Business owners, such as those in the construction sector, require a letter of good standing from the Compensation Fund before they can tender for contracts to show that they are up to date with fund payments.
Business owners claim they are losing business after being denied letters of good standing from the Department of Labour’s Compensation Fund because of disputes relating to unpaid contributions.
But officials at the fund – which provides compensation to employees who are injured at work or fall sick or die as a result of diseases contracted at work – say all is not lost.
Business owners can still obtain the necessary letter by making arrangements to pay off any outstanding amounts owed.
A letter of good standing is required when a business owner tenders for contracts to show that an employer is up to date with their payments to the fund.
To obtain a letter of good standing employers must be registered with the fund and must pay all return of earnings monies due to the fund.
Millicent Skhosana, owner of Lebo and Katli Trading Solutions, said she has been involved in a dispute with the fund since 2013 over an amount of R7 000 which the Compensation Fund billed her for the assessment years of 2009, 2010 and 2011.
“My accountant took the matter up with the (Compensation) fund in July 2013 and again in August 2013 to ask them to review the (assessment) amounts for the years in question.
They said we’ll get a response in four weeks. I am still waiting,” said Skhosana.
Up till now she has only been able to pay the company’s assessment fee for the 2012 year, but not for the 2013 year.
But, Skhosana says she refuses to pay until all the confusion has been cleared up.
“In the meantime I have not been able to get business. I have tendered and all I get back is regret letters.
A letter of good standing is a required document when submitting a tender.
Some of my contracts have also expired and were not renewed.
I have been able to pay salaries, but my business has not grown and is actually going down.”
The Compensation Fund’s director of income Ella Ntshabela said, however, that officials at the fund had not received any request for a revision of assessment of fees from Skhosana.
Ntshabela said in the event of a dispute the employer must apply to the fund in writing on a company letterhead for re-assessment of the fees.
The following must accompany the letter:
- Reasons why the original returns were completed incorrectly or why the online submission was carried out incorrectly.
- An affidavit confirming the information.
- The correct earnings on which the assessments are based.
- Financial statements for the period under review.
Ntshabela said the turnaround time to resolve a query such as this is six weeks.
For business owners who owe outstanding assessment fees, all is not lost.
These business owners can, for a limited period, enter into an arrangement with the fund to pay off amounts owed in installments of under one year.
Under this agreement a 20% deposit of the outstanding amount is required upfront.
A letter of good standing will then be issued on a monthly basis until the amount is settled in full.
Should an employer default on an installment arrangement the full balance must then be paid immediately.
- For more information, visit www.labour.gov.za.