Work Injury Compensation Act 2019 · 2020 Revised Edition · Part 3 · Work Injury Compensation Insurance
28. Insurer’s obligation if employer bankrupt, etc.
Feedback & supportDespite any written law relating to bankruptcy or the winding up of companies, where an employer has entered into a contract with any insurer in respect of any liability under this Act to any employee, the rights of the employer under the contract against the insurer in respect of that liability are transferred to and vest in the employee in any of the following events:
employer
“employer” means any person (A) who employs an individual (B) under a contract of service and includes —(a)the Government, if B belongs to a class or description of employees of the Government declared to be employees for the purposes of this Act under paragraph (a) of the definition of “employee”;(b)the legal personal representative of A, if A is deceased;(c)a duly authorised agent or manager of A;(d)the person who owns or is carrying on, or for the time being is responsible for the management of, the profession, business, trade or work in which B is engaged; and(e)where B is employed for the purpose of any game or recreation and engaged or paid through a club, the manager or members of the managing committee of that club.
the employer becomes bankrupt or makes a composition or scheme of arrangement with the employer’s creditors; (b)where the employer is a company —
proceedings are commenced to wind up the company;
a receiver or manager of the company’s business or undertaking is duly appointed; or (iii)possession of any property comprised in or subject to a floating charge securing debentures issued by the company is taken by, or on behalf of, the holders of the debentures.
On a transfer to an employee under subsection (1), the insurer has —
employee
“employee” means an individual who has entered into or works under a contract of service with an employer and —(a)includes every employee of the Government in a class or description declared by the President to be employees for the purposes of this Act; but(b)does not include any class of individuals specified in the Third Schedule;
the same rights and remedies in relation to the employee as if the insurer were the employer; and
the same liabilities in relation to the employee as if the insurer were the employer, but this does not impose on the insurer any greater liability to the employee than the insurer’s liability to the employer under the contract.
If the insurer’s liability to the employee under subsection (2)(b) is less than the liability of the employer to the employee, the employee may, as the case may be —
prove for the balance in the employer’s bankruptcy or liquidation; or
recover the balance from the receiver or manager of the employer’s business or undertaking.
Where the employer’s liability is to pay periodical payments for temporary incapacity —
the amount payable in respect of the compensation, for the purposes of this section, is the lump sum into which the employer’s liability to pay the periodical payments for temporary incapacity could, if commutable, be commuted under section 17(4); and
a certificate of the Commissioner as to the amount of the lump sum is conclusive proof of that amount.
This section and section 29 do not apply where a company is wound up voluntarily only for the purpose of reconstruction or of amalgamation with another company.