Compensation Fund capacity grilled

A small group of domestic workers gather outside the entrance of the Constitutional Court in Johannesburg. They sing a piercing refrain drawn from the apartheid struggle song, amaKomanisi: “My mother was a kitchen girl. My father was a garden boy. That’s why I’m a unionist.”

Standing in the corner created by the court’s towering wooden doors, Sylvia Mahlangu looks on, her body slowly crumpling under the crush of her tears.

In 2012 the death of Mahlangu’s mother, Maria, sparked a seven-year battle to challenge the exclusion of domestic workers from the Compensation for Occupational Injuries and Diseases Act, which pays out workers or their survivors for work-related injuries, illnesses and death.

Maria drowned in her employer’s pool. Despite working for the family for 22 years, they did not attend her funeral. And when Mahlangu inquired about compensation at the department of labour, she was told domestic workers are not covered by the Act.

Last year, the high court in Pretoria ruled that the exclusion of domestic workers from the Act was unconstitutional and invalid. The court also ruled that the declaration of invalidity must be applied retrospectively to provide relief to other domestic workers who were injured or died at work prior to the granting of the order.


Mahlangu’s case was heard for confirmation in the apex court on Tuesday, and though her application was unopposed, one question loomed over the proceedings: Will a ruling in favour of domestic workers open a floodgate to claims that could potentially collapse the state fund responsible for compensating them?

Last year the beleaguered Compensation Fund reported a deficit of R6.3-billion. The fund, which draws its money from employer contributions and its investment portfolio, has also been plagued by allegations of fraudulent claims and irregular expenditure.

But the department of employment and labour did not present evidence that a retrospective order, which would could see it administering claims from as far back as 1994, would cripple the fund.

In his heads of argument, Ngwako Maenetje SC, for the department, said: “Given the fact that the impugned provisions mostly affected poor people, and the absence of a clear crippling effect upon the fund, it would not have been justifiable to limit the retrospective application of the declaration of invalidity.”

The department filed an actuarial report investigating the implications of the possible deluge of claims by domestic workers and their families, but it was undermined by limited credible data.

Justice Chris Jafta questioned the compensation commissioner’s capacity to deal with these claims in light of potential fraud.

Section 44 of the Compensation for Occupational Injuries and Diseases Act stipulates that the right to claim “shall lapse if the accident in question is not brought to the attention of the commissioner or of the employer … within 12 months after the date of such accident”.

Jafta said the purpose of this section is to ensure that the commissioner “can investigate the authenticity of the claim”.

“Now if you have a claim where the accident occurred 15 years ago. How is it going to be investigated and a determination be made that the claim is genuine? That is my concern insofar as an open retrospective operation of the declaration of invalidity,” he said.

Addressing Mahlangu’s counsel, Kgomotso Moroka SC, Jafta asked: “Should we close our eyes to problems that we see may arise?”

Moroka contended that an order of retrospectivity would not take away the commissioner’s right to investigate claims.

She added: “I cannot see how you can bar a person who unconstitutionally was barred from claiming 15 years ago … The unfairness of it prevails.”

Jafta also questioned the Constitutional Court’s ability to confirm the high court’s order without knowing the reasons the lower court came to its conclusion.

The department did not file papers arguing against an order of retrospectivity in the high court. Jafta called the high court’s ruling a “vanilla order”.

“It looks like we are a court of first instance. You had to traverse all the reasons and convince us, because we don’t have the reasons.”

Acting Justice Margaret Victor intervened, saying “this is where intersectionality comes in. If there is a time bar in terms of section 44 — and if the high court didn’t give a full judgment — it just seems to me that it is the domestic worker that must bear the brunt of all these multifaceted aspects where not only must she face race discrimination, gender discrimination, class discrimination … Intersectionality, as I understand, it should cut through technicalities. Am I right?”

To which Moroka responded: “I can only say that you are right.”

The question of the Compensation Fund’s readiness to deal with a retrospectivity order then fell to the department.

Chief Justice Mogoeng Mogoeng asked Maenetje: “Just to assure us that whatever order we make will be capable of enforcement, who do we pin our hopes on for the purpose of making resources available for the employees? And has the state tracked the health or ill health [of the fund] to assure us there is nothing to worry about?”

Maenetje reiterated that the department has not managed to estimate the effect of the claims on the fund.

He added that there is a history of 50% noncompliance on the part of employers, who are meant to make contributions to the fund. “But even with that 50% noncompliance, the fund is able to meet claims.”

Maenetje said the department has already started readying its infrastructure for claims from domestic workers, “because they’ve always acknowledged that this category is unconstitutional excluded”.

He further contended that “it is difficult to imagine that there will be floodgates of successful claims and those claims that are successful will likely be covered by the reserve fund”.

“So in conclusion, the state will pay?” Mogoeng intervened.

Maenetje responded: “The state will pay those claims that are legitimate, submitted and are proved to be successful.”

Judgment was reserved.

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Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.

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