A COID loophole?

The recent case, heard by the Constitutional Court of the minister of defence and military veterans versus Thomas 2016 CC, is of interest since it throws light on the possibility of an injured employee claiming workmen’s compensation, as well as being able to bring a civil action for damages

The law governing civil actions is known as the law of delict in South Africa. In the United Kingdom and the United States of America it is referred to as the law of torts.

As is now well known, workmen’s compensation was introduced in the late 1800s to provide compensation for injured employees. Shortly thereafter, the workmen’s compensation law was extended to provide compensation for employees who contracted occupational diseases.

Hypothetically it was possible for an injured employee to bring a civil action for damages, but the employee would have to prove the employer was legally liable to pay compensation.  

At the time, because of three common law defences to these claims, the probability of a successful civil claim was remote when it came to injuries, and impossible when it came to occupational diseases.

Nevertheless, to avoid the possibility of double compensation, a civil claim was, and still is, prohibited, by virtue of section 35 of the Compensation for Occupational Injuries and Diseases Act of 1993 (COID).

Notwithstanding this, lawyers have looked for ways to bypass the prohibition. The Thomas case is a recent example of section 35 being bypassed.

Dr Thomas, a medical doctor, was employed by the Western Cape Provincial Government in its health department. She was seconded to a military hospital in the Western Cape, which fell under the control of the minister of defence and military veterans. While at the hospital she was injured when falling down some stairs.

She claimed worker’s compensation and also brought a claim of delict against the minister and a private company, which was responsible for providing the hygiene services at the hospital. The minister objected to the claim arguing that it was prohibited by virtue of section 35 of the COID, which prohibits an action by an employee against his or her employer.

Dr Thomas argued that her employer was the provincial government and not the national government and, therefore, section 35 did not preclude her suing the minister. The minister in turn argued that she was employed by the state and it did not matter if she worked for the provincial or national government, she could not sue the state.

The High Court agreed with the minister. The Supreme Court of Appeal disagreed and overturned the High Court decision. The minister then took the matter to the Constitutional Court.

As explained in previous articles, the COID recognises two distinct parties who are responsible for paying compensation: “insured” parties, and, where no “insured” party exists, the employer itself, but not as an employer, since the payments are the prescribed benefits as set out in the COID. The employer in this capacity is referred to as the “employer individually liable”.

Neither the provincial government nor national government pay workmen’s compensation levies. They are thus not “insured”. Consequently, they are employers that are “individually liable”. So, Dr Thomas would be entitled to worker’s compensation benefits paid for directly by either the provincial or national government – which is, in effect, paid for by the taxpayer.

In this case, since she was employed by the provincial government, it was paid for by the provincial government (in other words by the taxpayers). Yet she wanted more, so she sued the other arm of government; the national government – which would have to be paid for by the same taxpayers.

The minister argued, and the High Court accepted, that, since sections of the COID (such as the definition section and others) which exist when dealing with the “employer individually liable”, referred collectively to national and provincial government as “the employer”, these spheres of the state are to be treated, where the state is concerned, as if there is only one employer, notionally the state.

Thus, the minister argued that, when it came to paying compensation, it did not matter in which sphere of the state the employee worked. Thus section 35 prohibited a state employee from suing the state. The Constitutional Court agreed there was “merit in the argument”. The taxpayer is the same taxpayer. Just because different levels of government exist, this does not mean there are different taxpayers.

At this point the Constitutional Court raised what is now a familiar argument and ruled that it must “promote the spirit, purport and objects of the Bill of Rights” (whatever that may mean). It, therefore, argued that Dr Thomas had a fundamental right to bodily integrity and security of person and this right underlies her common-law claim. According to this argument, she should be paid additional compensation.

It should be added that being paid additional compensation is not the same as not being injured. The ancient obligation of the state is to protect the rights to liberty, life and property. The obligation is not for the state to pay compensation to people who are injured, but to protect people from injury.

The state, for example, has a police force and courts to catch, prosecute and punish murderers. The state cannot guarantee it will prevent murders. It does not offer to pay dependants of the murdered person compensation if a murder is committed. The difference between being injured and receiving compensation is the difference between day and night, or east and west.

Therefore, having failed to see the difference between being injured and receiving compensation, the Constitutional Court had no difficulty in ruling that if a person works for the state in the provincial government, or for the state in national government, that that person works for two different employers. Thus injured state employees (as in the case of Dr Thomas) can receive worker’s compensation benefits from the state in the form of the provincial government, and additional compensation from the state in the form of the national government.

And, thus, another way of bypassing section 35 of the COID has been found.

Legally Speaking is a regular column by Professor Robert W Vivian and Albert Mushai, both in the school of Economics and Business Sciences, University of the Witwatersrand. Robert W Vivian is a leading authority on insurance and risk management. He has written a number of books on South Africa’s business history. Albert Mushai holds a master’s degree from the City University, London, and was the head of the insurance department at the National University of Science and Technology in Zimbabwe before joining Wits University as a lecturer in insurance.