Employers claim COIDA Bill “pie in the sky”

…….article dated 4 June 2021……

Dysfunctional Compensation Fund the problem…

The overall topic during four days of parliamentary hearings on the Occupational Injuries and Diseases Amendment Bill (COIDA Bill) centered around the troublesome clause 43 of the proposed legislation.  The overall objectives of the Bill are to extend coverage under the existing COIDA Act to previously excluded “vulnerable workers, as well as the improvement of compensation benefits to employees in general”.

The Employment and Labour Minister, Thulas Nxesi, in gazetting the Bill for public comment during 2020, described the COIDA Bill as a significant step in bringing domestic workers under the fold of the Compensation Fund.

Seen as good

As most are aware, the Constitutional Court in Mahlangu ruled in 2020 that the exclusion in the Act regarding domestic workers from being able to claim from the Compensation Fund in the event of injury, illness or death, was unlawful and violates the rights to social security, equality and dignity.

When tabled in Parliament early 2021, the resultant Bill correcting this appeared to differ very little from the original version gazetted, indicating to most in the private sector labour and medical world that the Department of Labour (DoL) was not hearing much of what was being said by labour attorneys and the body of medical practioners.

Of the 86 written submissions to the gazetted version, the changes to existing provisions proposed by section 43 were seen as most unreasonable and not thought though properly in any way.

No reason given

Whereas most legislation, it was pointed out in hearings, is introduced for some reason in the preamble or provides a rationale for the proposals, the COIDA Bill gives absolutely no reason for its introduction. Therefore, the hearings in May represented an opportunity to appeal to MPs on some of the more unnecessarily onerous clauses introduced in difficult times.

Submissions came from Relay Emergency Medical Services (REMS); the Hospital Association of South Africa (HASA); Quad Para South Africa (QASA); South African Medical Association (SAMA); Association for Dietetics South Africa (ADSA), South African Institute of Chartered Accountants (SAICA); the National Employers Association of South Africa; COID Link;  the Minerals Council of South Africa and the Women’s Legal Centre Occupational Therapy Association of South Africa (OTASA).

Devious and dangerous

Clause 43, which is meant to amend section 73 of the COID Act, states  ‘‘…. the medical practitioner may, after the claim has been finalised or the period referred to…. has lapsed, apply for reopening of the claim and payment of further medical costs.”  It further states, “ Any provision of any agreement existing at the commencement of this Act or concluded thereafter in terms of which a service provider cedes or purports to cede or relinquishes or purports to relinquish any rights to medical claim in terms of this Act, shall be void.”

State red tape

Dr Angelique Coetzee of SAMA said “This clause means that medical practitioners can no longer use their medical claims as surety for payment. This will not only place immense administrative, financial and legal pressure on the medical sector; it will disadvantage injured workers and their right to quality medical care.”  The amendment meant medical practitioners would attend to the claims without any third party’s involvement and assistance.

The long-term impact of such conditions would be doctors will just refuse to see the patients in order to avoid the clerical load without any form of re-imbursement for their costs, she said.


The proposals before Parliament introduce harsher penalties on employers suspected of unlawful conduct in connection with workers’ compensation claims.  Also, because of  “an over-crowded court roll” employers will no longer face criminal sanctions imposed by a court of law, but rather with more extreme penalties as a deterrent, which can be objected to first through the Fund, and subsequently to the courts “should they wish to persist”. Once again in the virtual discussion, the DA raised the objection against the ever-present wish of the governing party to direct authority away from the courts

Further proposals are that inspectors will  have the power to enter homes and workplaces subject to consent from the occupier and or owner will have the power to issue compliance orders ultimately an order of court.

Passing the buck

The Bill also introduces a concept called a “multi-disciplinary employee-based processes”, whereby employers are expected, before they embark on any dismissal notice to employees suffering from occupational injuries or disease, to be able to report that all attempts at re-habitation, reintegration and return to work processes were exhausted

The Act currently excludes domestic workers from being able to claim from the Fund in the event of injury, illness or death, and this was found to be both unlawful and violating the rights to social security, equality and dignity.


Dr Coetzee for SAMA re-iterated that they welcomed the fact that domestic workers will be included for the first time but said that what was proposed in the form of the new Bill as Fund cover was both unrealistic and unstainable in the “real world”. She asked for the rationale behind the need for all the changes, explaining that it seemed that it might be because there was no possibility that the Fund could not take on all the liabilities arising from the new proposals and wished to opt out.

She said, “We call on the Department of Employment and Labour to focus on what does not work at the Fund, which are issues like claims, administrative capability of the fund, and the IT system  none of which seems to work, and which represents the third application of new systems in ten years.  Also, we must have clarification on what was meant by compensation in terms of retrospectivity for claims going back in time”.

It has to go

The National Employers’ Association of South Africa (NEASA) were also totally against any such moves as proposed by Section 43.  NEASA called upon MPs to insist on its total removal and they insisted that Parliament restores the integrity of the Fund and to bring about some form of efficient operation.

CEO Gerhard Papenfus said the current ability for the medical profession to cede medical service provider invoices to financial institutions and third-party administrators was the only way to bypass the Fund and get paid and to provide further services. The use of third-party providers was seen as using the only part of the Fund that could be said to be properly working, he commented.

Bad record

He continued, “Removing cessions will have a devastating impact on workers, medical professionals and employers since for some time the Fund has been structurally and operationally dysfunctional. This is evidenced by repeated qualified audits by the Auditor-General and a slew of litigation and court orders against the Compensation Fund for non-payment of claims.”

Papenfus said the medical professionals “often choose to cede their claims to third-party administrators in return for immediate payment and not wait  months for the Fund to pay, if they do at all.”

Plenty of cash

He told parliamentarians that currently when an employee is injured at work, the employee is able to access necessary specialised private medical care, given that the employer contributes to the  Fund, “which should have built up vast sums over the years. The third-party service providers then claim the fee from the Fund, working the systems which are both bureaucratic and slow, using short cuts which they have learnt and using court processes when necessary .

“We suspect that the Fund’s administrators are well aware that medical practitioners often do not necessarily have the administrative capacity or expertise to navigate the complex and dysfunctional claims system of the Fund. Third-party administrators, as experts in their area, having paid the professionals on time have been most successful in finalising their own claims often by way of legal action.”


Papenfus maintained that government was trying to hide its incapabilites, saying that “it was possible that the Fund was trying to prevent more of the hundreds of adverse court findings against it, in the hope that medical practitioners will not pursue their unpaid claims because of cost,” says Papenfus.

If Section 43 is achieved by DoL, he told MPs, the medical profession will not be able, by law, to hand  over their invoices for processing for a fee, meaning that they will simply close their doors to needy patients.   It is a well-known fact, he said, that the Fund years behind in claims and was staffed  by unresponsive public servants, another obstacle told medics should they be prepared to put in a costly systems to claim themselves.


With Minister Thulas Nxesi in attendance, Dot told MPs of the Portfolio Committee of Employment and Labour that in the next year, the Fund’s target was a 10% increase in the total assets of the Fund; a 60% reduction in matters affecting the audit outcome; all systemic deficiencies in regard to the payment and processing of claims being addressed by the new claims management system.

Wasteful and fruitless expenditure in the current year was to be reduced by 25%; a 15% reduction in irregular expenditure; there was to be investigation of 60% of all fraud cases reported; and a vacancy rate of less than 10%.


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