Why a Contractor in South Africa must register for Worker’s Compensation

All employers, as per the Compensation for Occupational Injuries and Diseases Amendment Act No 61 of 1997 (COIDA), must register for worker’s compensation. Any employer who fails to do this is guilty of a criminal offense.

As a result of the implementation of COIDA, the general rights that employees had under common law in suing their employers for losses suffered while employed, have been removed.

The purpose of COIDA in South Africa is to provide employees under a contract of employment with compulsory compensation, although there are a few exceptions, should death or personal injury occur during employment.

This is one of the main reasons why a contractor in South Africa must register for worker's compensation.

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 Events that are covered under COIDA include the following:

  • Accidents that arise out of, and in, the course of the employment of the employee, which result in either injury, illness, or death.
  • Specific occupational diseases which were contradicted in the workplace as a result of exposure of the employee to certain agents or conditions found in the work environment, and
  • Fatal cases where an employee has died as a result of an incident or accident that occurred while they were on duty.

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What is FEM?

The Federated Employer’s Mutual Assurance Company Limited., more commonly known as FEM, was established as a mutual insurer in 1936. With the introduction of the Worker’s Compensation Act in 1941, FEM was provided with a license in transacting workers’ compensation insurance, specifically in the Maintenance and Outsourced Contractor industry.

FEM has provided its services for more than 70 years and operations are confined to the insurance of employers against certain liabilities under COIDA. In addition to covering the Maintenance and Outsourced Contractor industry, FEM also works alongside the State’s Compensation Fund, managed by the Compensation Commissioner.

Through the insurance provided, employees or their dependants are compensated after injuries that have arisen from occupational accidents or injuries that they have suffered during their employment.

FEM can operate in the Maintenance and Outsourced Contractor industry, Class V of the Department of Employment and Labour’s (DoEL) Classification of Industry. With this, it effectively covers the broader context of building/construction as well, including, but not limited to:

  • Building operations
  • Roofing
  • Painting and plastering
  • Swimming pools
  • Electrical
  • Flooring
  • Tiling
  • Plumbing
  • Tunnelling, and more.

Why must employers register with FEM?

New employers who form part of the Maintenance and Outsourced Contractor industry can apply to register with FEM. Those, who are in good standing, can transfer their liability from a State fund to FEM as well.

In registering with FEM, employers can enjoy the following benefits:

  • Ease of Access
  • Letters of Good Standing
  • Information – such as monthly reports, health, and safety information, and more.
  • Merit Rebates
  • Assessment Rates – which are the same as the Compensation Commissioner.
  • Administration – with representatives of FEM who help employers in obtaining the required medical, and other, reports without having to pay additional costs.

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How can SafetyWallet help Employers and Contractors’ Health and Safety Compliance?

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