Is a Contractor in South Africa liable for Workman’s Compensation?

Contractor Liability

As per Section 22 of the Compensation for Occupational Diseases Act, No. 130 of 1993, more commonly referred to as COIDA, all employees have the right to compensation. This compensation comes into play when employees incur an injury on duty, are disabled, or become ill, as a result of a workplace accident or related disease.

The simplest definition of an occupational disease is one that arises out of and can be contracted during an employee’s employment, as listed in Schedule 3 of COIDA.

In South Africa, the contractor is regarded as the employer, and thus they are liable for Workman’s Compensation.

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What does COIDA say about Contractors?

In broad terms, an employee can be defined as a person who has entered a contract of service with an employer. Where independent contractors are concerned, however, the position is viewed differently.

According to Section 89(1)(a) of COIDA, should a person (the mandator) in the course of, or for their business, enter an agreement with any other person (the contractor) for either the execution by or under the supervision of the contractor of the whole, or any part, of any work which is undertaken by the mandator, the contractor shall, in respect of his employees who are employed in the execution of the work concerned, register as the employer as according to the provisions of this Act and pay the necessary assessments.

In addition, Section 89(1)(b) of COIDA also states that should the contractor fail to meet their obligations in terms of the Act, the employees will be deemed as employees of the mandator. Thus, the mandator shall pay the assessments about the employees in question.

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What happens if the mandator pays an assessment for which they are not liable?

According to Section 89(2) of COIDA, provision is made for events where the mandator has paid assessment or compensation for an injury on duty for which they would not have been liable. This should the contractor have complied with their obligations under COIDA. 

As such, the mandator may then recover such an assessment or compensation from the contractor. This amount may also be set off by the mandator against any debt which is owed to the contractor in question.

Contractor liable for Workman's Compensation

Who is liable for compensation?

In determining this, it is firstly essential to determine who the employer is. Should the independent contractor be considered the employer, Section 89 of COIDA will apply.

Public Liability

Where this is concerned, the general law is that even though an employer could be held vicariously liable if their employee is at fault, the employer is not held responsible for the negligence involved with an independent contractor, which has been appointed to perform specific work for the employer.

The employer is tasked with exercising the degree of care that is demanded by the circumstances and therefore not obligated to take further steps than is required in guarding against any foreseeable harm to the public.

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Posted date: 6th May 2022
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