In our bulletins dated 15 February 2021 and 23 February 2021, Amendment to the National Minimum Wage and Calculation of the National Minimum Wage for Domestic Workers, we set out the amendments to the national minimum wages contained in Schedule 1 and 2 of the National Minimum Wage Act, 2018, effective from 1 March 2021. In the second bulletin, we explained how the minimum wage of a domestic worker should be calculated.
The focus of this bulletin is on the position of domestic workers under the Compensation for Occupational Injuries and Diseases Act, 1993, known as “COIDA”.
Prior to 1 January 1994, common law of contract was the source of rules governing the relationship between a domestic worker and an employer. Domestic workers were not regarded as “employees” for purposes of any statutory protection. Generally, the only recourse available to a domestic worker was to institute a claim in the Small Claims Court.
The first significant step towards extending protection to domestic workers was taken when the Basic Conditions of Employment Act of 1983 was extended to the domestic service sector on 1 January 1994. From then, domestic workers became entitled to the basic terms and conditions of employment prescribed in that Act and now in its successor, the Basic Conditions of Employment Act, 1997. The 1997 BCEA defines a domestic worker to mean an employee who performs domestic work in the home of his or her employer and includes a gardener, a person employed by a household as a driver of a motor vehicle and a person who takes care of children, the aged, the sick, the frail or the disabled but does not include a farm worker. A similar definition is found in Schedule 1 of the National Minimum Wage Act, 2018.
Similarly, the 1956 Labour Relations Act excluded domestic workers from its application. Its successor, the Labour Relations Act, 1995 was made applicable to all employees (except for soldiers and spies!). In so doing the exclusion of domestic workers fell away and all the protections afforded to employees under the LRA became available to domestic workers. Of particular importance in this regard is of course the unfair dismissal regime.
Domestic workers were also excluded from the operation of the Unemployment Insurance Act, 1966. But UIF benefits were extended to them under the Unemployment Insurance Act, 2001 when the Act came into effect in 2002.
Compensation for Occupational Injuries and Diseases Act, 1993
Despite domestic workers being afforded protection in terms of the Occupational Health and Safety Act, 1993, domestic workers were excluded from compensation for injuries or illness sustained at work provided to other employees under COIDA.
COIDA seeks to provide a regulated system of “no fault” compensation for work related deaths, injuries and diseases. But, as the Act stands, domestic workers are excluded from the definition of “employee” and therefore from the application of the Act.
On 19 November 2020, however, in its landmark decision in Mahlangu and Another v Minister of Labour and Others, the Constitutional Court confirmed the order of the High Court, namely that section 1(xix)(v) of COIDA was unconstitutional to the extent that it excluded domestic workers in private households from the definition of “employee” and effectively denied them compensation in the event that they contracted diseases or suffered disablement, injuries or death in the course of their employment. The Constitutional Court held that this order would have immediate and retrospective effect from 27 April 1994.
Amending legislation has been introduced in Parliament. In the meantime, on 10 March 2021, the Compensation Fund Commissioner issued a Notice on the Registration of Domestic Worker Employers in terms of section 80 of COIDA. The Notice sets out what employers of domestic workers must do now. This is what we explain in what follows.
Registration, Assessment and Reporting Obligations
- Employers are now required to register their domestic workers with the Compensation Fund.
- The documents that must be submitted for employer registration purposes includes
- a completed CF-1E Form - Application for the registration of the domestic worker employer (this form can be accessed here);
- a copy of the identification/passport/work permit of the employer;
- proof of the employer’s residential address;
- a copy of the identification/passport/work permit of the employer;
- a copy of the employment contract.
- Applications can be sent to RegistrationCF@labour.gov.za or CFCallcentre@labour.gov.za.
- Register or record
- An employer is also required to keep a register or other record of the earnings and other particulars of all of its employees (including domestic workers).
- This register or other record must be retained by the employer for a period of at least four years, following the last date of entry in that register or record.There is no prescribed form.
- An employer is required to pay an amount that has been determined by the Compensation Fund following an assessment of the employer’s annual statement of earnings.
- The assessment paid by employers to the Compensation Commissioner is determined by two principal factors –
- the remuneration paid to employees; and
- the class of industry in which the employer operates.
- Once the Commissioner has received the relevant information concerning the amount of earnings, the employer is assessed in accordance with a fixed tariff which delineates the tariffs for specific industries.
- Employers are required to submit a Return of Earnings on an annual basis. The first return will be required to be submitted as soon as the ROE Online System platform opens between 1 April and 31 May 2021. The earnings declared will be based on the salaries including benefits paid during the period under review.
- Employers will be able to submit their return of earnings online by first registering as a user on the Department of Employment and Labour’s online services platform (www.labour.gov.za select Online Services, select ROE Online or cfonline.labour.gov.za).
- The Compensation Fund review period is from the first of March to the 28th February of the following year.Employers will be required to declare the actual earnings paid and to estimate their domestic employee/s’ earnings for the following year.Employers must ensure their contact information is correct for purposes of receiving invoices which are required to be settled within 30 days to avoid interest penalties.
A most important consequence of the Court’s ruling is that employers are now protected against any liability to an employee or his or her dependants in respect of any occupational injury or disease resulting in the disablement or death of the employee. It replaces an employee’s right to claim compensation from his or her employer with a system of “no fault” compensation.
In its reasoning, endorsed by the Constitutional Court, the High Court made it clear that the purpose was to provide relief to domestic workers who were injured or who had died at work prior to the granting of the order.
Although COIDA has not yet been amended, the Court’s decision means that employers are now required to register their domestic workers with the Compensation Fund and to submit the return of annual earnings. The Notice tells us how to go about this. Registration will protect both employees and employers. There can be no obligation to pay any assessments until the Commissioner has issued an assessment.
The Constitutional Court decision is thus a significant milestone in terms of addressing and rectifying the historic, and continued, vulnerable and unequal position that domestic workers find themselves in.
In our next bulletin we will look more closely at the rights and obligations of employers in respect of their domestic workers under the Unemployment Insurance Act, 2001.
This bulletin was prepared by counsel Nigel Carman, associate Andi Michalow an candidate attorney Thabang Nthatisi.