Coping with COIDA 

Stephan Pietersen, an injury on duty claims specialist at Work Accident Support*, breaks down the basics of the Compensation for Occupational and Diseases Act (COIDA), No. 130 of 1993.

In terms of COIDA, previously the Workmen’s Compensation Act, all companies employing one or more employees must register with the Department of Labour’s Compensation Fund within seven days of the first employee’s appointment. This is to cover employees against work accidents and occupational diseases, and applies to temporary, part-time, full-time, seasonal, and casual employees. Exempted employers will not need to pay assessment fees to the Compensation Fund, but will have to compensate their own employees who sustained work accidents or suffered an occupational disease. These employers are:

• National and provincial government departments
• Certain local authorities
• Employers insured by a company other than the Compensation Fund

Companies registered in terms of the COID Act fall into 13 different classes which are further divided into sub-classes. Each sub-class has its own rate that is adjusted periodically. This is the rate that companies pay for every R100 they pay out in wages/salaries to their employees. The sub-classes and rates were reviewed in 2020 and are being phased in annually until 2025.

Companies in the building industry are licensed to the Federated Employers Mutual Assurance (FEM) and those in the following classes are licensed to Rand Mutual Assurance Company (RMA):

• Mining
• Iron
• Steel
• Artificial limbs
• Galvanising
• Garages
• Metals

Annual earning declarations

Companies must declare their earnings to the Compensation Fund or the respective licensee so that their account can be calculated. Once calculated, fees will be payable within 30 days. Failure to declare earnings before the due date will result in a penalty of 10% being issued on the current year’s assessment fee, followed by an additional 10% penalty on the full assessment fee if the account is paid late.

Companies should be aware that they can apply for a payment arrangement. Also note that if a mistake was made when declaring the earnings, a company has 60 days to request a review of the account.

When a company ceases operations, it must apply to the Compensation Fund to be deregistered. This can only be done manually.

COIDA 2022

On 17 April 2023, COIDA 2022 was signed into law, although the implementation date has not yet been provided. Companies will suffer great financial losses if they miss due dates for the declaration of the return of earnings or the late payment of the assessment. While companies are currently penalised 10% of the assessment, the amendment act stipulates they will be penalised 10% of the annual earnings declared, which will have far greater financial consequences.

In 2020, companies registered with the Compensation Fund paid R9.5 billion in assessment fees, but there are tens of thousands of companies registered with the Fund that do not declare their earnings. The more than 25,000 companies registered with RMA paid R2.5 billion in assessment fees and R870 million was received by companies registered with FEM.

Letter of good standing

A company will be in good standing when it has:

• Registered with the Compensation Fund – section 80
• Declared the annual earnings – section 82
• Paid the assessment fee in full/instalments – section 86
• Reported accidents timeously

Work accidents

All accidents and alleged accidents must be reported within seven days after an employer received notice of such an accident or, in the case of an occupational disease, within 14 days. The employee should seek immediate medical treatment when a personal injury is sustained; it is the responsibility of the employer to provide the employee with transport to the nearest doctor.

Failure to report an accident within seven days can result in a penalty being issued of 10% of the declared earnings and the full cost of the injured employee’s transportation. In terms of COIDA, a company must pay the salary of the employee for up to three months while booked off duty and claim this back from the Compensation Fund.

The following documents must be submitted to report an injury:

• An employer’s report of an accident (WCI.2)
• The treating doctor’s first medical report (WCI.4)
• The injured employee’s payslip as at the time of the accident
• A valid certified copy of the employee’s ID or other proof of identification

It is important for companies to submit all these documents, to avoid delaying the adjudication of the claim, which can prevent doctors being paid for services rendered. Where employers have paid the medical expenses themselves and transported the injured employee to receive medical treatment, those expenses can also be claimed back from the Compensation Fund or the particular licensee. 

Benefits payable in terms of COIDA

There are several benefits payable if claims are accepted for the payment of reasonable medical expenses and compensation:

• Temporary total disablement: Loss of salary income while the employee is booked off duty and is receiving medical treatment.
• Permanent disability: The employee suffered impairment and is not able to function in the same way as before the accident.
• Death: In the unfortunate case where an employee passes away, the spouse and minor children qualify for a monthly pension. Funeral expenses are also payable.
• Medical expenses: The Compensation Fund is also a medical aid, so medical expenses and the conveyance of the injured employee will be paid according to medical aid tariffs.
• Constant attendance allowance: An additional payment of compensation can be approved when an injured person who receives a monthly pension needs constant help to perform the essential actions of life.

In 2020/2021 the Compensation Fund paid out R9.5 billion in compensation, including medical payments, compensation, and pension payments. This was less compared to 2019/2020, when R12.5 billion was paid out. In 2020/2021 the RMA paid out R1.5 billion in compensation.

The amendment act places greater emphasis on employers’ responsibility to stay compliant, as the penalties that can be issued will have huge financial implications.

* Work Accident Support, based in Pretoria, offers business solutions for the administration of work-related accidents through the administration of injury on duty claims, education, and training.