Omission in labour relations act puts employers at risk of defrauding disabled employees of benefits

11 May 2010 Liezel Botha, Claims Manager, Alexander Forbes Life

The Labour Relations Act does not require that companies’ human resources departments be sufficiently qualified to manage disability claims. As such, thousands of South Africans are being denied their disability benefits since the biggest single cause of disability claim repudiation is the failure of employers to correctly and timeously notify their employee benefit funds of possible claims.

Up until now many of the people denied their benefits have been either uninformed of their rights, or too poor or unsophisticated to fight back. But, warns Liezel Botha, Claims Manager at Alexander Forbes Life “should an employee be able show that he or she has been denied disability benefits due to an employer delaying or incorrectly completing a disability application the employer will be held liable.”

If an employee can no longer perform his or her duties due to injury, illness or incapacity their employer has three months to notify their benefit fund and a further six months thereafter to submit the correctly completed documentation. Many employers, however, “fall into the trap of trying to decide themselves whether an employee is disabled or not - while they experiment with putting employees on light or different duties or reduced hours” explains Botha. By the time they realise that these solutions are not working the three month reporting period is up and the claim is rejected.

Alternately employers try to complete the benefit claims procedure themselves, usually failing to provide clinical data or incorrectly completing medical reports which should be completed by medical professionals.

Some of the confusion stems from “employers being the owners of policies of which their employees are the beneficiaries” says Botha. Also, with most employers not understanding what is in their disability benefit policies there is little chance of this filtering down to human resources staff - less still employees who are often unaware that there is even such a thing as a disability policy.

In the past employees have just been let go, often heading off to their rural homes without a cent.

But “employers can’t rely on employees’ ignorance forever” warns Botha. Some of these claims are worth millions, and even a few hundred thousand rand is a lot to people in disadvantaged circumstances.

So, in short, should an employer fail to notify their benefit fund in time, or cause an application to be rejected by not completing it properly, the employer is liable to prosecution by the affected employee.

Botha believes that the Labour Relations Acts’ failure to specify the correct submission of disability claims as an employers’ duty is an oversight. This though should not provide lax employers with any comfort. “In today’s world lawyers working on retainer fees are hungry for oversights of this nature” warns Botha.

As such, employers should be sure that their disability submission process is managed by disability benefit professionals.

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