Effectiveness of regulatory institutions
Claiming workmen’s compensation can make for a minefield of problems, some of which require taking legal action
One of the advantages of workmen’s compensation is that the injured employee can receive compensation inexpensively and quickly; in theory that is. Essentially, an employee should get compensation if injured on duty.
The injured employee is not an expert on workmen’s compensation, so compensation should not be dependent on his or her ability to understand the system – which should be user friendly and driven largely by the fund itself.
In the private sector, claims are usually settled quickly. For example, a leading insurer put a system in place where a motor accident claim can be settled within an hour. In America, a new insurer called Lemonade has been launched. It looks like the Uber version of insurance. When using this system, an insurance claim is settled electronically within minutes.
Workmen’s compensation claims do not go through the courts. They are settled in what is called administrative law. Today these systems are generally referred to as regulatory systems.
If workmen’s compensation did not exist, the injured party would have to approach the courts and use the common law for recourse. This is known to be particularly inefficient. There is no such thing as a claim being settled within minutes – years is a better measure and millions of rand in legal fees is the norm when claims are settled through the courts. The legal system is basically a non-starter for high-volume workmen’s compensation claims.
Workmen’s compensation is not the only system to bypass the courts. In a recent American article, a judge pointed out that the public has less and less recourse to the courts. In fact, few have their proverbial day in court.
Increasingly, because of the prohibitive costs involved when courts are approached, individuals are attempting to solve issues themselves without the assistance of lawyers. This is generally not very successful.
Another reason why fewer and fewer matters are being resolved by the courts is the rise of regulatory institutions such as the one governing workmen’s compensation. It is, therefore, important to get a feel for whether or not these institutions are successful.
This is not easy to assess since – unlike court judgments where some are published and are increasingly becoming available on the internet – little information exists about the settlement of disputes within regulatory systems.
There are, however, indications that all is not well within the regulatory system. A recent case indicates that an injured employee has spent over 50 years trying to get compensation.
In another instance, so many claims have not been settled that judgements in execution have been granted against the institution and executed. Employees working for that institution have complained that they cannot work on the judgements, because their computers have been attached by the sheriff!
In another case, the head of the institution has been found guilty of contempt of court for falling to comply with a host of court orders.
With this background in mind, the case of John Molefe versus Compensation Commissioner 2007 TPD is insightful. Molefe was a truck driver and on February 15, 1996, while driving on duty, he was shot in the upper right arm in a hijacking incident.
This is interesting because some may doubt whether being deliberately injured in a criminal incident is an accident. Well, that matter was settled a long time ago… Being injured in an intentional criminal incident while on duty qualifies for workmen’s compensation.
So, in this case there should not have been a problem. That the shooting took place was not in dispute; that he was injured was not in dispute; and that he was entitled to compensation should also not have been in dispute.
While Molefe was in hospital, his employer gave his wife some money. From the available facts it seems that this was one of those “settle within an hour” incidents – so what went wrong? First, his employer reported that he had not been injured on duty. It is not clear why the employer did this, but, the result was that the claim was rejected.
When Molefe returned to work, he was unable to drive a truck and, therefore, became unemployable. He was thus entitled to claim for total disability. He found out only in April 1997 that his claim had been rejected. He approached an attorney to assist him and his claim was finally admitted on October 15, 2001, from which it can be seen that several years had passed. It can also be seen that he would not have been compensated had it not been for the assistance of the attorney.
The easy, inexpensive, user-friendly system had failed. Had the matter been dealt with correctly, he would have received temporary total disability payments, which would have assisted him greatly – another failure of the system.
He applied for the temporary total disability payment, which was rejected on the basis that these payments were made only if the employee was receiving active medical treatment (whatever that may be).
Workmen’s compensation is a statutory scheme. A person is entitled to compensation if the law says so. The law, which granted compensation to this man, says nothing whatsoever about receiving active medical treatment. The commissioner had inserted that exclusion. It also appeared that this was a general limitation applied to any application. In other words, hundreds, or even thousands, of other employees may also have faced the same limitation.
The issue thus became whether the exclusion is unlawful? A meeting was arranged with the commissioner and it was accepted that the limitation was, indeed, unlawful. It turned out, however, that the commissioner continued with this policy of unlawful exclusions. The matter was thus taken to court.
The judge found that no provision exists in the legislation to restrict the rights of injured employees to receive compensation. The court therefore ruled that the practice of limiting compensation to periods where employees receive active medical treatment is unlawful. The court also ruled that the failure to make monthly payments is unlawful.
The troubling aspect of this case is that the judge was simply ordering the commissioner to comply with the law. One would have thought that the commissioner would be the expert on this particular law.
One wonders how many other statutory bodies do not comply with their empowering statutes. This is troubling indeed!
Legally Speaking is a regular column by Albert Mushai from the school of Economics and Business Sciences, University of the Witwatersrand. 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 the University of the Witwatersrand as a lecturer in insurance.