Workers Compensation Act 1951

This section applies if—

a person carrying on a business (the principal) enters into a contract with another person (the contractor) to carry out work that is part of the principal’s business (the contracted work); and

a worker employed by the contractor becomes an injured worker (the injured worker) while carrying out the contracted work; and

the contractor is uninsured.

The principal is liable to pay to the injured worker any compensation that the principal would have been liable to pay if the worker was employed by the principal.

If this section is relied on to make a claim for compensation, or bring any other proceeding, against a principal, then, in the application of this Act to the claim or proceeding—

a reference in this Act to an employer is taken to be a reference to the principal; but

any calculation of the earnings of the injured worker must be based on the earnings paid or payable to the worker by the contractor that employed the worker.

If a principal is liable under this section to pay compensation to an injured worker, the principal is entitled to be indemnified by—

if the principal is uninsured within the meaning of paragraph (a) of the definition of uninsured—any person, other than the DI fund manager, who would have been liable to pay compensation to the worker independently of this section; or

if the principal is uninsured within the meaning of paragraph (b) of the definition of uninsured—any person, including the DI fund manager, who would have been liable to pay compensation to the worker independently of this section.

Nothing in this section prevents a worker claiming compensation—

against a contractor instead of a principal; or

if both the contractor and principal are uninsured—against the DI fund.

In this section:

uninsured, in relation to a principal or a contractor, means the principal or contractor—

does not have a compulsory insurance policy in force that applies to an injured worker mentioned in subsection (1) in relation to an injury; or

has a compulsory insurance policy in force that applies to the injured worker in relation to the injury but the policy was issued by a licensed insurer that—

cannot provide the indemnity required to be provided under the policy; or

has been wound up.