Compensation Fund rotten at its core

2014-10-05 15:00

The labour department’s Compensation Fund – which received a disclaimer of opinion from the Auditor-General in its last reported financial year – is nowhere near resolving its rotten financial affairs, and there appears to be no political will to do so.

In a briefing to the parliamentary portfolio committee on labour last month, the Auditor-General outlined a picture of a dysfunctional agency unable to execute its mandate.

“The report on the workmen’s compensation section of the department of labour was entirely negative and the worst I’ve ever seen,” said committee member and DA MP Michael Bagraim.

The fund – built up through yearly levies to employers and meant to compensate employees for injuries or diseases sustained on duty – has consistently received qualified audits or disclaimers of opinion for the past nine years.

In most audit opinions, the auditors said proper accounting records could not be provided, which made it difficult to verify that management had correctly accounted for such things as revenue and claims paid out.

Bagraim, who was a labour lawyer and analyst before going into politics, said he had previously tried to lodge claims on behalf of clients, but had given up upon encountering a department in disarray.

Although auditors were unable to verify the actual amounts the fund has in its coffers, it appears to be sitting on a substantial cash pile (see graphic).

Labour department spokesperson Page Boikanyo referred queries to the fund itself, which did not respond by the time of going to print.

The problems at the fund have led to some claimants waiting as long as 13 years to be paid out.

Ismail Desai was attacked with bricks while working as an enumerator for Stats?SA in 2000, resulting in permanent hearing loss in his left ear.

“I was awarded a one-off payment of R3?472.42 in 2008, but I have never received payment,” he said.

He objected to the amount awarded because it was not enough to cover his doctors’ bills. The quote for the hearing aid he needed came to R22?000, he said.

Desai added that the commissioner of the fund, Shadrack Mkhonto, ordered further assessments, as well as the settling of the doctors’ bills and the cost of the hearing aid, around October last year.

“To date, nothing has been done,” he said. “Every time I send an email to the relevant persons, they reply saying that they are awaiting an appointment date and I just have to wait. There is no logical reason as to why they are delaying and making me suffer despite all my documents being submitted.”

An email enquiry about Desai’s case from City Press to the Compensation Fund’s call centre went unanswered.

Bernard O’Reilly is involved in a drawn-out dispute with the fund and Rand Mutual Assurance Company – licensed by the minister of labour to provide compensation benefits on behalf of the mining industry and its associates.

O’Reilly, an electrician, lost the full use of his hands. While repeatedly removing and replacing electric bulbs underground at the mine where he worked for a number of years, he fell and hurt his back when he had to walk over 15cm water pipes.

But Rand Mutual awarded him a 34% permanent disability pension based on loss of function in his thumbs.

An independent medical examiner was called in to mediate between the three parties at a tribunal hearing. His report – a copy of which City Press has seen – recommended O’Reilly be awarded a pension of 75% of his earnings for his hands, and an additional 10% for his back.

The report ostensibly superseded all other recommendations previously made by the fund and Rand Mutual, but O’Reilly said Rand Mutual was currently only paying him 75%.

O’Reilly is taking legal action to fight for a 100% disability pension as he believes Rand Mutual ignored previous medical reports, which showed he was unable to continue working as an electrician.

“The commissioner and director-general at the department of labour in Pretoria have overall authority over Rand Mutual Assurance. They seem to be powerless in making Rand Mutual Assurance liable for 100% disability pension,” said O’Reilly.

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