Last month, the Constitutional Court ruled that parts of the Compensation for Occupational Injuries and Diseases Act (COIDA) are unconstitutional as they exclude domestic workers employed in private households from the definition of “employee”. This, the ruling states, must be rectified retrospectively. So, what does this mean for employers?
“The bottom line,” says Albert van der Merwe, assistant general secretary of the National Employers’ Labour Association (NELA), “is that we, as employers, can’t wait for the amendment to be promulgated because the amendment is retrospective. If your domestic employee is injured on your property today, for example, they will be entitled to compensation. The legislation states that cases dating back to 2004 will be eligible for compensation.”
Along with the Unemployment Insurance Fund (UIF), employers will need to pay towards the COIDA to ensure their domestic employee(s) are covered, as commercial businesses currently do. It is still unclear as to how the payment process; the assessment process and compensation repayments processes will work. “What we do know is that the current processes and procedures of the Workmen’s Compensation Fund are not suitable to manage the domestic sector and employers need the correct information and representation,” says Mr Van der Merwe.
South Africa faces a big challenge when it comes to employers of domestic staff being legally compliant. “Many employers do not understand that the definition of ‘domestic worker’ includes gardeners, nannies, caregivers and chauffeurs employed in private households. To be compliant, employers not only need to register their employees for UIF but must also meet the other requirements stipulated in Sectoral Determination 7 – Domestic Workers, such as contract of employment, method of time keeping, overtime and Sunday time remuneration, recording of all leave types and provision of payslips, just to mention a few. The COIDA is going to be another aspect of non-compliance if not managed properly,” he explains.
Employers also need to understand that they should participate in a collective forum to ensure they are adequately represented at the Department of Employment and Labour (DEL), the South African Revenue Service (SARS) and in legislative matters. “The key is support from an employers’ organisation like NELA. With sufficient representation, we will approach SARS, the DEL and other government departments on behalf of employers,” says Mr Van der Merwe. “There is no reason, for example, why employers of domestic staff should not be able to off-set the cost of employment of domestic workers against their taxable income annually, since it is a substantial amount when the monthly salary, UIF contribution and now the COIDA is taken into account,” he says.
It is anticipated that following the latest ruling, employer organisations will play an increasingly significant role, not only as the voice of the employer, but also as a vital information centre on how to handle these issues. “The current systems can be cumbersome and we believe they need to be more user-friendly to encourage compliance. Fortunately, NELA has an existing platform making the management of domestic staff matters much easier and legally correct,” he says.
Currently commercial businesses pay COIDA fees annually for their employees. Mr Van der Merwe says the domestic staff sector is too fluid for this as it is a highly unregulated sector. “The domestic sector is not the informal sector, as some people refer to it, but a volatile, flexible and huge gear in the economy of South Africa. Why should an employer pay annually for a domestic staff member who may only work for six months of that year? We propose that assessments are done annually but payments made monthly.
“We will be running regular information and training sessions for employers in the new year covering legislative changes as they are revealed and the subsequent implications of these for employers.”
Mr Van der Merwe believes changes in the sector are inevitable and employers need to be prepared on how best to handle these. “Compliance is key and eliminates unnecessary financial risks for employers and friction in the workplace. As an employer, it can be challenging keeping up-to-date on how to remain compliant. That’s why it’s so important to support organisations proficient in doing it for you.”