South Africa: Employment and Labour On Safety Compliance and Compensation Fund Records

press release

Employment and Labour sees slight improvement in safety compliance while Compensation Fund records increased claims and CCMA works hard to limit retrenchments

There has been a slight improvement in compliance in the private sector while the government sector has recorded a slight decline, according to the Inspection and Enforcement Services (IES) of the Department of Employment and Labour.

These figures come at the time when the Department notices increased claims to Compensation Fund (CF), upped its ante in paying outstanding Unemployment Insurance Fund (UIF) lockdown benefits and the Commission for Conciliation, Mediation and Arbitration (CCMA) having worked hard to limit the number of retrenchments and has repurposed its operations in anticipation of jobs bloodbath.

The IES has seen a private-sector improvement of one percentage point to 58% versus the decline in the public sector of 2% to 45% come in the wake of numerous sessions that have been conducted using online platforms to both sectors by the Department as well as the Department of Health (DOH).

"What should be noted is that the compliance rate for the general industry sector has been at a relatively constant of 57% with very little variance since the beginning while the Government sector similarly has been at a very low compliance rate of 47% over the same period, again, with very little variance. There were more than 533 Prohibition Notices served over this period with a further 3 077 notices served overall," according to the Inspector General Aggy Moiloa.

A total of 4 433 inspections have been carried out in the private sector since March 27, 2020 and 385 prohibitions notices were served, 470 notices of improvements and 1 445 contraventions. Most notices have been served by KwaZulu-Natal followed by the Western Cape.

In the public sector, out of a total of 1 138 inspections, only 516 were compliant against 622 which were non-compliant. In the period, 148 prohibitions, 122 improvement notices and 507 contraventions notices were served.

Cumulatively, 5 571 inspections have been conducted with 3 070 compliant and 2 500 non-compliant - which is a cause for concern, according to Moiloa.

"We believe that all workplaces need to take extra care to ensure healthy and safe environments especially with the pandemic upon us. The slight improvement is a positive step and we urge accelerated improvements in compliance," said Moiloa.

The manufacturing sector has had the biggest number of prohibitions at 43, followed by the hospitality industry (33), the construction industry (17), iron and steel (15), agriculture and forestry (14), financial industries including call centres (9) and the food and beverage industries (8).

In the public sector, the Post Office has been slated for leading in prohibition notices at 20, followed by the police (19), education (18), municipalities (17), health and community services both at 16, justice and constitutional development (15) and home affairs at 9.

The news of the slight decline and unremarkable improvements come in the wake of an updated directive the Department has issued with regards to COVID-19 contracted in the workplace and CF has seen increased claims.

The Fund is under an obligation to consider all claims submitted for compensation and adjudicate them to determine liability and it will also consider all information submitted, including exposure, clinical history and the inherent risk posed by various categories of work and occupations.

The updated directive also recognises that an employee may contract Covid-19 through direct exposure in the workplace, while performing employment duties aligned to the employer's business, or through business travel to high-risk areas or countries. In other words, the Directive regulates workplace-acquired Covid-19 arising out of work-related exposures.

So far, a total of 3 547 claims have been received - 2 137 directly to the CF while the Rand Mutual Association has received 1 336 and the Federated Employers 74. Of the 2 137 claims received by the CF, 1 508 come from the Western Cape followed by Eastern Cape with 319, KwaZulu-Natal with 164, Gauteng with 68, Mpumalanga 45, North West 29, Limpopo 3 and Northern Cape with 1.

The CF has accepted liability to 1 398, which represents 65.4% of the claims received, repudiated 209 which is 9.8% and 530 await adjudication which represents 24,8% of the claims received directly.

Of the 1 336 claims received by Rand Mutual, most come from Gauteng with 962; 138 in the Eastern Cape; 69 in the WC; 57 in KZN; 29 in NW; 22 in the Free State; 21 in Limpopo and 38 are unknown. A total of 1 234 claims or 92.4% percent are pending adjudication while 7,3% have been repudiated.

Federated employers who represent workers mostly in the construction sector has received 74 claims - mostly from the Western Cape (26) and Gauteng (26), Northern Cape (9), North West (8), KwaZulu-Natal (4) and one (1) in the Free State.

In terms of relieving the stress of the lockdown, the UIF has paid close to R40-billion (R38.5-billion paid so far with another half a billion scheduled for payment today 11 August) which was the figure that it had committed to before announcing that the period Covid-19 TERS benefit scheme will be extended in keeping with the period of disaster to August 15, 2020.

But more importantly, the UIF has made great strides in closing the gaps of outstanding payments with over R1.5-billion paid since the beginning of August specially dedicated to outstanding payments over and above other payments.

These are the payments that the Fund could not process as it did not have all the required information and through the process of intense negotiations with all the social partners, great progress has been achieved and the needle is moving.

"We have had many sobering and intense negotiations with all the partners over the last week or so and many of the areas of disagreement have been ironed out and we are all committed to making a real difference to the people of this country.

"This intervention of putting R40-billion directly in the hands of the workers in this country is unprecedented and I believe that this intervention has shored up our economy and to a great extent, has carried it over the worst of the effects of the pandemic," said the UIF Commissioner Teboho Maruping.

With regard to the predicted shedding of jobs, the CCMA has noticed a significantly higher activity with regard to retrenchments in May and June this year. More importantly, it has also been involved in section 189A processes which have resulted in 27% of jobs saved, that is 2549 of 9 369 employees who were likely to be retrenched. Actual retrenchments were recorded at 6 713. The highest number of job losses were recorded in the Mining sector 3 056 followed by Food & Beverages sector 1 631 and lastly by the Manufacturing sector 324.

Other interventions that have mitigated the worst scenario include:

Increasing its facilitator/commissioner capacity that includes part-time commissioners by fast-tracking training,

Increased capacity of staff working remotely to attend to administrative matters,

Implemented additional options for cases to proceed through various digital platforms - particularly in section 189A facilitations,

Expanded the utilisation of external venues to ensure that matters are attended to expeditiously which also assists with managing large numbers hearings,

Promoted the Temporary Employee/Employer Scheme (TERS) and encourage workplace-based applications as a pre-section 189A option to mitigate the risk of retrenchments,

It has also initiated its early warning systems by conducting pre and post section 189A monitoring processes in order to mitigate potential or further retrenchments where companies have already gone through these processes, and

It has enhanced its relationship with Productivity SA and referred companies to them in order to explore business turnaround options.

For the month of July, the CCMA received 190 large-scale retrenchment referrals and 1 307 small-scale retrenchment referrals. These matters are currently in process and an indication on the number of job losses and those saved in large-scale retrenchment processes will be updated in September owing to the 60 days' requirement that may be extended for the process to be finalised.

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