Cross-Border Coverage: When Are Employees Working Abroad Protected Under COIDA?

Scenario: A Client’s Dilemma

Imagine one of your clients, a South African-based manufacturing company, assigns an employee to oversee a temporary project in Kenya. During their assignment, the employee is injured in an accident while on duty. The employer reaches out to you, their trusted advisor, with pressing questions: Is this employee covered under the Compensation for Occupational Injuries and Diseases Act (COIDA)? What steps should the company take to ensure compliance?

This scenario isn’t uncommon in an increasingly globalised economy, where businesses regularly send employees across borders. As members of CIBA, understanding the fine points of COIDA is essential for guiding clients on their obligations and employees’ rights when working out of the country.

What Does COIDA Say About Employees Working Outside South Africa?

COIDA is the cornerstone of compensation law in South Africa, providing protection for employees injured or who contract diseases during the course of employment. When employees work outside the borders of South Africa, the Act continues to offer protection under specific circumstances.

Here’s how COIDA applies:

1. Temporary Assignments Abroad
   If an employer’s primary operations are based in South Africa, and an employee, ordinarily employed in the country, is temporarily sent to work abroad, the employee is still covered under COIDA.

• Key Limitation: This coverage extends for up to 12 months of continuous employment outside South Africa unless an agreement is reached between the employer, the employee, and the Director-General to extend the coverage.

• Compensation Basis: The employee’s compensation will be calculated based on their South African earnings, even if they earn a higher salary abroad during the assignment.

2. Employees on the Continental Shelf
   Employees working in areas like oil rigs or on the continental shelf (e.g., maritime operations) are treated as though their employment occurred in South Africa. This ensures that employees working in challenging offshore conditions are not left without compensation coverage.

3. Foreign Employers Operating in South Africa
   If a foreign employer assigns an employee to South Africa, COIDA does not automatically apply. For the employee to be covered, the employer must enter into an agreement with the Compensation Commissioner and pay the necessary assessments.

4. Dual Jurisdiction Claims
   If an accident occurs in a foreign country where the local laws also provide compensation, the employee must choose whether to claim under COIDA or the foreign jurisdiction. A written election must be submitted to the Director-General. Advising clients to weigh the benefits of both systems is crucial in these scenarios.

5. Seamen and Airmen
   Employees working on South African-registered ships or aircraft are covered under COIDA irrespective of where they are stationed. If employed on a foreign vessel or aircraft but temporarily working in South Africa, they may only be covered if their employer complies with COIDA registration requirements.

Practical Guidance for CIBA Members

As business advisors, your role extends beyond compliance audits to proactive client education. Here’s how you can assist your clients:

• Understand COIDA Requirements: Familiarise yourself with Section 23 of the Act, which outlines the conditions for employees working outside South Africa.

• Encourage Employer Registration: Ensure your clients register with the Compensation Commissioner and remain up to date with assessments, especially if their workforce frequently operates abroad.

• Review Employment Contracts: Advise clients to include clauses about COIDA coverage for employees on foreign assignments.

• Facilitate Agreements: Help clients liaise with the Director-General if they need to extend coverage beyond the 12-month limit.

• Manage Dual Coverage Risks: Assist clients in understanding the implications of employees electing between COIDA and foreign compensation systems.

Conclusion

Your clients rely on you to navigate the complexities of compliance. When employees are sent abroad, COIDA provides a framework for their protection, but only when employers meet specific conditions. By offering guidance rooted in the Act, you empower your clients to protect their employees while ensuring legal compliance.

---

Join us for a Webinar on the topic of Ensuring Compliance with Government Departments: UIF, COIDA, and SDL October 2024 here.

🎓 Webinar: Ensuring Compliance with UIF, COIDA, and SDL – October 2024 📅

💡 Equip yourself with essential compliance knowledge
Are you navigating the complexities of UIF, COIDA, and SDL? Join our expert-led webinar to master the key provisions, deadlines, and processes necessary to ensure your business or clients remain compliant with government regulations.

🔑 What you'll gain:
✅ Comprehensive understanding of UIF, COIDA, and SDL legislation
✅ Techniques to calculate contributions accurately
✅ Insight into critical filing timelines to avoid penalties
✅ Practical guidance for claiming benefits under UIF, COIDA, and SDL
✅ Awareness of the consequences of non-compliance

👨‍🏫 Presented by:
Sydney Zizipa, CGMA
A seasoned Chartered Management Accountant and business leader, Sydney brings extensive expertise in financial reporting, compliance, and business strategy.

🗓 Details:

• Date: Available from 23 October 2024

• Category: Financial Reporting (Moderate level)

• CPD Units: 3

• Price:

  • Adhoc: R375.00 (VAT Incl.)

  • FREE for Accountant in Practice subscribers

📚 Content Highlights:

• The foundations of UIF, COIDA, and SDL

• Legal frameworks and administrative guidelines

• Filing returns and managing claims

• Understanding the Ufiling system

• Avoiding penalties through timely submissions

📜 Bonus: Earn a certificate with 3 CPD units in Financial Reporting!

🚀 Don’t miss this opportunity to stay compliant and safeguard your business!
👉 Register Now