This type of fraud costs South African businesses billions – and it’s committed by their own employees

 ·30 Jul 2023

Sick-leave fraud is costing South African Businesses as much as 17% of their payroll every year, and the reality is now that employers are advised to view all medical certificates provided by employees with some circumspection as this type of fraud is becoming rife in the country.

As the name suggests, sick leave is meant to be used when an employee is ill to ensure that they are still paid during the time needed to recover.

According to Solidarity, the Basic Conditions of Service Act provides for 30 days of sick leave in a cycle of three years. Employees are entitled to six weeks of paid sick leave over 36 months. During the first six months in a job, an employee is entitled to one day of paid sick leave for every 26 days worked.

As per this regulation, employers can request a medical certificate if an employee misses two days or is frequently absent. They can also request a certificate if the employee is sick on a Monday or Friday.

However, there have been cases of people abusing sick leave and claiming they are ill when they are actually using this as a personal day, a trend that has become rampant across all industries in the employment sector.

The scourge of sick leave on business in South Africa

Speaking with Newzroom Afrika, labour analyst Tony Healy said there is an “extraordinary amount of sick leave fraud in South Africa, and employers would be amazed at the level this type of fraud has reached. It has gotten to the point where it has become a business to some people”.

He explained that there are admin and receptionist staff in doctor’s rooms stealing whole pads of blank scripts and selling sick notes from home as a side hustle.

This trend has become a notable concern and came into sharp focus when SARS recently won its case for dismissing an employee who claimed to be sick but was later spotted on TV by their bosses participating in an EFF protest at Clicks in Sandton.

News24 reported that the employee was initially fired by the tax agency for dishonesty in early 2021 but won his appeal at the Commission for Conciliation, Mediation, and Arbitration (CCMA) later that year, which ordered that he be reinstated and given back pay. 

However, the Labour Court has now overturned the CCMA’s ruling, finding that SARS was within its rights to fire him, ruling that the employee “asserted and faked” his illness to attend the protest.

In response to the events laid out in the courts, Healy said this type of dishonesty is all too common, adding that he believes that nearly 50% of all medical certificates handed to employers today are fraudulent.

This isn’t far off Occupational Care South Africa (OCSA)’s numbers, which estimate approximately 40% of all employees claiming sick leave, are not physically ill and that South African businesses are losing as much as 17% of their payroll every year due to absenteeism – unfairly punishing already cash-flow strapped employers.

The OCSA further noted that absence from work costs the South African economy between R12 billion and R16 billion per year, and, on average, 15% to 30% of personnel is absent on any given day.

According to Healy, among other stresses in the business environment, employers have to view sick leave certificates with a degree of circumspection and take the administrative burden of validating them more often.

He added that while this serves as a warning to businesses and employers, it is also guided towards employees.

Healy noted that dishonesty in this manner is premeditated theft and fraud. The employee is defrauding the company of the money they are paid while on sick leave – which can lead to dismissal and, in some cases, legal action.

Read: Over 800 businesses in South Africa have closed their doors since the start of 2023

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