Ministry of Labour Principal Secretary Wezi Kayira says government has allocated K100 million for the Workers Compensation Fund (WCF) to become operational this financial year.
In an interview on Friday, he said when operational the fund will lessen the burden employers have been facing in paying hefty compensation to workers.
Kayira said: “The reason why that money has been provided by the government is for us to kick-start the exercise. As you know when setting up a fund there are so many things that have to be done.
“So, that money is intended for that purpose, that we do the needful things, including setting up a board, a secretariat and the fund itself.”
The WCF was set up in 2020 after government noted that workers’ compensations were rising and burdening some employers.
Government and employers are, therefore, expected to contribute towards the fund.
On how the contributions will be made, Kayira said a yet to be constituted board will develope guidelines.
He said the board will comprise government officials, members from employer and employee organisations as well as medical and insurance representatives.
Kayira said that under the fund, employees will be covered for any compensation for period of time, adding that it will further cover occupational diseases which incapacitates people.
In a separate interview, Employers Consultative Association of Malawi (Ecam) president Annie Chavula said the fund will be a relief to employers.
She said: “This is a very welcome development and as employers we are very excited to have this fund operational because previously the burden was on the employer to settle claims.
“In any event of injuries, it was the responsibility of the employer. So, it was costly to us as employers.”
Chavula said there also used to be fraudulent claims from employers.
She said the operationalisation of the fund will, therefore, eliminate all fraudulent claims and activities and ensure sanity.
A 2018 investigative report by the Ombudsman on delays in processing workers’ compensation claims, recommended that processing of claims must be done by a workers’ compensation commission which is well equipped with an established fund.
The Ombudsman’s report further recommended that such a fund must be specifically for the processing of injuries or death compensations of employees.
In Malawi, the Ministry of Labour is guided by the Workers Compensation Act to, among others, receive notice of injuries and claims for compensation, investigate causes of injuries, and to decide any question relating to compensation.
The Workers Compensation Act provides for compensation for injuries suffered or diseases contracted by workers in the course of their employment or for death resulting from such injuries or diseases.
The Act further provides for establishment and administration of the Workers Compensation Fund.