Waste management firms win landmark classification appeal against Compensation Fund

In a significant ruling, the North Gauteng High Court in Pretoria has overturned Labour Department Compensation Fund controversial decision imposing excessive levies on eleven waste management companies.

Delivered on June 2, 2025, the judgment found the Fund classification of the firms as “glass manufacturers” irrational and ordered their reclassification under a lower-risk category, retroactive to February 2020.

The court also mandated refunds of overcharged penalties and required the Fund to issue compliance certificates.

The dispute centered on the Compensation Fund 2020 decision to categorise Don’t Waste Group companies—which sort recyclables at client sites—under subclassification 1201, typically reserved for high-risk glass manufacturing and glazing businesses.

This classification triggered higher tariffs under occupational injury laws.

The companies argued their actual work involved low-risk waste sorting, comparable to municipal services, and should fall under subclassification 1960 for property management and agency work.

Justices Khumalo, Millar, and Le Grange unanimously condemned the Fund decision as arbitrary, noting its own investigators had recommended lower-risk category in 2020.

The court emphasised the Fund ignored evidence showing no manufacturing or hazardous activities occurred, instead persisting with an unsupported classification for four years.

The ruling highlighted the Fund failure to respond to appeals and provide rational explanations as a key factor in overturning the decision.

As remedial relief, the court substituted the Fund decision, ordering the 1960 subclassification for all eleven companies.

The Compensation Fund must now recalculate levies from February 2020, reverse all related penalties, and issue Letters of Good Standing upon payment.

The Fund was also ordered to cover legal costs. The judgment sets a precedent for equitable risk assessments under South Africa’s compensation laws and underscores state entities’ duty to act reasonably.

The Don’t Waste Group, represented by Advocate G Thatcher SC, welcomed the verdict after a protracted battle. The Compensation Fund has yet to comment on potential further appeals.

They offer a range of waste management services, including collection, sorting, and recycling.

Their services are tailored to the needs of various industries, including retail, commercial, industrial, and hospitality sectors.