Should the Compensation Fund be privatised?

If I had R10 for every complaint I’ve received pertaining to the Compensation Fund, I would probably be a billionaire by now. Maybe it’s time for the fund to be privatised?

That’s certainly the opinion of Gerhard Papenfus, CEO of the National Employers’ Association of South Africa (Neasa). He reckons it’s the only potential solution … The Compensation Fund has been “in a state of disarray and complete dysfunctionality for a number of years,” says Papenfus. “Employers and employees alike have been suffering under the yoke of an organisation which seemingly has no interest or ability to fulfil its mandate.”

The Association has written to the Compensation Commissioner, as well as the Minister of Employment and Labour, to make them aware of the plight of employers and employees and the dire consequences of the fund not being operational. Neasa has also conducted a survey amongst employers, which highlighted the high level of unhappiness with the way the fund is run. The results of this survey were shared with the Commissioner as well as the Minister of Labour (with no response).

“One would have expected that a government – which portrays itself as a government of the people – would jump at the opportunity to prove this and resolve the pandemic of dysfunctionality, incapability, unproductivity and corruption that have decimated the fund. Instead, the silence has been deafening, and absolutely nothing has been done, nor does there seem to be any intention to address the issue. Maybe the Minister and the Commissioner do not believe or understand how deep the rot really is and believe that the complaints are much ado about nothing,” suggests Papenfus.

But just how bad are things, really? We were sent the details pertaining to one of Neasa’s employees, who was injured on duty in 2014. Despite a whopping 46 interactions with the fund (documents being hand delivered, emails sent etc), the claim has still not been resolved. Papenfus reckons that there are thousands of other similar cases out there.

It can therefore safely be said that the Compensation Fund isn’t in very good shape. What’s the solution? Papenfus believes that the fund is not only totally dysfunctional, but it’s beyond the point where it can be fixed. “Every day that goes by more and more injured employees’ claims are gulped up by the decayed machinery of the fund, most likely never to be seen again. We consequently suggest that the government does the honourable thing and outsources the function to a private organisation that is capable of getting the job done,” he recommends.

This is a suggestion that has been made in various sectors of industry – repeatedly. Take Eskom and SAA as examples. The government doesn’t appear to have an appetite for privatisation. Maybe it can blaze a privatisation trail with the Compensation Fund?