Workmen'S Compensation Act 1952 · Updated to 22 Jul 1982 · Part II · Workmen’S Compensation for Injury
21. Bankruptcy of employer
Feedback & supportWhere any employer has entered into a contract with any insurers 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 insurers 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 Malaysia or any part thereof, be
employer
“employer” includes the Government of Malaysia and the Governments of each of the States; in respect of civilian employees engaged in Malaysia or in Singapore of any visiting force lawfully present in Malaysia or of any person in the civil employment of the Government of any Commonwealth country, whose contract of service was made in Malaysia or in Singapore, the Government of that Commonwealth country; any local authority; any person or body of persons whether statutory or incorporated or not; the legal personal representative of a deceased employer; and in relation to a person 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 the said club: Provided that where the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, the latter shall, for the purposes of this Act, be deemed to continue to be the employer of the workman whilst he is working for that other person;
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Workmen’s Compensation transferred to and vest in the workman, and upon any such transfer the insurers shall have the same rights and remedies and be subject to the same liabilities as if they were the employer, so, however, that the insurers shall not be under any greater liability to the workman than they would have been under to the employer had the transfer not happened.
workman
“workman”, subject to the proviso to this subsection, means any person who has, either before or after the commencement of this Act, entered into or works under a contract of service or of apprenticeship with an employer, whether by way of manual labour or otherwise, whether the contract is expressed or implied or is oral or in writing, whether the remuneration is calculated by time or by work done and whether by the day, week, month or any longer period: Provided that the following persons are excepted from the definition of “workman”— (a) any person employed otherwise than by way of manual labour whose earnings, calculated in accordance with section 9, exceed five hundred ringgit a month; (b) a person whose employment is of casual nature and who is employed otherwise than for the purposes of the employer’s trade or business, not being a person employed for the purposes of any game or recreation and engaged or paid through a club; (c) a domestic servant; (d) any person who is a member of the armed forces or of any visiting force lawfully present in Malaysia; (e) any person in the civil employment of Her Britannic Majesty’s Government in the United Kingdom, or in any other country of the Commonwealth whose contract of service was not made in Malaysia nor in Singapore; (f) a person employed, or selected for employment, in a civil capacity by the Government of Malaysia or by the Government of any State or by any local authority before 1 April 1953 in the application of this Act in Peninsular Malaysia, and before 1 January 1957 in the application of this Act in Sarawak where, in consequence of injury received by any such person in the discharge of his duties, a pension, gratuity or other allowance which would not be payable if such injury were received otherwise is paid to him or, in the case of his death, to any of his dependants as defined in this Act under any written law for the time being in force in Malaysia or any part thereof providing for the grant of such pension, gratuity or other allowance (this paragraph shall not apply in Sabah); (g) any police officer, and any other person engaged to perform police duties in accordance with the provisions of any written law while so performing such duties; (h) an out-worker; (i) a tributer; (j) any member of the family of the employer who dwells with him in his house; *(k) any class of persons whom the Minister may declare not to be workmen for the purposes of this Act. *NOTE—see P.U.…
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.
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.
There shall be included among the debts which—
under section 43 of the Bankruptcy Act 1967 [Act 360], are to be paid in priority to all other debts;
under section 292 of the Companies Act 1965 [Act 125], are to be paid in priority to all other debts; and
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:
in the aforementioned case (a), the date of the order;
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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
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.
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.
Commissioner
“Commissioner” means— (a) in relation to Peninsular Malaysia, the Director General of Labour and all Deputy Directors General of Labour, State Directors of Labour and Assistant State Directors of Labour appointed under the Employment Act 1955 and includes such Labour Officers appointed under the said Act as the Minister may declare to be vested with all or any of the powers conferred or duties imposed upon the Commissioner by this Act; (b) *in relation to Sabah, the Director of Labour appointed under the Labour Ordinance of Sabah and includes a Deputy Director, an Assistant Director and any Labour Officer appointed under the said Ordinance whom the Minister may declare to be vested with all or any of the powers conferred or duties imposed upon the Commissioner under this Act; (c) in relation to Sarawak, the Commissioner of Labour appointed under the Labour Ordinance of Sarawak and includes a Deputy Commissioner, an Assistant Commissioner and any Labour Officer appointed under the said Ordinance whom the Minister may declare to be vested with all or any of the powers conferred or duties imposed upon the Commissioner under this Act;
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).
insurer
“insurer” includes any insurance society, association, company or underwriter;
This section shall not apply where a company is wound up voluntarily for purposes only of reconstruction or of amalgamation with another company.