- High Court finds Rand Mutual underpaid a mineworker by incorrectly calculating compensation for hearing loss.
- The court ruled that compensation caps apply to the payout, not to a worker’s earnings.
- Rand Mutual ordered to pay an extra R110 616, plus costs and interest.
The High Court in Johannesburg has ruled that Rand Mutual underpaid a mineworker by using the incorrect formula to calculate compensation for his occupational injury.
The court found that Rand Mutual Assurance wrongly reduced André Derick Knoetze’s earnings before calculating his compensation, which resulted in him being underpaid.
Judge WJ du Plessis explained that the Compensation for Occupational Injuries and Diseases Act (COIDA) sets a limit on the amount of compensation, but does not put a cap on a worker’s earnings used for the calculation.
Knoetze was awarded an extra R110 616, plus interest, and Rand Mutual was ordered to cover his legal costs for the 2024 tribunal proceedings.
For almost 30 years, André Derick Knoetze endured the relentless noise of South Africa’s gold mines. Over time, the constant exposure damaged his hearing and ultimately forced him to leave his job underground.
After being medically boarded in 2019, Knoetze sought help from the compensation system designed to protect workers who are injured or disabled while working. The battle was not about whether he deserved compensation, but about how much he should receive.
Judge WJ du Plessis, with Acting Judge Ben Zeev agreeing, delivered a judgment that favoured Knoetze. The court found that Rand Mutual Assurance Company Limited had incorrectly calculated the compensation he was owed under the Compensation for Occupational Injuries and Diseases Act.
Knoetze’s claim was based on hearing loss caused by work-related noise, which was accepted as resulting in 19 percent permanent disablement according to COIDA. Rand Mutual awarded him a lump sum of R191 064, but Knoetze argued that he was entitled to the statutory maximum of R301 680.
How the dispute arose
The main question before the court was how Schedule 4 of COIDA should be interpreted when calculating lump-sum compensation for workers with permanent disablement of less than 30 per cent. Should compensation be based on a worker’s actual monthly earnings, with the statutory maximum applied at the end, or should the earnings be reduced before the formula is used?
Rand Mutual chose the second approach. Although Knoetze’s monthly earnings at the time of disablement were R56 404.78, Rand Mutual replaced this with R20 112—a figure calculated by dividing the statutory maximum compensation of R301 680 by 15. Using this reduced amount, they calculated his award as R191 064.
Judge Du Plessis found that Rand Mutual’s method was legally incorrect. He wrote, “The words ‘subject to’ adjust the outcome of the calculation; they do not change what counts as earnings or create a separate, lower ‘earnings ceiling’.”
The court ruled that Section 63 of COIDA requires the employee’s actual earnings to be calculated first and used in the compensation formula. Only after this figure is determined can the statutory minimum or maximum compensation be applied.
Judge Du Plessis stated, “The only maximum that Section 49(1)(a), as read with the 2018 Schedule, sets in this context is a limit on the compensation that may be paid.”
He added, “The statute does not allow the cap to be applied to earnings themselves by substituting a notional ‘maximum earnings’ figure for the actual earnings.”
Court orders additional payment
Using the correct interpretation, the court found that Knoetze’s provisional lump sum exceeded the statutory ceiling, meaning he qualified for the full maximum compensation of R301 680.
Since Rand Mutual had already paid R191 064, the court ordered them to pay the outstanding R110 616, plus interest at the prescribed rate from 11 December 2023 until the payment date. The court also ordered Rand Mutual to cover Knoetze’s costs for the 2024 objection proceedings before the tribunal.
Judge Du Plessis concluded, “That is the fundamental error at the heart of this appeal, and the reason why it must succeed.”
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