A widows right to pension

A rather strange case which seems to limit the compensation of dependant widows after the death of their injured husbands is investigated by Professor of Insurance and Risk Management, Robert W Vivian, and Lecturer of Insurance and Risk Management, Albert Mushai of the University of the Witwatersrand.

Workers' compensation has been in operation in South Africa for well over a century and has been regulated by several pieces of legislation. It is not clear why the latest, the Compensation for Occupational Diseases Act (COID) (1993) replaced the Workmen's Compensation Act (WCA) (1941) since there is little fundamental difference between the two.

One minor but important difference is that COID applies to all employed persons where as the WCA applied only to persons earning below a certain level of income. Thus anyone injured in connection with work has a statutory right to compensation. This fact is probably not universally appreciated and many persons who are entitled to compensation do not receive their due.

Strange decisions

Recently, we came across a rather strange case. A husband was severely injured at work and was entitled to and awarded compensation in the form of a monthly pension. He had suffered permanent disability entitling him to a lifelong pension. A few years later he died. The medical evidence indicated that his death was as a direct result of his earlier injury. Upon his death the accident commissioner stopped the pension leaving the dependant wife destitute.

The commissioner took the view that the dependant wife was not entitled to the continued pension unless she could show her husband died as a result of a work related accident i.e. he would have had to suffer a second work related accident. With respect, this position is untenable. To understand why the dependant wife should continue to receive a pension on the death of her husband the common-law position must be examined.

Dependant's actions in the common-law

Initially a dependant did not have any right of action in the common-law. The reason for this is simple. Common-law only recognises actions based on injury caused to the defendant. It is the husband, not the wife who is injured. Dependants' suffer a pure financial loss, not physical injury. When a husband is injured, the husband had a right of action against the person who caused his injury, since the dependants (wife and children) were not injured they had no right of action, nor is it necessary for them to have such a right, since the injured husband could claim damages from the person who caused his injury.

The common-law works on the basis of only 'one bite of the cherry' so the injured party must work out the full value of his loss and the plaintiff pays a one off lump sum. These damages relate to medical expenses and the husband's loss of income, and thus include the loss the dependants suffer because of the husband's inability to earn an income. Once he receives the lump sum, he invests it and he and his dependants receive a life-long pension to replace the income he has lost. Of course should he die, the pension from the investment does not cease. So, in the case of injury, the dependants' rights are included in the husband's right to damages.

International precedent

The problem arose where the husband was killed and not injured. Since the wife was not injured, she had no cause of action, in the common-law, against the person who caused her husband's death. She only suffered a pure economic loss. To remedy this in the United Kingdom, the Fatal Accidents Act was passed giving dependants the right of action for the death of the breadwinner.

No Act similar to the Fatal Accidents Act was passed in South Africa but gradually the right of dependants to receive compensation on the death of the breadwinner was recognised and developed by the South African courts. Today no doubt exists as to the rights of dependants to receive compensation. Thus, two completely different procedures exist for the dependants' right to damages, one if the husband is injured but lives and another if he dies.

If it is recalled that in previous generations very few wives worked, the importance of dependant's right of action for the death of the breadwinner for their very survival will be understood.

Dependant's right to workers' compensation

Workers' compensation was passed to ensure that injured workers receive compensation as quickly as possible. It was not the intention of workers' compensation to place the injured worker in a worse position (other than for claims for pain and suffering) than the common-law but to ensure that worker and dependants were provided for. This was achieved through the insurance mechanism and instead of the common-law one off lump sum invested pension, the accident fund pays the monthly pension.

Instead of the claim being paid by the employer and recovered from an insurer (the system which existed in the United Kingdom and in some cases exists the South African mining industry), the claim is made directly against the fund.

To prevent the injured person from having two claims (one against the fund and another against the employer) the claim against the employer is removed (s35 of COID). Thus it should clear, if the husband lives, a pension to cover both his and his dependants' rights should be granted to the husband. If he lives his dependants have no claim against the fund. On the other hand if he dies, the dependants have direct claims against the fund.

So, if the husband survives the injury, the fund pays a pension to the husband which covers the dependants' claims. This pension obviously should not stop on the death of the husband. If it does, the dependants are severely prejudiced by the existence of the Act because not only do they not received compensation, but cannot sue the employer because of s35 of COID.

Odd situation

If the dependant does not receive the pension, an odd situation exists. If the husband is killed at work, the wife receives a lifelong pension. If the husband survives, but is injured to such an extent that he will never be able to work again, and dies say a few days later, say in a motor accident while being transport to the hospital, she receives nothing, unless she can convince the commissioner that the motor car accident was work related.

If this case is indicative of the practice of the compensation fund then dependant widows are being left destitute, and they should not be. This is a serious matter which should be investigated more fully and if necessary be discussed at Nedlac to obtain clarity and a possible amendment to COID.

If not resolved this may lead to surviving injured employees suing their employers for the loss of compensation, not covered by the Act, i.e. the dependants, missing compensation.