Sick miner to challenge'pittance' in Appeal Court.
Mining industry abuzz as AngloGold faces R2.7m claim for worker's ruined health. The Sunday Times. 28 February 2010. 

By Rob Rose

A miner suffering with silicosis and paid only R16320 to disappear will challenge AngloGold Ashanti in the Supreme Court of Appeal on Thursday in a high-stakes case for the mining industry. Thembekile Mankayi, who worked for AngloGold for 16 years between 1979 and 1995, was booted out "as a result of his medical condition". That medical condition, first diagnosed as tuberculosis in 1993 while silicosis and "obstructive airways disease" were added later, came from working in AngloGold's mines. Lawyer Richard Spoor, a long-time nemesis of the Anglo American group, said "exposure to harmful silica dust and gases (in AngloGold mines) caused or materially contributed to the fact that he developed tuberculosis, obstructive-airways disease and silicosis". Mankayi, who has only ever worked as a miner or manual labourer, has only a Standard 5 education. Spoor argues that because of his illness, he is disabled and will in all likelihood "remain unemployed for the rest of his life". He has been claiming an extra R2.7-million in damages from AngloGold, but he was thwarted in the High Court in Johannesburg in June 2008 on a technical legal point. Now, he is appealing the case to the Supreme Court of Appeal in Bloemfontein, which will be heard this week. AngloGold is arguing that Section 35 of the Compensation for Occupational Injuries and Diseases Act effectively takes away an employee's common-law right to sue his employer for damages. But the outcome of Thursday's Supreme Court hearing could result in a swing of many millions of rands in the profit statements of big mining companies. In its heads of argument prepared for next week's case, AngloGold said if Mankayi was right, then it would "result in a very substantial increase in liability for mine owners". AngloGold said it could lead "to the premature closure of more marginal mines and thus leading to hardship on the part of employees". Spoor, something of a scourge of the mining industry, is no stranger to precedent-setting legal cases. In 2003, he spearheaded litigation that resulted in Gencor agreeing to pay compensation of R490-million to victims of asbestos-related diseases. Much of next week's argument will hinge on a complicated but important legal point, highlighting the schizophrenic legal regime for people who contract diseases at work. Mankayi got a meagre R16320 from a compensation fund to which mines contribute in terms of the Occupational Diseases in Mines and Works Act (Odimwa), which regulates how mines deal with lung diseases. But while this law caps payments for lung disease in miners to R2000 a month (an amount not increased since 1993), other industrial workers can claim up to R13394 a month under the Compensation for Occupational Injuries and Diseases Act. Even though Mankayi was not compensated under this act, AngloGold argued successfully in the High Court that Section 35 of that law deprived him of his right to sue for damages. Spoor argues that if the decision stands, it discriminates against mineworkers - the very people who are most at risk of getting lung diseases at work. He argues that it would be particularly "harsh" on mineworkers like Mankayi, who have sacrificed their health and their lives for the mining industry only to be discarded with a tiny payout. Spoor said this week that this was a perverse incentive for the mining industry to avoid fixing anything. "As long as it is cheaper for the mining industry to continue compensating mineworkers than it is to take the steps to prevent disease, the industry will continue to cripple and maim mineworkers on an industrial scale," he said. But in its court papers, AngloGold countered that it would be "harsh to require of mines that they pay levies to a compensation fund, and yet receive no benefit in the form of statutory protection against (claims)". Other mining companies will be watching this week's case closely, partly because there are many such damages cases in the wings.
Anglo American itself faces at least eight such claims and, in a letter to Mankayi's lawyers in May 2007, its lawyers said that a "decision in favour of (Mankayi) will therefore also be decisive as far as it concerns those eight matters". Mankayi's lawyers responded: "There are tens of thousands of ex-goldmine workers in the position of Mr Mankayi ... we confirm that we represent several hundred such workers and, depending on the outcome of this case, many new claims may be filed." Given the high stakes, the Supreme Court's decision is unlikely to be the end of the story. Spoor says Mankayi will approach the Constitutional Court if he fails in Bloemfontein, arguing that the current laws governing compensation payable to sick mineworkers is "discriminatory". Equally, AngloGold is likely to want to fight the case for an outcome favourable to it. 

