A R300 million software solution provided to the Department of Labour by German-based software giant SAP is being blamed for the collapse of the department’s R60 billion Compensation Fund for injured workers across South Africa.
These allegations have been brought by the Injured Workers Action Group (IWAG), an advocacy group that was formed this week.
The group alleges that workers from across SA, who have been injured on duty, are facing “a crisis of epic proportions” as a result of the technological collapse of the Compensation Fund that is legally mandated to cover their medical bills and disability pensions.
It notes the department has long struggled with its claim system, and on 15 August 2019 switched off its previous uMehluko electronic system with the intention to migrate users to a new and improved SAP system called CompEasy (S4i).
According to IWAG spokesperson Tim Hughes, the SAP system should have been live since 1 October 2019, but CompEasy was “dead on arrival”.
“The Web site never worked. The system was never parallel-tested with the old one as you would expect when the stakes are this high.
“As a result, about 150 000 working-class South Africans who have been injured or disabled on duty since mid-2019 have been left out in the cold. And to make matters worse, the state granted a R300 million tender plus five years of maintenance fees to Britehouse, a division of Dimension Data, to implement this SAP-based system that is not working.”
No complaints received
Responding to the allegations, SAP sent an e-mail to ITWeb saying: “SAP confirms that the new system at Department of Labour is running SAP software.
“This system was not implemented by SAP, but we can confirm that no product-related defects have been logged with SAP. Our recommendation is to contact the customer directly for a response on your query below.”
Britehouse also responded, saying: “While it is not the policy of Britehouse to comment on its relationships with their clients, Britehouse can confirm, as is standard practice for enterprise technology deployments, that they are one of a number of parties and service providers who were involved in the development and deployment of the CompEasy system for online claims and adjudication processing by the Compensation Fund, and in this regard, Britehouse has delivered on its responsibilities in line with the requirements provided.”
The company says the system is operational and processing claims and the number of claims processed continues to increase daily.
“Britehouse remains committed to support the Compensation Fund and will continue to work together to resolve any issues that they are contracted to do.”
Nonetheless, Hughes goes on to say: “The technical failure of the system is now at such a level that, according to a large industry survey, only about 2.8% of injured workers have been able to submit claims since October 2019 and less than 1% have been paid, compared to 80% on the old system.
“This is scandalous. This is total systems collapse. One cannot underestimate the far-reaching devastation that this has caused for the lives and livelihoods of the injured blue-collar workers of this country and everyone around them,” says Hughes.
The Department of Labour has since issued a statement saying CompEasy was launched on 11 October 2019, and has processed in excess of 120 000 medical claims and 8 000 claims registrations.
However, it says because it is a new system which is meant to address fraudulent and invalid claims, it is experiencing a few challenges which include some users who are struggling to access the new system; migration and cleaning of data from the old to new system; and general network downtime experienced by external users.
“Noting the fund has received some complaints and frustrations from clients, we are continuing with the following – providing training to stakeholders as we have been since 2019; supporting stakeholders in accessing the new system; and using feedback from users to continue improving user experience.”
Quick response required
Meanwhile, IWAG is calling on government to swiftly address the crisis and is especially concerned about Compensation Fund commissioner Vuyo Mafata and labour department director-general Thobile Lamati’s “apparent failure to address industry’s calls for urgent remedial action”.
Hughes says the severity of the matter cannot be underestimated. “If you look at the sheer number of vulnerable people who have now been failed by the system and left to fend for themselves under very trying circumstances, and the extent of that failure by the state and its technology partners, you’ll see that this is an untenable situation.
“Tens of thousands of families of injured workers, those workers’ medical caregivers and employers, and several critical industries in the economy, have all been struck a terrible blow here. This is a crisis of epic proportions and it is wreaking havoc on the economy at a scale that we are still in the process of quantifying.”
On the impact of the crisis, Hughes explains: “Consider for a moment that a thousand workers on average are injured on duty in South Africa every single day. The backbone of SA’s economy, these are farmworkers, fishermen, builders, security guards, nurses, paramedics, factory workers, kitchen staff and many more. All of them rely on the labour department’s Compensation Fund to cover their medical costs, as prescribed by the law.
“These patients are supposed to be treated in private hospitals and by private physiotherapists, occupational therapists and other medical specialists because they have special needs and require long-term rehabilitation, which state facilities are neither equipped nor mandated to supply to them.
“This is why the state has set up a fund to which all 650 000 employers in this country are contributing about R9 billion per annum. This fund must ensure that injured workers can claim for the medical care they need to enable them to return to work. And medical practitioners who devote their lives to working with injury-on-duty patients, need to be compensated timeously – or face financial ruin.”
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