Jaen Beelders from 21st Century explains…
HR practitioners form a critical part of a loss of earnings claim (against the Road Accident Fund) if an employee has suffered a motor vehicle accident. Often HR personnel are hesitant to provide employment information about an employee because they feel they may place the business at risks or that the business may be involved in legal proceedings. This is not the case; HR personnel need to provide experts with collateral to accurately report on loss of earnings for the injured employee. There is almost zero risk on the HR personnel and even less so on the organisation, unless false information is supplied.
Loss of earnings refers to the income lost because of the bodily injuries sustained in an MVA. Loss of earnings is segmented into past loss of earnings and future loss of earnings. Past loss of earnings refers to the direct loss of earnings due to the traumatic event. For example, should the employee be unable to work for an extended period beyond their sick leave and their earnings are negatively affected, he or she is entitled to claim for the loss of past earnings. This is basically a retrospective review of the employee’s losses as a direct result of the event.
Future loss of earnings, on the other hand, refers to the likely future earnings of the person should the traumatic event not have occurred. It is important to note that the South African legal system does not only consider employment at the time of the accident but also the future career opportunities the claimant may have been able to attain during their working career.
An employee’s ability to generate an income may be negatively affected as follows:
- The employee may be totally incapacitated as result of the injuries sustained.
- The productivity of the employee may be negatively affected because of the accident having a detrimental effect on overtime, sales or any additional output that could have generated a higher income.
- The employee’s job may need to be amended and therefore a reduction in the Total Guaranteed Package for the amended job.
- The employee may have reduced promotional opportunities due to the employee’s inability to compete with his/her able-bodied peers.
Determining a claimant’s earnings capacity has proven to be a multi-faceted and complex concept that is contingent on contextual factors. HR personnel are key to provide earnings experts/industrial psychologists with clarity about the impact of the accident on the employee’s performance. Earnings experts are often employed by attorneys to compile an in-depth report postulating earnings. In order to accurately do so, the earnings expert would contact the HR department to request some of the following information:
- What did the employee earn at the time of the accident and what is he/she currently earning?
- Was the employee paid during their period of recovery?
- How has the employee’s performance been affected by the accident?
- What is the organisational structure and the pay ranges attached to promotional opportunities for the expected career path?
- What would the most likely career path have been over the employee’s lifetime should they have remained employed at the organisation?
It is imperative to provide experts with honest and accurate information to support the expert opinion and assist the courts to provide a fair payment for the Motor Vehicle Accident sustained.
Written by:
Jaen Beelders, BCom (Hons) Industrial Psychology, Senior Analytics Advisor, 21st Century.
About 21st Century:
21st Century is one of the largest Remuneration and HR consultancies in Africa, with a team of more than 60 skilled specialists, servicing over 1700 clients – including non-profit organisations, unlisted companies, government, parastatals and over two thirds of the companies listed on the JSE. 21st Century offers effective business planning with KPA and strategic planning reviews, creative reward practice modelling, operating modelling, change, stakeholder and culture management, training courses and comprehensive organisational development plans. 21st Century continues to offer solutions via virtual channels during the lockdown period.
In this volatile and uncertain environment, the way of working is changing dramatically. There are new – and often unprecedented – challenges that require businesses to plan rapidly and take decisive and immediate action. 21st Century offers a Resilience Audit assessing businesses during COVID-19 for their sustainability, offering these businesses tailor made solutions and developing new remuneration structures and performance measurement systems.
21st century has expanded its services to offer a full turnkey sustainable business and remuneration service. Beyond remuneration and reward consulting, 21st century offers local analytics for business advantage; remuneration and HR training; change management services; talent and people solutions; and end-to-end organisational development.