Court rules in favour of AngloGold in R2,7m silicosis case. Mining News of 27 June 2008. 'The Johannesburg High Court, on Thursday, ruled in favour of gold-miner AngloGold Ashanti in terms of a R2,7-million occupational health disease claim lodged by a former employee, Thembekile Mankayi. The ruling had also settled a dispute on whether mineworkers, who had already been compensated under the Occupational Diseases in Mines and Works Act (Odimwa), could be able to claim compensation from their employers. The case was seen as a test case and had the potential to open mining companies to thousands of lawsuits said to be worth millions of rands. In February, the High Court held hearings in which the relationship between the Odimwa and the Compensation for Occupational Injuries and Diseases Act (Coida) were in dispute. AngloGold Ashanti and Mankayi's counsels had had differing interpretations of section 35 of Coida, and whether or not mineworkers who had contracted occupational lung diseases such as silicosis, were barred from suing their employers. Mankayi's counsel had argued that their interpretation of the act would allow him to claim for enhanced compensation, including future loss of earnings, and future medical cost coverage, as he was compensated under an entirely different act, the Odimwa. In opposition, AngloGold Ashanti's counsel said that the two pieces of legislation had been intended to be read together. AngloGold Ashanti, on Thursday, commented that the ruling confirmed that employees who qualified for benefits in respect of Odimwa could not, in addition, lodge civil claims against their employers in respect of their relevant conditions AngloGold Ashanti said it considered the finding to be fully in line with compensation law. "We believe that the social contract implied by the Odimwa and similar statutory compensations systems, where employees afflicted by occupational injuries and illnesses receive a predetermined compensation without having to suffer the expense and inconvenience of prosecuting legal actions, and in return waive the right to civil claims, is a just one, offering easier access for employees and greater certainty for employers," the company said in a statement. Attorney Richard Spoor, who represented Mankayi, was not immediately available to comment on the ruling. "This case is an attempt to deal with far deeper and more fundamental problems. We are doing this to attach a certain value to human life and human health, because the current system attaches no value to life. It is bad and defective and it has to be fixed, but if you fix it, it will be expensive," Spoor told Mining Weekly Online in an interview earlier this year. At the time, he said that the objective of the hearing had been to clear the way to file class-action lawsuits and force the mining companies into a settlement. Mankayi had lodged the R2,7-million claim after he had received a lump sum of R16 316 under the Odimwa as compensation after being dismissed from the gold mines where he had worked for 16 years, on the grounds of medical incapacity. Mankayi had worked at AngloGold Ashanti's Vaal Reefs mine in the 1990s

Liabilities and legal claims arising out of industrial accidents and diseases

Author / Deneys Reitz Contact: Derek Wanblad

Paper delivered at Deneys Reitz Insurance Seminar on 13 September 2005

INTRODUCTION

This paper provides a general overview of the rights of employees to institute claims against employers for damages sustained as a result of death or bodily injury that occur in workplace accidents.

It also aims to provide general comment on the extent to which Insurers may have exposure in terms of employer liability policies and indeed whether there is a need for such a policy in the light of the cover and protection provided to employers by the provisions of the Compensation for Occupational Injuries and Diseases Act 1993 (“COIDA”) and other Workmens’ Compensation Legislation.

The issues raised in this paper may at first blush seem uncomplicated, but in an ever increasing environment of mergers, acquisitions and where outsourcing of businesses and services is the rage, the question of who bears legal liability when things go wrong is not so easily answered. By way of example, one only needs to look at the recent series of explosions at Sasol Plants in Secunda and Sasolburg where, in a period of six months, there were six explosions in which several lives were lost and approximately one hundred persons injured in varying degrees. A number of the injured and deceased employees were employees of Sasol, but there were equally a number of contractor and sub-contractor employees as well as employees supplied by labour brokers who were also killed and injured.

In dealing with the above aspects, I will briefly cover:

- The provisions of COIDA.

- The extent to which Insurers may have exposure, in terms of employer liability policies having regard to the following scenarios:

a) the position of an employee supplied by a labour broker.

b) Employee to employee liability. Is an employee precluded from instituting a claim against a co-employee? 

Finally, I briefly consider the cover and protection provided by the Occupational Diseases in Mines and Works Act 1973; the extent to which it overlaps with workmens’ compensation legislation and the insurance industry’s potential exposure where liability policies do not exclude liability for occupational diseases such as asbestosis and silicosis.

COIDA

At common law an employee has a right to institute a delictual action against his or her employer for compensation. There is also a common law right to a safe working environment. This basic right is further supplemented by Health and Safety legislation.

COIDA provides a system of no-fault compensation for employees who are injured in accidents or who sustain occupational diseases, arising out of and in the course of their employment.

Although COIDA provides a system of no-fault compensation, negligence nevertheless continues to play a role, since an employee is entitled to additional compensation if it can be established that the injury was caused by the negligence of the employer or certain categories of managers and fellow employees.

