The COID Dilemma

Can an unpaid learner practically claim workmen’s compensation?

We are often faced with interesting practical challenges. One such challenge surfaced recently (and is likely to become more common as the government pushes for increased employment through learnerships and work experience programmes).

Background
A company offered a work experience programme where they paid for students travel in order for the students to come to their premises and learn more about the trade. In the course of this work experience one of the learners was injured and the company tried to claim compensation from the Compensation Commissioner, but faced some real challenges.

Challenges
The challenge came in three parts:

  1. Is the learner entitled to claim? Where there is a contract of service the learner should be entitled to claim compensation under the Act.
  2. Is the learner able to claim? As the learner is not being paid any salary often companies will not put the learners on to payroll. Where the learner is not on payroll the employer is usually unable to show the Compensation Commissioner that the learner is employed and levies have been paid on their behalf. It is unusual for an employer to think far enough ahead and include unpaid learners (not on payroll) on their annual return of earnings.
  3. What can the learner claim? Even if the employer has included the learners on their return of earnings or can show evidence of them being part of their headcount the first question the Compensation Commissioner will ask is to see their payslip and proof of earnings to support the claim calculation. Where they have not been paid anything, the claim is zero.

This leads to a very inequitable position where the learner should be able to claim, but the claim is worthless.

What to do?

There is no easy answer to this. In a perfect world the legislation would take this into consideration. The only alternatives are civil i.e.

  • Protect the company from any claims for compensation by getting learners to sign an indemnity form; and
  • Where the company is interested in looking after learners, consider general insurance products to cover the learner in the event of an incident at work

We are currently putting such examples to the Payroll Authors Group and other influential stakeholders in an attempt to get some clarity on the law in this regard and more importantly the practical application of the law. Unless there is a process that can be successfully followed to resolve a valid claim this would unfortunately remain a loose end that prejudices those people who need the benefits and cover the most.

Compensation Fund Annual Return fo Earnings – Deadline 31 May 2018

The W.As. 8 can be filed online (CF-Filing) on the Compensation Fund website, up until the revised deadline of the 31 May 2018.

The fund will immediately calculate the assessment amount and issue an invoice to the employer online. This can be paid and as soon as payment is received the Fund will issue the employer with a Letter of Good Standing (LOGS).

The Compensation Fund is running a number of workshops towards the end of May to help employers with the CF-Filing system.

Editor’s Note: Apparently employers new to the Compensation Fund can now register online (but we have not tested this yet).

COIDA – Maximum Earnings Increase

The maximum amount of earnings for which COIDA applies has been increased to R430,944 effective 1 March 2018. It is noticeable that this is from 1 March 2018 (the start of the tax year) as opposed to the usual 1 April 2018 which makes things easier practically for employers.

What form of leave – IOD for less than 3 days?

If an employee has an IOD for only 3 days, what form of leave should be recorded?

Section 24 of the Basic Conditions of Employment Act states that sick leave does “not apply to an inability to work caused by an accident or occupational disease”. However, Section 24 goes further to state that the above mentioned applies to all cases of sick leave except for cases where “no compensation is payable in terms of the COID and the Occupational Disease in Mines and Works Acts”.

The COID act stipulates payment rates for leave periods that are four days and beyond but does not stipulate payment rates to be paid when employees are placed on leave due to an IOD for a period of three days or less. Section 22 (2) of the COID act further states that “no periodical payments shall be made in respect to temporary total disablement or temporary partial disablement which lasts for three days or less”.

The sum of the above is that because no compensation is set out in the COID Act, leave taken due to an IOD for a period of less than three days should to be taken as sick leave.

COID Maximum Earnings Increase

The Department of Labour published Government Gazette notice no. 1577 on 29 November 2016 in respect of an increase in the maximum amount of earnings. The effective date is 1 April 2017. The prescribed amount under Section 83(8) of the Compensation for Occupational Injuries and Diseases Act No 130 of 1993 (COIDA) has been increased to R403 500 from R377 097 per annum.

Compensation for Occupational Injury & Disease Return of Earnings 2017

On or before the 30th April 2017 you are required to submit your Return of Earnings (ROE) submission to the Department of Labour, this is legislated under the: COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES ACT (NO. 30 OF 1993). Each registered business must submit a separate return.

This Act replaces the Workmen’s Compensation Act and provides for compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment, and for death resulting from injuries and diseases. The benefits are paid from the Compensation Fund, which gets its money from compulsory contributions, paid by employers. All employers carrying out business within the Republic of South Africa are required to register.

