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Open Letter to Minister of Labour and Employment: Urgent Call To Withdraw Irrational And Damaging Coida Draft Regulations

 |  Injured Workers Action Group (IWAG) and others  |  NPO News and Media Releases


Minister of Employment and Labour

Dear Minister Nxesi,

Call To Withdraw Irrational And Damaging Coida Draft Regulations

Collectively, we represent over 130 cross-sectoral bodies, ranging from healthcare associations, medical practices, unions and companies, who in turn, represent over four million impacted parties who are deeply concerned about the chronic and persistent failings of the Compensation Fund.

In particular, we are alarmed by the recent regulations published by the Commissioner that we believe are ultra vires, irrational, unnecessary and if implemented, have the potential to damage the rights of workers, harm medical service providers and impact employers negatively.

Despite the bloated Compensation Fund having R60 billion in assets and R26 billion in reserves and receiving some R9 billion in annual contributions from 400,000 employers, on your watch, Honourable Minister, the Compensation Fund has lurched from crisis-to-crisis.

For ten years, the Auditor General has published disclaimers and adverse opinions about the Fund. In addition to material non-compliance with legislation, so deep are its pathologies that the Auditor General this year lamented that, if not required by legislation, it would withdraw from auditing the Fund. 

In May, Parliament’s Standing Committee on Public Accounts expressed its outrage at the collapse of internal controls and “absolute chaos” within the Fund. As the responsible Minister, you declared that you were “mad about this” and promised that forensic auditors would be appointed at the end of June to get to the bottom of the rot at the Fund.

Parliament’s Standing Committee on Public Accounts accused the Compensation Fund of not taking Parliament seriously, to which you promised a slew of improvements and turn-around measures to improve an institution that, while mandated to help vulnerable injured workers, was admitted to be “rotten to the core”.

Honourable Minister, this year you introduced the COID Amendment Bill, which embedded a catastrophic and possibly unconstitutional clause that sought, for no given reason, to prevent medical service providers from ceding their claims to third-party pre-funders and administrators for payment by the Fund.

While we as key stakeholders were never consulted in either the Bill’s entirely inadequate socio-economic impact assessment, nor during its drafting, we made lengthy and detailed written and oral inputs into Parliament’s public hearings into the COIDA Bill. All of our submissions opposed any attempt to prevent medical service providers from exercising their right to utilise the assistance and services of third-party pre-funding administrators, simply to keep their practices alive.

Although the offending clause was removed by Parliament, the very day after the legislature rose, the Compensation Fund Commissioner published regulations that effectively by-passed our democratically elected representatives to achieve irrational and possibly unconstitutional aims. We are strongly of the view that these regulations go far beyond the remit of the principal legislation and are constitutionally challengeable.

After withdrawing the regulations in the face of legal action, the Commissioner again published the regulations on 19 October for a 60-day period of public comment. In other words, your Commissioner is again using regulation to achieve by stealth that which Parliament specifically rejected. In this regard, we are also of the view that the Commissioner is exceeding his powers and authority.

To remind you, Honourable Minister, the Bill that passed through the National Assembly this year merely requires third parties to be registered with the Compensation Fund in the prescribed manner within six months of the commencement of the amended Act. Yet, the regulations published by the Commissioner on 19 October will effectively deny medical service providers their rights, prevent the treatment of injured workers, and place employers at risk for no rhyme or reason or benefit.

Honourable Minister, the below stakeholders call on you to urgently withdraw these irrational and potentially catastrophic regulations and open a meaningful dialogue with us so that, together, we can help tackle the chronic problems besetting the Compensation Fund, protect workers’ rights and ensure that medical service providers continue to treat patients injured on duty.

9 November 2021

Injured Workers Action Group (IWAG)
United Domestic Workers of South Africa (UDWOSA)
South African Medical Association (SAMA)
National Employers Association of South Africa (NEASA)
Compensation Solutions (Pty) Ltd
COIDLink (Pty) Ltd

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