The announcement of a large settlement between Anglo American South Africa and 23 former gold miners suffering from silicosis may cause employers to question the basis for the claim? Legislation in South Africa requires employers to contribute to compensation funds, known colloquially as workmen’s compensation.

Since the passing of the Compensation for Occupational Injuries and Diseases Act 1993 (COIDA) all employees must register and pay into the fund their assessed fee based on earnings and risk category. This fund pays out injured or sick employees whose condition is caused by actions/ factors in the course and scope of employment.

In the normal course: Employees pay annual sums to the fund according this formula:

Assessment fee = total employees pay ÷ 100 x assessment tariff.

This creates a reserve for claims that result from workplace injuries and death. This system sounds simple but is complicated by mergers and acquisitions, the presence of contractors on site and the need to set up various legal entities to regulate your interactions with other government institutions or changes in business operations.

The question of liability for all ‘workers’ on a site is therefore not easy to answer if some are contractors and there are multiple sites from which an employer operates a business.

Quick facts about COIDA:

  • Almost all employees are covered – amendments in 1997 provide that most employees may claim, not only those who earn less than the threshold amount;
  • Each branch of the business must register – different assessment tariffs may apply;
  • Employers are liable – there must be clarity where employees work on sites controlled by other companies (consultants or workers employed by labour brokers);
  • Separate funds cover the mining and building industries.

No Double Dipping: Section 35 of COIDA precludes employees and/or their dependants who receive payment from the fund from bringing claims for damages against their employers for occupational injuries or diseases.

Mining claims are different from those based on COIDA – The Constitutional Court decision in Mankayai v Anglogold Ashant Ltd 2011 32 ILJ 545 (CC) found a distinction between employers who receive compensation in terms of the Occupational Diseases in Mines and Works Act 78 of 1973 and those whose claims fall within the COIDA.

If an employer that does not comply with the notification process then they may be guilty of an offence and may be liable to pay a fine up to the full amount of compensation due to the employee.