Malaysia legislation
Section 21
Section 21
(2)
If the liability of the insurers 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 maybe, 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 insurers 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 premia), the provisions of that subsection shall apply as if the contract were not void or voidable, and the insurers shall be entitled to prove in the bankruptcy or liquidation for the amount paid to the workman:
Provided that this subsection shall not apply in any case in which the workman fails to give notice to the insurers of the happening of the accident and of any resulting disablement 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—
(a)
under section 43 of the Bankruptcy Act 1967 [Act 360], are to be paid in priority to all other debts;
(b)
under section 292 of the Companies Act 1965 [Act 125], are to be paid in priority to all other debts; and
(c)
under section 191 of the Companies Act 1965, are to be paid in priority to any claims 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:
(i)
in the aforementioned case (a), the date of the order;
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(ii)
in the aforementioned case (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
(iii)
in the aforementioned case (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 17 and a certificate of the Commissioner as to the amount of such sum shall be conclusive proof thereof.
(6)
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 insurers as is referred to in subsection (1).
(7)
This section shall not apply where a company is wound up voluntarily for purposes only of reconstruction or of amalgamation with another company.
Special provisions relating to seamen