Singapore legislation
Clause 19
Clause 19
Bankruptcy of employer
(1)
Where any employer has entered into a contract with any insurer in respect of any liability under this Act to any workman, then, in the event of the employer becoming bankrupt or making a composition or scheme of arrangement with his creditors, or, if the employer is a company, in the event of the company having commenced to be wound up or a receiver or manager of the company’s business or undertaking having been duly appointed or possession having been taken by or on behalf of the holders of debentures secured by a floating charge of any property comprised in or subject to the charge, the rights of the employer against the insurer as respecting that liability shall, notwithstanding anything in any written law relating to bankruptcy or the winding up of companies for the time being in force in Singapore, be transferred to and vest in the workman, and upon any such transfer the insurer shall have the same rights and remedies and be subject to the same liabilities as if the insurer were the employer, but the insurer shall not be under any greater liability to the workman than it would have been to the employer.
(2)
If the liability of the insurer to the workman is less than the liability of the employer to the workman, the workman may prove for the balance in the bankruptcy or liquidation or, as the case may be, may recover the balance from the receiver or manager.
(3)
Where in any case such as is referred to in subsection (1) the contract of the employer with the insurer is void or voidable by reason of non-compliance on the part of the employer with any terms or conditions of the contract (other than a stipulation for the payment of premiums), the provisions of that subsection shall apply as if the contract were not void or voidable, and the insurer shall be entitled to prove in the bankruptcy or liquidation for the amount paid to the workman:Provided that the provisions of this subsection shall not apply in any case in which the workman fails to give notice to the insurer of the happening of the accident and of any resulting incapacity as soon as practicable after he becomes aware of the institution of the bankruptcy or liquidation proceedings and that the employer was insured and with whom.
(4)
There shall be included among the debts which —
under section 43 of the Bankruptcy Act (Cap. 18) are to be paid in priority to all other debts;
under section 292 of the Companies Act (Cap. 185) are to be paid in priority to all other debts; and
under section 191 of the Companies Act are to be paid in priority to any claim for principal or interest in respect of debentures,the amount due in respect of any compensation or liability for compensation accrued before the following dates, that is to say: —
in the case mentioned in paragraph (a), the date of the receiving order;
in the case mentioned in paragraph (b), the date of the commencement of the winding up of the company or, where the company is ordered to be wound up compulsorily and had not previously commenced to be wound up voluntarily, the date of the winding-up order; and
in the case mentioned in paragraph (c), the date of the appointment of the receiver or of possession being taken as mentioned in the said section 191.
(5)
Where the compensation is a half-monthly payment, the amount due in respect thereof shall, for the purposes of this section, be taken to be the amount of the lump sum into which the half-monthly payment could, if commutable, be commuted if application were made for the purpose under section 16 and a certificate of the Commissioner as to the amount of such sum shall be conclusive proof thereof.
(6)
The provisions of subsection (4) shall apply in the case of any amount for which an insurer is entitled to prove under subsection (3), but otherwise those provisions shall not apply where the bankrupt or the company being wound up has entered into such a contract with the insurer as is referred to in subsection (1).
(7)
This section shall not apply where a company is wound up voluntarily for the purpose only of reconstruction or of amalgamation with another company.