OPEN LETTER

16 September 2021

Commissioner Vuyo Mafata

Compensation Fund Commissioner

Also for the attention of:

Minister Thulas Nxesi

Minister of Employment and Labour

Dear Commissioner

CONTRADICTORY AND CONTROVERSIAL RULES TO THE COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES ACT AMENDMENT BILL

CALL FOR IMMEDIATE WITHDRAWAL

The abovementioned matter refers.

NEASA is stunned and disappointed at the blatant back-door legislation attempted to be forced through by the Department of Employment and Labour and the Compensation Fund. This implementation of detrimental rules, in contradiction to both the will of Parliament and legislation, cannot be left unchallenged.

After publication of the first draft Bill on the Amendment of The Compensation for Occupational Injuries and Diseases Act (‘the Bill’), NEASA and numerous other role players vehemently opposed the ‘prohibition of cessions’ as introduced by section 43(4) of the Bill.

We were relieved when the Parliamentary Portfolio Committee on Employment and Labour, following the numerous objections by interested parties, removed the controversial section 43(4) of the COID Amendment Bill, which sought to prohibit Medical Service Providers (MSPs) from ceding their claims for payment by the Compensation Fund to financial institutions or third-party administrators.

By removing the prohibition, Parliament admitted and acknowledged that third-party administrators fulfil a critically essential role in the Fund which is plagued by dysfunction and corruption.

The above mentioned apparent ‘victory’ was recently decimated by the Rules to The Compensation for Occupational Injuries and Diseases Act Amendment Bill (‘the rules’) published by the Compensation Fund in the Government Gazette, on Friday 10 September 2021.

Since the Compensation Fund will no longer be accepting banking details and nominated bank accounts of agents and other representatives, other than MSPs or Healthcare Organisations, these rules effectively amount to the prohibition of cessions.

A further controversial rule dictates that the MSPs and Healthcare Organisations only have two weeks to register and verify their accounts with the Compensation Fund – despite it being common knowledge that these account verifications and registrations usually take at least two months.

Clearly, the rules are in direct contradiction to the COID Amendment Bill, as accepted by the Parliamentary Committee on the matter. Bureaucrats at the Fund, after being overruled by Parliament, simply implemented their original wish of prohibiting cessions, by virtue of these rules.

To avoid fraud, the Department of Employment and Labour and the Compensation Fund introduced a provision into the Bill whereby all beneficiaries, including third-party administrators, must register, and be vetted, a process which could include bank verification. If the rules now provide that those payments can only be made directly to MSPs, it is in fact contrary to the provisions of the Bill.

Should the rules take force as envisaged, on Friday 30 September 2021, it will effectively halt the Fund’s payment system, leaving the, already strained, MSPs out of pocket and without the third-party administrators’ cession-safety net.

NEASA wishes to express its utmost disdain with the Compensation Fund, who underhandedly intends to implement these controversial and contradictory rules to the detriment of the industry. The manner in which Parliament’s decision in this regard was overruled by bureaucrats, is unethical and is a classic example of bad-faith, malicious back-door introduction of legislation.

We therefore call on Commissioner Mafata to immediately withdraw these rules.

We look forward to your urgent response and hope that this matter can be resolved swiftly.

G.C. Papenfus

CHIEF EXECUTIVE

For more information:

NEASA Media Department

media@neasa.co.za

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