COID Act, previously known as Workmen’s Compensation

Jul 27, 2023 | Articles

Article supplied by Stephan Pietersen, Work Accident Support.

Compensation for Occupational Injuries and Diseases Act (COID Act), 1993:

In terms of the Compensation for Occupational Injuries and Diseases Act, No 130 of 1993 (COID Act), previously known as the Workmen’s Compensation Act, all businesses who employ one or more employees must register with the Department of Employment and Labour’s Compensation Fund within seven days after the first employee is appointed. This is to cover employees against work accidents and occupational diseases. It 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.

Exempted employers are:

  • national and provincial government departments
  • certain local authorities
  • employers insured by a company other than the Compensation Fund

13 different classes and sub-classes:

Businesses who are registered in terms of the COID Act fall into 13 different classes and are further divided into sub-classes. Each sub-class has its own rate which is adjusted periodically. This is the rate which businesses pay for every R100 they pay out in wages/salaries to their employees. The subclasses and rates were reviewed in 2020 and are phased in annually until 2025.
Businesses in the building industry are licensed to the Federated Employers Mutual Assurance (FEMA) and those in following classes are licensed to Rand Mutual Assurance Company (RMA):
  • Mining industry
  • Iron
  • Steel
  • Artificial limbs
  • Galvanizing
  • Garages
  • Metals
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Declare annual earnings:

Businesses 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 in 30 days. Failure to declare the earnings before the due date will result in a penalty being issued of 10% on the current year’s assessment fee and an additional penalty of 10% on the full assessment fee if the account is paid late.
Businesses should be aware that they may apply for a payment arrangement. Also note that if a mistake was made when declaring the earnings, a business has 60 days to request a review of the account. When a business ceased operations it must apply to the Compensation Fund to be de-registered and this can only be done manually.

Compensation for Occupational Injuries and Diseases Amendment Act, 2022:

On 17 April 2023 the Compensation for Occupational Injuries and Diseases Amendment Act, 2022 was signed into law. Although signed into law, the implementation date has not yet been provided. Businesses will suffer great financial losses if they miss the due date for the declaration of the return of earnings or the late payment of the assessment. While businesses are being penalised 10% of the assessment currently, the amendment act stipulates that businesses will be penalised 10% of the annual earnings declared, which will have far greater financial consequences.

Businesses registered with the Compensation Fund paid R9,5 billion in 2020 in assessment fees, but there are tens of thousands of businesses who are registered with the Fund but who do not declare their earnings. The more than 25 000 businesses registered with Rand Mutual Assurance paid R2,5 billion in assessment fees and R870 000 million were received by businesses registered with Federated Mutual Association.

Letter of good standing:

A business will be in good standing when it:

  • Is registered with the Compensation Fund – section 80
  • Declared the annual earnings – section 82
  • Paid the assessment fee in full / pay instalments – section 86
  • Report accidents timeously
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Work accidents:

All accidents and alleged accidents must be reported within seven days after an employer received notice of such an accident and in the case of an occupational disease, the timeframe is 14 days. The employee should seek immediate medical treatment when a personal injury was sustained and it is the responsibility of the employer to provide transport for the employee to the nearest doctor. Failure to report the accident in seven days can result in a penalty being issued of 10% of the declared earnings and a penalty of the full cost of the transportation of the injured employee. In terms of the COID Act, a business must make payment of 75% of the employee’s salary for a period of 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 businesses to ensure that all these documents must be submitted as it can delay the adjudication of the claim, which can prevent doctors being paid for services rendered. Whereas employers 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. The salary paid by the employer can also be included in the claim.

Benefits payable in terms of the COID Act:

There are several benefits payable if the claim is 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 as before the accident
  • Death – in the unfortunate case where an employee passed away, the spouse and minor children qualify for a monthly pension. The funeral expenses are also payable.
  • Medical expenses – The Compensation Fund is also a medical aid and medical expenses and the conveyance of the injured employee will be paid according to the medical aid tariffs
  • Constant attendance allowance – An additional payment of compensation can be approved when the injured person who is receiving 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 which includes medical payments, compensation and pension payments, this was a decrease compared to 2019/2020 where R12,5 billion was paid out. During the 2020/2021 the Rand Mutual Assurance paid out R1,5 billion in compensation.
A couple of years ago, the Compensation Fund appointed an additional 500 inspectors to ensure that employers are compliant in terms of the COID Act. The amendment act places a greater emphasis on employers to stay compliant as the penalties that can be issued will have huge financial implications.

Work Accident Support together with the LWO have gathered a way for our members to banish all insecurity regarding the COID Act. Let Work Accident Support ensure you comply while you focus on your business.

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