Workmen’s Compensation Fund temporary shutdown shock

The Injured Workers’ Action Group (IWAG) has expressed alarm that Workmen’s Compensation Fund plans to shut down its system from 15 to 31 March 2021.  

The fund issued a notification to stakeholders on Thursday but did not explanain the reason for the shutdown, the advocacy group, IWAG said in a statement.

IWAG described the announcement as “another indication” of the Workmen’s Compensation Fund’s “dysfunctionality”.

The shutdown takes place at the same time that the Department of Labour has notified domestic workers and their employers to register with the fund. This stems from a November 2020 landmark judgment of the Constitutional Court ruling that employees who performed domestic work in the home of their employer and who suffered an injury or contract an illness while on duty must be included as beneficiaries of the fund. 

 “While Government must be congratulated for including domestic workers as beneficiaries of the Compensation Fund, it only has value if the system works. It is widely recognised that the fund is dysfunctional, and one cannot underestimate the far-reaching devastation this has on the lives and livelihoods of the injured, mostly blue-collar workers of this country and their families,” IWAG spokesperson Tim Hughes said.

While the Workmen’s Compensation Fund has assets of over R60 billion, and more than R26 billion in reserves, workers, employers and medical service providers find it extremely difficult to access the Fund’s systems system’s according to IWAG. In October 2019, in an effort to simplify and expedite its claims process, the fund replaced its previous IT system with a new SAP-based IT system called CompEasy, at a cost of R285 million.

IWAG said this is fifth IT system that the Fund has invested hundreds of millions in over the past 20 years. However, the new system is highly problematical and is exacerbating delays in the registration and adjudication of claims, and pay-outs. 

The failure of the Workmen’s Compensation Fund’s new system is such that, in a recent IWAG survey of employers, only 31% were able to successfully report an IOD incident.

Hughes said this clear evidence of dysfunctionality only made it more imperative that government’s proposed ban on the cession of medical service providers claims to third party service providers be removed from the proposed COID Amendment Bill, which is the same piece of legislation which will extend the benefits of the Fund to domestic workers.

“Given that medical service providers, who treat injured on duty patients in good faith, will not be able to cede their invoices to financial institutions or third-party administrators for timely payment or access to overdrafts, there is a real risk that their practices will be forced into financial distress or collapse if Section 43 is adopted,” he said. 

“More concerning is that because of the financial risk, the introduction of Section 43 will discourage many health care providers from treating workers who are injured on duty, thereby significantly reducing the pool of care, and placing additional pressure on an already strained public healthcare system. For domestic workers, the inclusion of Section 43 will undermine the level of care theyare being promised, and remove the true benefits of being a beneficiary.”