MNO3706
Assignment 2 Semester 2 2025
Unique #
Due Date: 12 September 2025
Detailed solutions, explanations, workings
and references.
+27 81 278 3372
, QUESTION 1
Explain the objectives of worker’s compensation.
Workers’ compensation is a legal and financial framework designed to protect
employees who are injured or made ill while performing their jobs. In South Africa,
workers’ compensation laws are standardised to ensure fairness and consistency
across industries. The main objectives include income replacement, rehabilitation of
the injured worker, accident prevention, and cost allocation (Reese 2016:214).
The first objective is replacement of income. When employees are injured and
unable to work, they lose wages that support themselves and their families. Workers’
compensation provides adequate and prompt income replacement for both current
and future earnings, ensuring that employees are not financially devastated by work-
related injuries. These benefits continue even if the employer ceases operations,
offering long-term security to affected workers (Reese 2016:215).
The second objective is rehabilitation of the injured employee. The compensation
system promotes the worker’s recovery and return to work, even if the return is to a
different role or department. Rehabilitation can include medical treatment, physical
therapy, and vocational re-training where necessary. This approach motivates
employees to re-enter the labour force as soon as possible, reducing dependency on
compensation and restoring productivity (Reese 2016:216).
The third objective is prevention of accidents. Employers are encouraged to invest
in workplace safety programmes and accident prevention measures. By reducing
workplace hazards, companies can minimise their compensation costs. Employers
who maintain strong safety records may benefit from lower insurance premiums,
making accident prevention financially beneficial (Reese 2016:217).
Finally, cost allocation ensures that compensation costs are fairly distributed
among industries. High-risk sectors, such as mining or construction, face greater
hazards and therefore bear higher premiums compared to low-risk sectors like
administration. This proportional cost distribution creates an incentive for employers
in hazardous industries to prioritise safety improvements and reduce workplace risks
(Reese 2016:218).
Varsity Cube 2025 +27 81 278 3372
Assignment 2 Semester 2 2025
Unique #
Due Date: 12 September 2025
Detailed solutions, explanations, workings
and references.
+27 81 278 3372
, QUESTION 1
Explain the objectives of worker’s compensation.
Workers’ compensation is a legal and financial framework designed to protect
employees who are injured or made ill while performing their jobs. In South Africa,
workers’ compensation laws are standardised to ensure fairness and consistency
across industries. The main objectives include income replacement, rehabilitation of
the injured worker, accident prevention, and cost allocation (Reese 2016:214).
The first objective is replacement of income. When employees are injured and
unable to work, they lose wages that support themselves and their families. Workers’
compensation provides adequate and prompt income replacement for both current
and future earnings, ensuring that employees are not financially devastated by work-
related injuries. These benefits continue even if the employer ceases operations,
offering long-term security to affected workers (Reese 2016:215).
The second objective is rehabilitation of the injured employee. The compensation
system promotes the worker’s recovery and return to work, even if the return is to a
different role or department. Rehabilitation can include medical treatment, physical
therapy, and vocational re-training where necessary. This approach motivates
employees to re-enter the labour force as soon as possible, reducing dependency on
compensation and restoring productivity (Reese 2016:216).
The third objective is prevention of accidents. Employers are encouraged to invest
in workplace safety programmes and accident prevention measures. By reducing
workplace hazards, companies can minimise their compensation costs. Employers
who maintain strong safety records may benefit from lower insurance premiums,
making accident prevention financially beneficial (Reese 2016:217).
Finally, cost allocation ensures that compensation costs are fairly distributed
among industries. High-risk sectors, such as mining or construction, face greater
hazards and therefore bear higher premiums compared to low-risk sectors like
administration. This proportional cost distribution creates an incentive for employers
in hazardous industries to prioritise safety improvements and reduce workplace risks
(Reese 2016:218).
Varsity Cube 2025 +27 81 278 3372
