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Medically-induced employee incapacity – a real threat to business

Human Resources and Human Capital Management (HCM) specialists describe South Africa’s labour law as comprehensive in terms of management of employee incapacity – and failure by business to comply will have serious repercussions for any business, particularly when it comes to health-issues and the physical wellbeing of employees.

HR and HCM solutions provider CRS Technologies says key sets of legislation, including the Labour Relations Act (LRA), Occupational Health and Safety Act, and Employment Equity Act (EEA), are in place to help govern employee incapacity.

It is important to fully understand what it is that needs to be complied with says Nicol Myburgh, Head of HR business unit at CRS Technologies.

Myburgh explains there are two key components – incapacity caused by work related injuries and diseases, and incapacity not caused by work related injuries and diseases, but in jobs with very specific physical requirements.

“When looking at industries particularly susceptible to incapacity caused by work related injuries and diseases, we can look at the mining sector and companies working with harmful chemicals – they are highly susceptible. However, they are doing a lot to minimise the risk, specifically with reference to stringent safety regulations and compulsory PPE,” he explains.

With regards to incapacity not caused by work related injuries and diseases but in jobs with very specific physical requirements, CRS Technologies highlights companies with a high level of physical demands, specifically in the manufacturing industry.

“For instance, if someone is required to perform manual labour but has lost the use of one or more limbs, he or she will likely not be able to produce at the required level. This could be a big problem in the manufacturing industry because usually these employees are not qualified for office work and this makes reasonable accommodation extremely difficult,” Myburgh adds.

CRS Technologies attests that generally most decision makers understand the implications of the law and what compliance entails – and larger operations have specialised skills employed to manage the health and safety of staff.

But this does not apply to all businesses, and SMMEs (those specifically with 100 employees or less) simply cannot afford to appoint this type of specialist.

Whether they have this level of support available or not, they must comply with the law, and this is actually the crux of the matter Myburgh explains.

The extent to which compliance is expected is illustrated in the application of laws.

When it comes to the Occupational Health and Safety Act, in this context this Act holds reference to Occupational Injuries and Diseases, and the consequences of non-compliance to this Act has both a financial and criminal liability.

“For instance, if an occupational injury or disease is not reported to the compensation commissioner the employer may be held liable for all costs involved. This is not necessarily limited to medical costs, it extends to civil liabilities – for instance the loss of income an employee has suffered and will continue to do so,” says Myburgh.

Furthermore, regarding the Employment Equity Act, in this context the consequences of non-compliance to this Act are financially punitive to the Company.

The Act stipulates in Schedule 1 the maximum permissible fines that may be imposed for contravening this Act are as follows:

Maximum permissible fines if the Act is contravened, the greater amount of the penalty versus annual turnover will be the total penalty: –

Contraventions of the Act Fixed – Penalty – % of annual turnover

 

  • First Contravention – R 1,500,000 – 2%

 

  • Second Contravention – R 1,800,000 – 4%

 

  • Third Contravention – R 2,100,000 – 6%

 

  • Fourth Contravention – R 2,400,000 – 8%

 

  • Fifth Contravention – R 2,700,000 – 10%

 

The Department of Labour enforces this Act by sending inspectors to employers and they pay specific attention if complaints are received.

“The consequences of non-compliance to the Labour Relations Act have financial implications for the Company. This holds reference to the above-mentioned processes not being correctly followed and the employee lodges a dispute with the CCMA, the risk an employer runs going to the CCMA is the potential of being ordered to pay the employee up to 24-months salary as a settlement or even re-employment with or without backdated payments,” Myburgh explains.