Workmen's Compensation Act, 1934
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Bankruptcy of employer. |
20.—(1) Where any employer has entered into a contract (in this section referred to as a contract of insurance) with any insurers in respect of any liability under this Act of such employer to any workman, then, in the event of such employer becoming bankrupt or making a composition or arrangement with his creditors, or if such employer is a company, in the event of such company having commenced to be wound up or a receiver or manager of such 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 that charge, the following provisions shall have effect:— | |
(a) the rights of such employer against such insurers as respects that liability shall, notwithstanding anything contained in any enactment, be transferred to and vest in the workman, and upon any such transfer such insurers shall have the same rights and remedies and be subject to the same liabilities as if they were the employer, so however that such insurers shall not be under any greater liability to the workman than they would have been under to the employer, and | ||
(b) if the liability of the insurers 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, he may recover the balance from the receiver or manager. | ||
(2) Where an employer (being an individual) has not entered into a contract of insurance, then in the event of such employer becoming bankrupt or making a composition or arrangement with his creditors, there shall be included amongst the debts which, under section 4 of the Preferential Payments in Bankruptcy (Ireland) Act, 1889, are in the distribution of the property or assets of a bankrupt or arranging debtor to be paid in priority to all other debts the amount due in respect of any compensation or liability for compensation under this Act by such employer accrued before in the case such employer has become a bankrupt the date of the order for adjudication, or in case such employer has become an arranging debtor, the date of the filing of the petition for arrangement. | ||
(3) Where an employer (being a company) has not entered into a contract of insurance, then in the event of the company having commenced to be wound up, there shall be included amongst the debts which under section 209 of the Companies (Consolidation) Act, 1908 , are in the winding up of a company in priority to all other debts, the amount due in respect of any compensation or liability for compensation under this Act by such company accrued before the date mentioned in sub-section (5) of the said section 209. | ||
(4) When an employer (being a company) has not entered into a contract of insurance, then in the event of 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, there shall be included amongst the debts which under section 107 of the Companies (Consolidation) Act, 1908 , 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 under this Act by the company accrued before the date of the appointment of the receiver or manager or of possession being taken mentioned in the said section 107. | ||
(5) When the compensation is a weekly payment, the amount due in respect thereof shall, for the purposes of sub-sections (2) (3) and (4) of this section, be taken to be the amount of the lump sum for which the weekly payment could, if redeemable, be redeemed if the employer made an application for that purpose under this Act. | ||
(6) This section shall not apply where a company is wound up voluntarily merely for the purpose of reconstruction or of amalgamation with another company. |