If you have not requested this service from us in the past and require us to complete and submit this return on your behalf, please contact us on [email protected]. If we have submitted for you in the past then we will complete your return and send you the figures before submission. The cost for this service is R702.00 per return (excl. VAT).

Please note the following important issues:

  • Permanent, temporary and casual employees are to be included in this return.
  • You are required to report on the earnings to a maximum of R377,097.00 per employee per annum, for the tax year March 2016 to Feb 2017.
  • You are also required to make an estimation of the remuneration and number of employees monthly for the next tax year that will begin shortly. This enables the Commissioner to budget for the following year, and to fix the new Occupational Injuries and Diseases (OID) limit. The prescribed amount in terms of section 83(8) of the Compensation for Occupational Injuries and Diseases Act, 1983 has increased from R377,097 to R403,500 per annum with effect from 1 April 2017.
  • With effect from 1 April 2013, there will be no assessment revisions entertained as a result of the fault of the employer.
  • In the event more than one return is furnished for the same assessment period, the first return submitted will be accepted as the final one.
  • Criminal proceedings will be instituted for misrepresentation of facts.

COIDA Return of Earnings Submission 2016

On or before the 30th April 2016 you are required to submit the Return of Earnings (ROE) submission to the Department of Labour, this is legislated under the: COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES ACT (NO. 30 OF 1993). Each registered business must submit a separate return.

This Act replaces the Workmen’s Compensation Act and provides for compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment, and for death resulting from injuries and diseases. The benefits are paid from the Compensation Fund, which gets its money from compulsory contributions, paid by employers. All employers carrying out business within the Republic of South Africa are required to register. If you require more information regarding this Act, please contact us at [email protected].

Permanent, temporary and casual employees are to be included in this return. If you have casual or temporary employees that you do not put on your payroll and we do not have records for, please send this information to us so they can be included along with your payroll information for the year. The directors or members are to be reflected separately on the report – if they are not paid via the payroll, please advise Kacey of this information.

Note: We are required to report on the earnings to a maximum of R355,752.00 per employee per annum, for the tax year March 2015 to Feb 2016.

You are also required to make an estimation of the remuneration and number of employees monthly for the next tax year that will begin shortly. This enables the Commissioner to budget for the following year, and to fix the new Occupational Injuries and Diseases (OID) limit. The prescribed amount in terms of section 83(8) of the Compensation for Occupational Injuries and Diseases Act, 1983 has increased from R355,752 to R377,097 per annum with effect from 1 April 2016.

If you have not requested this service from us in the past and require us to complete and submit this return on your behalf, please contact us on [email protected]. If we have submitted for you in the past then we will complete your return and send you the figures before submission. The cost for this service is R650.00 per return.

The Department of Labour have made an online service available, which we have access to. Via this portal we are able to logon to the database and check the status of the returns for the clients for which we provide this service, and to capture the returns directly into the database. Once we have submitted the ROE via the online service, you will be assessed immediately.

We will email that assessment to you and you must pay within 30 days.

Unfortunately we cannot make this payment for you. It must be made directly from your organization to the Compensation Commissioner, you have the following payment options available:

Paying by cheque

Employers can send a cheque to: The Compensation Commissioner PO Box 955 Pretoria 0001.If they send a cheque, employers must include the remittance advice part of the notice of assessment with the cheque. Employers should also write their reference numbers on the back of the cheque.

Paying by direct debit

Employers can pay the amount directly into the Compensation Fund account at any ABSA branch. A deposit slip with the banking details of the Compensation Fund is attached to the notice of assessment that employers receive. The deposit slip also has a unique deposit reference number printed on it. If employers use another deposit slip, they must make sure that they include the reference number on that slip.

Paying by internet banking

The reference number is the number printed on the deposit slip you receive with the notice of assessment. The banking details of the Compensation Fund are also printed on the deposit slip.

Please keep copies of all payments for your reference.

Additional information on the 2012 W.As 8 form

  • The forms will be mailed to employers not registered on the ROE Website.
  • Employers must not submit the form if registered online.
  • With effect from 1 April 2013, there will be no assessment revisions entertained as a result of the fault of the employer.
  • In the event that more than one return is furnished for the same assessment period, the first return submitted will be accepted as a final one.
  • Criminal proceedings will be instituted for misrepresentation of facts.

COIDA Fact Sheet