Compensation for Occupational Injuries and Diseases: Half of SA businesses non-compliant

09 February 2024 SHA Risk Specialists
Dave Honeyman

Dave Honeyman

South Africa’s Compensation for Occupational Injuries and Diseases Act (COIDA) was established to provide compensation for physical harm, fatal accidents and diseases incurred in the workplace.

However, given that an estimated 50% of registered companies are not compliant with the COIDA, a definite need exists for more employers to be educated to avoid costly consequences.

This is according to Dave Honeyman, Business Head of Accident and Health at specialist insurer SHA Risk Specialists, who explains that the Compensation Fund - mandated by the COIDA - plays a key role in providing employees with much-needed financial support and employers with a regulated mechanism through which to address the costs involved. “Given that half of local businesses are currently non-compliant, urgent action needs to be taken. Business owners need to pay more attention to this statutory benefit, which is essential to protecting the health and wellbeing of their workforce.”

Tackling the need for better employee protection
Recent estimates put annual workplace accidents in South Africa at around 198 000, with an additional 22 000 occupational diseases being contracted per annum. This equates to 220 000 occupational incidents every year. Research also suggests that occupational events such as these are vastly under reported, with occupational diseases being under reported by at least 25%.

Honeyman says that the injury, disablement, or death of an employee can have a far-reaching impact on their employer as well as their family and extended community. For companies, the inability of an employee to fully tend to his/her daily responsibilities can negatively impact productivity, output and team morale. For the employees’ families and dependents, the loss of a breadwinner can be financially devastating.

He explains that the Compensation Fund was established with the aim of mitigating this impact by compensating employees and their families financially, providing employees with the appropriate medical care and facilitating a favourable return-to-work process.

“As such, all South African employers are mandated by the COIDA to register with the Fund and submit an annual Return of Earnings (ROE) each year to ensure a fair and proportional contribution. Currently, however, only half of local employers are compliant with these provisions.

“The low uptake of this statutory obligation can be attributed to several hurdles. Some of these challenges include administrative challenges lack of understanding and training on the claims process, large upfront deposits for emergency medical treatment

Honeyman says that at the root of these challenges is a general lack of understanding on the important role that the COIDA plays in protecting workers and build robust workforces, as well as how compliance can contribute to healthier workplace cultures.

A step forward for SA employers
In answering the clear need that exists in the market to provide employers with education, training and administrative support in this regard, SHA recently partnered with Sena Financial Services to launch an employee injury assist value-add product. This niche service is geared towards making the process involved with becoming COIDA compliant, more streamlined, aligned with legislation, and less of an administrative burden for businesses.

“Our research has enabled us to understand the pain points that face companies who need to comply with the Act and we have tailored our product to address those challenges and make compliance much easier. We also aim to bring all stakeholders in the process, including Government, Business and employees closer together so that more supportive workplaces can be fostered,” says Honeyman.

Fully accessible from 01 January 2024, the product provides SHA clients with administrative support, an efficient system and technical advice on how to become compliant with COIDA. This will include registration with COIDA, Rand Mutual Assurance (RMA) or The Federated Employers Mutual Assurance Company (FEM) and the issuing of a certificate of good standing. SHA will also assist clients in completing their annual declaration and ensure that the tariffs they are paying are aligned with the relevant industry and claims history.

As Ernest Hadzhi, Chief Executive Officer at Sena Financial Services, adds: “what we are enabling is a culture of compliance that will serve the millions of South African employees who experience various levels of risk in their day-to-day jobs. We are confident that this service will streamline the registration process, help with the facilitation of claims and provide vital support for companies.”

In addition to reaping the benefits and protection that COIDA compliance secures, employers may opt to take out additional personal accident cover to fill any gaps in the cover offered by the Fund and provide additional benefits to their employees during their tenure. Apart from the advantages of being holistically covered for workplace incidents in terms of risk mitigation, these benefits can also bring immense value to the employee value proposition.

“Through ongoing education and advisory service, we can equip companies with the knowledge and support they need to offer real and meaningful worker benefits and ultimately demonstrate their commitment to employee wellness,” concludes Honeyman.

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