The Occupational Diseases in Mines and Works Act 78 of 1973 established the Mines and Works Compensation Fund to compensate workers who contract specified diseases from work in mines and works. The fund is financed principally through levies imposed by the Compensation Commissioner for Occupational Diseases on owners of controlled mines and works. The fund operates through four separate accounts: the State Account, Mines Account, Works Account, and Research Account. An actuarial valuation as at 31 December 2003 revealed a deficit of approximately R610 million in the fund. The Commissioner notified contributing owners that he intended to increase levies over 15 years to eliminate the full deficit. Members of the Chamber of Mines, through discussions in the Advisory Committee, accepted liability for a portion of the deficit (approximately R196 million relating to current workers) but disputed the Commissioner's right to recover the full deficit from them. The Chamber applied to the North Gauteng High Court for declaratory orders challenging the Commissioner's determination of levies.
The appeal was dismissed. The appellant (Chamber of Mines) was ordered to pay the costs of the first respondent (Compensation Commissioner) and fourth respondent (National Union of Mineworkers), including the costs of two counsel.
The binding legal principles established are: (1) Under the Occupational Diseases in Mines and Works Act 78 of 1973, mine-owners and works-owners may be levied to recover deficits in the Mines Account and Works Account respectively; (2) The Commissioner may determine levies by categorizing mines (e.g., by mineral type) and determining levies with reference to the risk attaching to that category, pursuant to sections 62(2) and 20(3)(a), rather than being confined to individual mine-specific risk assessments; (3) Section 62(1)'s reference to "every person who performs risk work" encompasses all persons who perform risk work at any time, not only current workers, meaning levies on current workers may be designed to fund liabilities arising from former workers' claims; (4) The State's financial obligation toward the Mines and Works Compensation Fund is limited to the specific circumstances enumerated in section 74 of the Act, and does not extend to a general obligation to fund deficits in the Mines Account or Works Account; (5) Deficits in the Mines Account and Works Account are to be made good through additional levies on the respective mine-owners and works-owners.
The court observed that in a fund of this nature there is always the prospect of a deficit arising. The court noted that the State Account is operated on a current-cost basis with annual parliamentary appropriations to meet current claims, meaning actuarial deficits in that account are to be expected and do not require funding by mine-owners. The court also observed that actuarial valuation is required only where reserves are required to be held for future claims, which supports the interpretation that the Mines and Works Accounts must maintain reserves funded by levies rather than relying on State guarantees. The court commented that the National Union of Mineworkers had a legitimate interest in the proceedings that it was entitled to advance, justifying an award of costs in its favour despite having intervened rather than being joined by the appellant.
This judgment is significant in South African occupational health law as it clarifies the financing structure of the Mines and Works Compensation Fund and the respective obligations of mine-owners and the State. It establishes that mine-owners may be levied to recover deficits in the fund arising from both current and former workers' claims, subject to ring-fencing between accounts. The judgment confirms the Commissioner's discretion to categorize mines for levy purposes rather than individualizing each assessment. It limits State financial responsibility to the specific circumstances enumerated in section 74, rejecting a broader guarantor role. The case is important for understanding the balance between employer responsibility and state obligation in compensating occupational diseases, and for statutory interpretation of social welfare legislation in the mining industry.