When an employee is injured on the job, the focus is on immediately getting the appropriate medical attention for the injured worker. Often forgotten at the time are the requirements of the Occupational Safety and Health (OSH) Act and Workmen’s Compensation Act.
According to Section 46 of the OSH Act, fatal and critical injuries must be reported within 48 hours (2 days) of the incident. Other less serious incidents where a person requires medical attention or cannot earn full wages must be notified within 4 days of the occurrence using the prescribed forms.
Notification for Workmen’s Compensation Claims
Employers can use the same forms to notify RMS of an incident, pending completion and submission of Workmen’s Compensation documents. Immediate notification of every incident is an advantage since some injuries, such as those sustained in falls, may not seem serious but may give rise to a significant claim months or even years later. If notification is not given within a reasonable period of the incident, the employer may be in breach of the policy condition for time of notification.
Compensation Payments under the Workmen’s Compensation Act
A worker on injury leave is entitled to compensation under the Workmen’s Compensation Act (“WCA”) representing 2/3rds of their average monthly earnings. Whether by union agreement, contract, company practice or oversight, many companies continue to pay an amount equal to the worker’s normal salary. This has led to considerable confusion on the part of the injured worker and to High Court Actions regarding whether payments made were for wages or compensation.
There are no statutory deductions for payments of compensation. It is therefore imperative that processes are reviewed to ensure that Health and Safety officers advise Human Resources and the Payroll department of the worker’s injury leave and that a change in the basis of payment from salary to compensation is made with no statutory deductions. Since many companies have adopted direct bank deposits for payroll, it is difficult to obtain a signed voucher as acknowledgement of compensation from the injured worker at the time of payment, however this needs to be obtained as soon as practicable. If these vouchers are not signed, the injured worker can make a case in the future against the employer for non-payment of compensation.
Permanent Partial Disability Payments
Some companies pay compensation based on the worker’s total salary. Whatever the payment made by the employer, insurers will only make reimbursements based on the two-thirds average monthly earnings of the injured worker outlined in the Workmen’s Compensation Act. However, there is a more important consideration.
When an employee is assessed with a Permanent Partial Disability (“PPD”) by a medical referee or a medical practitioner, any compensation paid to date is considered when calculating the Permanent Partial Disability settlement. This is the time that the difference between payment of compensation or wages becomes crucial. If the company is deemed to be paying wages, no deductions are made from the PPD settlement. If the company was paying compensation, then up to the 50% of the PPD assessment can be deducted because of the compensation that was already paid.
The payment of compensation does not relieve the company from legal action by the injured worker. Injured workers receiving compensation often file actions alleging negligence by their employer for their injury. If the High Court finds in the worker’s favor, any award considers payments already made as compensation.
If however, it is found that wages, not compensation was paid, then no deductions from the High Court award will be made. In such a case, there is a danger that the combined claims under the policy will exceed the workmen’s compensation policy limit, leaving the company to pay the difference.
Lessons for Employers
⦁ Notify OSH and RMS of employment injuries within the specified timeframes
⦁ Pay injured workers compensation according to the Workmen’s Compensation Act – i.e. without statutory deductions
⦁ Obtain signed vouchers from the injured worker acknowledging payment of compensation in lieu of wages
For further information and copies of leaflets for supervisors and workers on workmen’s compensation payments, please contact your RMS representative.
INSURANCE COVERAGE – WORKMEN’S COMPENSATION
A Workmen’s Compensation Policy is a legal requirement for every employer. If you don’t have this coverage or would like to consider your options, contact us to learn about how RMS can provide a tailored solution for your business.