Supreme Court Sounds Alarm Over Compensation Fund, Urges Independent Probe

South Africa’s highest courts are once again shining a spotlight on how state institutions serve the public and this time, it is the Compensation Fund under scrutiny.

In a judgment that goes beyond a single legal dispute, the Supreme Court of Appeal has raised serious concerns about how the Fund is being managed, suggesting that its current state may be failing the very people it was designed to protect.

A Lifeline Under Pressure

At the heart of the issue is the Compensation Fund, created under the Compensation for Occupational Injuries and Diseases Act. This legislation ensures that workers injured on duty, or families of those who die in the workplace, receive financial support.

It is meant to act as a safety net for employees across industries, from construction sites to transport fleets. For many South Africans, especially those in high-risk jobs, this Fund is not just a benefit. It is a lifeline.

But according to Acting Judge Maake Kganyago, the system behind that safety net is showing signs of strain.

A Case That Revealed Bigger Problems

The court’s concerns emerged during a legal battle involving a transport company, Van der Vyver Transport, which challenged how its contributions to the Fund were calculated.

Under the system, employers pay into the Fund based on their industry risk and claims history. Companies with poor safety records can face increased tariffs, known as loadings.

In this case, the company was hit with a 20 percent loading, later increased to 40 percent due to its accident record. However, the company argued that its safety performance improved significantly over time. Despite this, the higher tariff remained in place for more than a decade.

Attempts to resolve the issue with the labour department reportedly went nowhere. Responses cited missing data, ongoing audits, and systemic failures within the Fund.

While the company ultimately lost its appeal on procedural grounds, failing to meet the strict timelines set out in the Promotion of Administrative Justice Act, the court’s focus shifted to something far broader.

Missing Records And Mounting Frustration

One of the most troubling revelations was the department’s admission that it could not access records older than five years. This meant key data from 2010 to 2018 could not be reviewed, effectively blocking any meaningful reassessment of the company’s case.

For a system that relies heavily on historical data to determine fair contributions, this gap raises serious questions about record-keeping and accountability.

It also reflects a deeper issue that many South Africans will recognise. When public institutions cannot retrieve their own records, it becomes almost impossible for individuals or businesses to challenge decisions or seek fairness.

Call For Independent Oversight

Judge Kganyago did not mince words in his judgment. He described the Fund’s administration as disorganised and unresponsive, pointing out that such inefficiencies are deeply concerning given its constitutional and social role.

The court has now called on independent watchdogs, including the Auditor-General of South Africa and the Public Protector, to consider stepping in.

This is not a routine suggestion. It signals that the issues may go beyond administrative hiccups and could require a full-scale investigation.

Why This Matters Beyond The Courtroom

For workers across South Africa, the Compensation Fund represents security in moments of vulnerability. When someone is injured on the job, or a family loses a breadwinner, the Fund is supposed to step in quickly and reliably.

But cases like this raise an uncomfortable question. If businesses struggle to get answers or corrections, what happens to ordinary workers trying to access their benefits?

The SCA’s remarks may mark a turning point. With independent scrutiny now on the table, there is growing pressure for transparency, better systems, and a return to the Fund’s original purpose.

In a country where workplace injuries remain a reality for thousands, ensuring that this system works is not just a legal issue. It is a matter of dignity, fairness, and trust in public institutions.