limits for lodging claims.

See Problem 20: Employees develop a work sickness.

The Commissioner will approve or reject the claim. Only if the Commissioner approves the claim, will you get compensation (for temporary or permanent disability) and your medical expenses will be paid. If the disease gets worse after a period of time, you can apply to have your compensation increased.

Injuries

Injuries covered by the Compensation Act are only those that occur as a result of or at work. Compensation is paid for temporary and permanent disabilities that lead to a loss of earnings.

Motor vehicle accidents while working

If a motor vehicle accident happens while an employee is doing their job, then they can get compensation from the Compensation Fund. But if they are injured in a motor vehicle accident caused by someone else's negligent or unlawful driving, even if this is on the job, they can also make a third party claim from the Road Accident Fund. The money received from the Compensation Fund will be taken off the third party payment. For example, if the Road Accident Fund agrees to pay damages of R15 000, but the Compensation Fund has already paid R10 000, then the employee will only get R5 000 damages from the Fund.

An employee cannot sue their employer for damages if they were injured on the job. But if the employer caused injury to an employee while they were NOT on the job, then the employee could sue him or her.

What types of compensation payment are made?

Compensation is paid for getting injured at work or for diseases caused by work. There are four main types of compensation payments. These are:

• for temporary disability (the employee eventually recovers from the injury or illness)
• for permanent disability (the employee never fully recovers)
• for death
• for medical expenses
• additional compensation

Compensation is always worked out as a percentage of the wage the worker was earning at the time the disease or injury is diagnosed. If the worker is unemployed by the time a disease is diagnosed the wage they would have been earning must be calculated.

The Compensation Fund does not pay for pain and suffering, only for loss of movement or use of your body.

Temporary disability

Temporary disability means the employee does eventually get better. If an employee is off work for 3 days or less, no compensation will be paid (the employee can claim sick leave from the employer). If the employee is off for more than 3 days, the employee gets compensation which also covers the first 3 days. Temporary disability can be total or partial:

• Total means the employee is unable to work for a while. The employee will get % (75%) of the normal monthly wage as compensation. The formula is:
  monthly wage x 75 ÷ 100, if the employee is paid monthly (for weekly paid employees, multiply the weekly wage by 4.3 to get the monthly wage)
• Partial means the employee can go to work, but on light duty for fewer hours. If the employee earns less doing the lighter work, he or she will get % of the difference between the normal and reduced monthly wage

For an occupational disease, use the wage at the time of the diagnosis and not at the time when the employee first got exposed to the disease. If the employee is now unemployed, use the wage that he or she would probably have earned if still employed. Compensation for temporary disability will be paid for up to 12 months. If the condition of the employee has not improved after 12 months, the Commissioner may agree to continue payments for up to 24 months. After 24 months the Commissioner may decide that the condition is permanent and grant compensation on the basis of permanent disability. The Commissioner also pays all medical accounts, including medicine for which accounts must be submitted.

See Problem 16: Employee does not get the correct amount of Compensation money.

Permanent disability

Permanent disability means that an employee never fully recovers from the injury or sickness. A permanent disability can completely prevent an employee from working, or it can just inconvenience an employee. Most serious is called 100% disability, and least serious is called 1% disability. A doctor must write a medical report about the disability. The Commissioner, with the help of a panel of doctors, works out the degree of disability. The degrees of disability are set out in Schedule 2 of the Compensation for Occupational Injuries and Diseases Act. Some examples are:

loss of two limbs	100%
total loss of sight	100%
loss of hearing in both ears	50%
loss of sight in one eye	30%
loss of one whole big toe	7%
loss of one other toe	1%

Compensation for permanent disability is paid either as a monthly pension or as a lump sum:

• if the injury is measured as more than 30%, the employee gets a pension
• if the injury is 30% or less, the employee gets a lump sum

The formula for the monthly pension is:

[monthly wage x (75 ÷ 100)] x (percentage disability ÷ 100)

This amount will be paid once a month for the rest of the worker's life.

• The formula for the lump sum is:

(monthly wage x 15) x (percentage disability ÷ 100)

This amount will be paid once only and there will be no further payments.

Death benefits

Compensation can be claimed by the widow or dependants if an employee dies as a result of a work-related accident or disease.

Claimants for death benefits must submit certified copies of the following documents:

• marriage certificate or proof that the couple lived as husband and wife
• birth certificates or baptismal certificates of children (for proof of children)
• the death certificate
• declaration by the widow/er (form WCL32)
• the employer's report of the accident or disease
• funeral accounts (form WCL46)
• a special Compensation form must be filled in, that details your income and property

Who can claim Compensation when an employee dies in the course and scope of duty?

