Section 8: Bankruptcy of employer

8. Bankruptcy of employer (1) (a) Subject to paragraph (b), where an employer has entered into a contract with an insurer in respect of any liability under this Act to a workman, in the event of the employer becoming bankrupt, or making a composition or 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 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 respects that liability shall, notwithstanding anything in the enactment relating to bankruptcy and the winding up of companies, be transferred to and vest in the workman, and on that transfer the insurer shall have the same rights and remedies, and be subject to the same liabilities, as if he were the employer. (b) The insurer shall not be under any greater liability to the workman than he would have been to the employer. (2) Where 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, he may recover the balance from the receiver or manager. (3) Where the compensation is a weekly payment, the amount due shall, for the purposes 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. (4) This section shall not apply where a company is wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company.