COIDA provides that the employee may claim compensation from a central fund established in terms of the Act to which all employers are required to contribute.

COIDA provides for compensation to be paid to employees who suffer temporary or permanent disablement and the dependents of employees who die as a result of injuries sustained in workplace accidents.

COIDA removes the common law right of the injured or ill employee to claim damages from his/her employer in a court of law. Instead the claim for compensation is addressed to the Compensation Commissioner. Section 35 of COIDA provides:

"Substitution of compensation for other legal remedies -

(i) No action shall lie by an employee or any dependent of an employee for the recovery of damages in respect of any occupational injury or disease resulting in the disablement or death of such employee against such employee’s employer, and no liability for compensation on the part of such employer shall arise save under the provisions of this Act in respect of such disablement or death.

(2) For the purposes of sub-section (1) a person referred to in Section 56(1)(b), (c), (d) and (e) shall be deemed to be an employer."

The benefits of COIDA are only applicable to employees. An employee is defined to be any person who has entered into a contract of service, apprenticeship or learnership with an employer. There are certain exclusions to the definition of an employee, such as those persons belonging to the South African National Defence Force and South African Police Services. An independent contractor is regarded as an employer in his/her own right and is also excluded from the definition of an employee.
The prohibition on employees and the dependents of employees instituting an action against an employer covers both claims based on an employer’s vicarious liability for the acts of employees and claims occasioned by the employer’s own negligence. All claims for damages are excluded, including those for pain, suffering and loss of amenities of life. However, an employee is not prevented from claiming damages from the employer where the accident is a result of the deliberate wrongdoing of the employer. Such an action was considered by the court in the matter of Kau v Fourie 1971 (3) SA 623 (T).

In the Kau case, the court considered whether an employer could be held liable for assaulting his employee with an iron rod after the employee, in the course of the performance of his duties, damaged his employer’s motor vehicle. The employee had received an amount as compensation from the then Workmens’ Compensation Commissioner and thereafter claimed damages from his employer. The employer pleaded that the employee could not institute an action against him in the light of the provisions of Section 7(a) of the Workmens’ Compensation Act 1941, which is the equivalent of Section 35(1) of COIDA. The court held that in order for this section to apply, the accident or injury must have arisen out of the employee’s employment.

In other words, there needs to be a causal connection between the accident and the employee’s employment. In the light of the fact that the assault with the iron rod had nothing to do with the employee’s employment, the court had little difficulty in finding that the employee was entitled to institute a damages claim against the employer.

EMPLOYEE SUPPLIED BY A LABOUR BROKER

Where employees are supplied by a labour broker to a client, the question that arises is who is that employee’s employer?

Where such an employee is remunerated by the labour broker, he or she for the purposes of COIDA is regarded as an employee of the labour broker. However, where the client of the labour broker and not the labour broker remunerates the employee, it is the client who is regarded as the employer. In the former instance, the employee would not be precluded from proceeding against the client for damages in terms of the common law. In the latter instance, the employee would be precluded by Section 35 of COIDA from proceeding against the client.

The position vis-à-vis contractors and sub-contractors is more straight forward. With reference to the Sasol example mentioned above, the employees of Sasol or its contractors or sub-contractors injured in the recent explosions may not in terms of COIDA recover damages from their respective employers. Obviously, the injured employees could institute civil actions against parties other than their employers where those third parties’ conduct was negligent and caused the damages which they sustained. For example, employees of Sasol could institute an action against a Sasol contractor where injuries and damages were sustained as a result of the negligent conduct of that contractor or its employees for whom it is vicariously liable.

EMPLOYEE TO EMPLOYEE LIABILITY

The provisions of Section 35(2) read with Section 56 of COIDA are important as Section 35 extends the definition of an employer to certain categories of persons referred to in Section 56 of COIDA. These are:

- An employee charged by the employer with the management or control of the business or of any branch or department thereof;

- An employee who has the right to engage or discharge employees on behalf of the employer;

- An engineer appointed to be in general charge of machinery, or a person appointed to assist such engineer;

- The person appointed to be in charge of machinery in terms of any regulation made under the Occupational Health and Safety Act 1993.

The persons referred to in Section 56 are generally those in management positions. COIDA precludes claims by an injured employee against these categories of persons.

COIDA does not preclude a claim by an employee against a fellow employee who is not in a management position referred to in Section 56. For example, if a non-managerial employee drops a spanner on a colleague’s head or causes injury to a colleague by some other means, such employee would be entitled to institute a civil action where they can establish negligence.

