Hitch in job risk clearances

2013-01-22 00:00

DELAYS in the Compensation Fund issuing letters of good standing to companies are the result of large volumes of requests coupled with the fund having restricted the issuing of letters to designated officials of the fund in order to curb fraud.

The Department of Labour says employers are required to register with the fund “and pay an annual assessment fee based on their workers’ earnings and the risks associated with the type of work being done”.

Companies that fail to produce a letter of good standing are not allowed on site and cannot complete the work they are contracted to do.

The letter proves that the contracting company is registered and that assessment payments are up to date.

A frustrated Lizette van Heerden, an accountant with Pleasantair, an air-conditioning company in Kloof, has spent more than six weeks waiting for a letter to be issued.

She told The Witness she first sent a request in early December 2012. She had already submitted a return of earnings (ROE), it had been assessed and she had paid the assessment fee.

“Companies, especially the big ones, will not allow our employees on site unless we have a letter … as this would open them up to a legal claim against them,” said Van Heerden.

“While backlogs are understandable, one has to bear in mind that this is having a serious impact on service delivery and the financial positions of the companies affected.”

The fund’s manager of communications, Dikentsho Seabo, said one of the reasons for the changes was that a large number of letters were previously issued improperly to employers who did not comply with the criteria.

“Consequently, the decision has been taken to restrict the issuing of such letters to a clearly defined group of officials at the fund head office until proper system controls have been put in place. The instruction was issued in December 2012.

“In cases where companies have raised objections against assessments or where the fund is investigating employers’ returns, a letter will be issued on a temporary basis.”

Seabo admitted that there had been delays in issuing letters “due to the large volumes of requests”.

Typically, letters are valid for three months.

However, Seabo said, after April 30, 2013, companies that have met the criteria for the new period of assessment would be issued letters valid for 12 months.

“Obviously those companies that have instalment payment plans will only have letters issued from month to month,” she said.

“Many companies are in fact not compliant, which results in delays while their problems are resolved.

“It is difficult to quantify the backlog. However, the fund is working extremely hard to resolve all requests.

“We have requested employers to make use of our ROE online submission to ensure that all their assessments are up to date,” added Seabo.


LETTERS of good standing will be issued only to employers who meet the following criteria:

1. Employers must be registered with the fund in line with section 80 of the Compensation for Occupational Injuries and Diseases (COID) Act;

2. Employers must have submitted all returns of earnings as per section 82 of the COID Act;

3. Employers must be fully assessed as per section 83 of the COID Act;

4. Employer must have settled all outstanding debt as per section 86 of the COID Act.

For more information, the Compensation Fund call centre can be reached at 0860 105 350.


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