The Compensation for Occupational Injuries and Diseases Act (COIDA) provides compensation for employees if they become disabled due to occupational hazards, contract a terminal illness, or die because of their injury or disease while still employed.
In terms of the Act, all employers conducting business in South Africa are obligated to register with the Compensation Commissioner and pay contributions to the compensation fund.
As an employer you should review the need for additional accident and illness insurance for those earning in excess of the current statutory limit of R377 097. Importantly, the maximum benefit payable is limited to 75% of the actual salary of the employee, but with a salary cap of the statutory limit. So, for example, a person earning R500 000 per annum would have a shortfall on the total salary cap of around R125 000 per annum.
COIDA protects all casual and full-time employees, with a few exceptions. These include:
• domestic workers who work in a private home;
• employees guilty of wilful misconduct, unless the accident results in serious disablement or the employee dies and leaves a dependent who is wholly financially reliant upon them;
• a person who spends 12 or more successive months working outside of South Africa, unless there is an agreement between the Director-General, the employee and the employer concerned;
• the South African National Defence Force and the South African Police Services, as they have a separate fund from which they claim; and
• employees in the mining sector, who are covered under the Occupational Diseases in Mine and Works Act (ODMWA).
If your business has one or more employees, it’s required by law that you contribute to a central compensation fund. This amount varies according to how dangerous the industry is, the number of employees, and their salaries. According to the Act, the fund provides compensation for: death, permanent disablement, temporary disablement, medical expenses and additional compensation.
Employees no longer need to prove that an employer has been negligent in order for them to claim. However, as employees can still sue their employers under common law, it’s recommend that you take out additional business insurance.
Although COIDA protects a company against claims made by an employee, or their dependents, in a court of law an employer can still be found independently liable. This means that the employer will have to pay the compensation from their own pocket. These costs can include but are not limited to legal and medical expenses, supplementary wages and maintaining the dependents until the employee can work again.
Hence the importance of taking out additional business insurance cover to protect both the employer and the employee in the event of an accident, illness or death.
For more information about how you can protect your company and your employees, call Indwe Risk Services on 0860 13 13 14 and speak to an insurance advisor you can trust.
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