• The widow/er:
  
  • Lump sum payment: 2 x monthly pension of employee (the pension is the amount the employee would have been paid if he/she had been 100% disabled)
    
  • monthly pension for life: 40% x monthly pension of employee, paid every month

• Each child under the age of 18 years (including illegitimate, adopted and step children) is entitled to:
  
  • 20% x monthly pension of employee, paid every monthly until the child is 18 years old
    
  • the pension can continue for longer if the child is mentally or physically handicapped

• Other dependants, if there is no widow/er or children (parents, sisters, brothers, half-sisters, etc.):
  
  • full dependants: get the same as the widow
    
  • partial dependants: get a lump sum that is worked out according to the degree of dependence

• The person who pays for the funeral expenses: gets paid expenses up to R6 970.

The total monthly pension per family cannot be more than the pension the deceased worker would have received if he/she was 100% disabled (i.e. 75% of the monthly wage).

Medical expenses

All the medical expenses of a worker will be paid for a maximum of two years from the date of the accident.

Additional compensation

If a employee is injured, dies or contracts an occupational disease because of the negligence of the employer, or a defect in machinery or equipment, the employee can get extra compensation for temporary or permanent disability. Any employee who is under 26 years old at the time of an injury or disease will get extra compensation.

An application for additional (increased) compensation must be made on a form W930 within 24 months of the injury, The Commissioner can extend the period if good reasons exist.

Steps to claim disability

1. The employee must inform the employer, supervisor or foreman of the accident, injury or disease verbally or in writing.
2. The employer must report the accident or disease to the Compensation Commission within 7 days for an injury and within 14 days after gaining knowledge of an alleged occupational disease. The employer must report it, even if they do not believe the injury or disease is work-related. If the employee is unemployed by the time a disease is diagnosed, the employee can send forms directly to the Commissioner.
3. Part of the form must be given to a doctor to complete, to check that the injury or disease falls under the Compensation Fund.
4. The doctor must send a First Medical Report (W.CL.4) detailing the disease or seriousness of the injury, and the likely period the employee will be off work. This must be done within 14 days of seeing the employee.
5. The employer must send the First Medical Report to the Commissioner
6. If the employer refuses to complete and send the form, the employee or a representative may send a form direct to the Commissioner. The Commissioner will instruct the employer to fill in the right form.
7. The doctor must also send Progress Medical Reports (W.CL.5) monthly while treatment is carried on. If the employee's condition has not improved after 24 months, the Commissioner may decide that the condition is permanent and grant compensation for permanent disability.
8. The doctor must send in a Final Medical Report, stating either that the employee is fit to return to work or that the employee is permanently disabled.
9. The doctor submits this form to the employer, who sends it to the Commissioner. Anyone else can send the medical reports to the Commissioner, as long as the claim number is on the form.
10. The employer sends in a Resumption Report (W.CL.6) to the Commissioner, when the employee starts work again or is discharged from hospital. The employer also fills in this form to claim back the compensation money the employer paid to the employee during the first 3 months he or she was off work.

How is the compensation money paid?

The compensation office waits until it has all the forms and only then does it pay.

See Problem 15: Long delay in paying compensation.

Temporary disability

The compensation office sends the money to the employer who gives it to the employee.

Permanent Disability

Lump sum -The money is paid to the employer. If an employee is no longer working for the same employer, they must leave details of their address with the employer.

Pension - This is paid out monthly for the rest of a person's life. The disabled employee can decide where the compensation office must send the pension, for example to a bank account. Pensions are always back-paid to the date of the accident.

If employers do not send in the forms or the claims takes long, employees must contact the nearest labour centre and report it.

Objections and appeals

• If an employee disagrees with the decision of the commissioner, he/she may lodge an objection to the decision within 90 days from the date he/she became aware of the decision,
  
• The objection must be done on form W929 and sent to the commissioner,
  
• The commissioner may call a formal hearing to review the decision at which hearing the employee can be represented by a legal representative, trade union official or family member.
  
• The employee can call evidence, including expert evidence.
  
• The commissioner, after the representations made will make a final decision.
  
• If still not satisfied the employee can take the decision of the commissioner on review to the High Court. It is advisable to seek legal assistance with the application.

See Problem 19: Employee’s compensation has been refused.