EMPLOYER'S LIABILITY COVER

The usual form of employer’s liability policies provide for a general indemnity to the Insured who may become legally liable to pay damages consequent upon the death of or bodily injury to or illness of any person employed by the Insured and where such injury or illness arises out of and in the course of employment.

Policies of this nature may also provide for certain exclusions and for an additional indemnity as though a separate policy had been issued, to certain categories of persons such as partners, directors, member or employees of the Insured.

The effect of COIDA on an employer liability policy is:

- COIDA precludes claims by an employee against an employer in respect of any occupational injury or disease. Employers’ liability cover provides indemnity against death or bodily injury or illness of any person employed under a contract of service or apprenticeship with the Insured, which occurred in the course and in connection with such person’s employment by the Insured. The indemnity offered to an employer in terms of employer liability policies is for all practical purposes, the same protection afforded to employers in terms of the provisions of COIDA. It is therefore unlikely that an employer would have to seek indemnity under the employer’s liability section of a public liability policy for a claim against it by an employee.

- However, COIDA does not preclude claims by employees against fellow employees in the circumstances discussed above. Where employer liability policies make provision for the extension of indemnity at the request of the Insured to an employee of the Insured, that employee would be entitled to an indemnity under the policy against any claim for which the Insured would be entitled to indemnity under the policy.

OCCUPATIONAL DISEASES AND MINE AND WORKS ACT 1973

ODMWA provides for the payment of compensation for diseases contracted by persons employed in controlled mines and related works. Most mines in the mining industry are “controlled” and therefore subject to the provisions of ODMWA. ODMWA covers a wide range of cardio-respiratory diseases that employees in the gold, coal and other mining industries may be or have been exposed to.

Over the past couple of years there has been a marked increase in litigation and claims being made by employees who allegedly suffer from cardio-respiratory diseases such as silicosis, asbestosis and other fibroses of the lungs as a result of exposure to and inhalation or ingestion of silica dust or asbestos fibres as the case may be. Claims of this nature have and will continue to have a significant impact on a number of issues, which issues will impact not only on the applicability of Workmens’ Compensation legislation, but importantly for Insurers, policy coverage considerations.

Insurance arrangements will be an important consideration in relation to the formulation of claims. It may well be that a claim may fall to be indemnified under a normal public liability policy, an employer’s liability policy or a professional indemnity policy. The determination of which policy should respond will have important consequences such as:

- Is cover written on an occurrence basis or a claims made basis?

- Whether the claim as formulated, which could be made by individuals or by way of a class action, are separate occurrence or are a single occurrence. This has important consequences with regard to deductibles as well as exposure to different layers of insurance.

Two issues that have been extensively canvassed in the asbestos litigation in South Africa, but which have as yet not been resolved are:

- Whether the reference in Section 100(2) of ODMWA to “any other law” precludes a common law claim by an employee or the dependence of an employee against an employer.

- Whether, if Section 100(2) does not preclude a common law claim, such a claim would nevertheless be precluded by Section 35 of COIDA.

Section 100 of ODMWA provides:

"(1) No person shall be entitled to benefit under this Act in respect of any disease for which he has received or is still receiving full benefits under the Workmens’ Compensation Act, 1941 (Act No. 30 of 1941).

(2) Notwithstanding anything in any other law contained, no person has a claim to benefit under this Act in respect of a compensatible disease as defined in this Act, on the ground that such person is or was employed at a controlled mine or a controlled works, shall be entitled, in respect of such disease, to benefit under the Workmens’ Compensation Act, 1941 (Act No. 30 of 1941), or any other law."

The definition of the word “law” in the interpretation of Statutes Act 1957 excludes the common law. There have been a number of cases in which reference to the word “law” in the Statute has been held to refer to as statutory enactment and not to the common law. One of the well known guidelines to the interpretation of statutes is that in the absence of a specific provision, one cannot infer that a statute intends to alter the common law. Whilst there are arguments to the contrary, it is unlikely that a court will find that Section 100(2) of ODMWA removes an employee’s right to proceed with a common law claim for damages against an employer.

The more difficult question is: if an employee is entitled to proceed against an employer at common law for damages arising out of a disease covered by ODMWA, will such a claim be precluded by Section 35 of COIDA? There are arguments both ways. One could argue that, inasmuch as ODMWA provides a scheme for compensation outside of COIDA, an employer’s liability for common law damages arising out of the diseases covered by ODMWA, should be determined with reference to ODMWA and not COIDA. Against this is the fact that such an argument requires reading in an exclusion into Section 35(1) of COIDA, to the effect that the words “no action shall lie by an employee …” does not include claims by employees suffered from diseases which fall within the ambit of ODMWA. There are no definitive answers at this stage. The debate could be the subject matter of a paper on its own. It will suffice to say that a defence to a claim for damages by an employee arising from an occupational disease that the employee is precluded from proceeding against his or her employer by either the provisions of ODMWA or COIDA, will probably not succeed.

This debate will have important consequences for insurers. Where a policy is written on a claims made basis, the underwriter in the year in which the claim is made may be faced with an enormous claim for damages arising out of these cardio-respiratory diseases, which have developed over many years and which may have been due to practices which were discounted years previously. There is a real possibility of such claims arising and to the extent that insurers have not already done so, where policy wording is wide enough to include liability for occupational diseases, consideration should be given to excluding such occupational diseases from the policy wording.

Insurance arrangements in cases of this nature will no doubt be complex and span a number of decades. It may well not be possible for insurers to make any decisions on policy coverage and indemnity until specific cases have been heard and judgments delivered. At the end of the day, this is the challenge that lies ahead for our courts, insurers and their insureds.

Worker compensation in South Africa under review

The South African mining industry and the people it employs have historically faced unequal and inappropriately diverse regulation of compensation for illness, injury and disablement. This legislation is currently under review. From the company’s perspective, the objective of the review, in which it proposes to become extensively involved, is the development of legislation that provides for compensation that is fair and which seeks to promote the long-term viability of the mining industry.

Compensation for occupational diseases and injuries is currently provided for in South Africa by two different statutes – the Compensation for Occupational Injuries and Diseases Act (COIDA) and the Occupational Diseases in Mines and Works Act (ODMWA). ODMWA covers Occupational Lung Disease (OLD) in miners only. COIDA provides for compensation of occupational injury in all industries (including mining) and for occupational disease in all industries (except mining) as well as for certain occupational diseases not covered by ODMWA, such as noise induced hearing loss.

There are differences in both the application of and benefits paid in terms of COIDA and ODMWA. The South African Cabinet has recognised this anomaly and decided, in 1999, to seek greater uniformity between the two Acts. This is now in process and a framework for the new Act has been developed by the Department of Labour. The framework is expected to be presented to Parliament during 2007 and will then move on into a deliberation phase, where the stakeholders (state, labour and employer organisations) in the National Economic Development and Labour Council (NEDLAC) will make comments and contribute to the continuing debate. AngloGold Ashanti, through the Chamber of Mines and Business Unity South Africa (BUSA), will participate in this process.

The two Acts are quite different. ODMWA is almost 100 years old and was last amended in 1994. COIDA is more recent (an entirely new Act was promulgated in 1993) and is more consistent with the ILO Convention 121, on Worker Compensation. Nonetheless, both Acts require review and, where necessary, reformulation and drafting. The table below illustrates some of the main differences between COIDA and ODMWA. According to Dr Dave Barnes, Manager Occupational Health, ODMWA is more user friendly than COIDA. It provides for free, biennial medical examination (by State hospitals) of ex-miners, in order to determine whether they are suffering from an occupational disease. This is important as many occupational diseases (especially of the lungs) take years to develop and often only become apparent in retirement. COIDA has no such provision. In terms of COIDA, potential claimants must pay a private doctor for medical examination in order to make a submission for compensation, if due. ODMWA also provides for post mortem benefits and a deceased miner’s estate is compensated if occupational lung disease is found to be present, even if the disease did not cause death. COIDA does not have such a provision.

However, ODMWA pays lump sum benefits only, while COIDA pays lump sums for permanent disability (PD) below 30% and pensions if the PD is ascertained to be greater than 30%. Benefits paid in terms of COIDA are generally more generous than those of ODMWA and an earlier degree of disease is compensable in COIDA. This may mean that a miner, with the same degree of occupational lung disease as a non-miner, may not be compensable, but his non-mining colleague would be.

Worker Compensation law in South Africa and many other jurisdictions is based on the presumption that, where an individual is a member of a statutory contributory compensation scheme, that person surrenders his or her common law right to compensation for injury or illness, that arises from work. In this situation, the law should provide for quick and fair compensation – financed through mandatory employer premiums. Compensation entitlement should be consistent with the intention of the ILO Convention on Worker Compensation.

Achieving a balanced solution which offers fair compensation but which also ensures the sustainability of the industry will require a balanced approach.