Workers Compensation Act 1987

This section applies where—

a person (the principal contractor) has entered into a contract for the carrying out of work by another person (the subcontractor), and

employees of that subcontractor are engaged in carrying out the work (the relevant employees), and

the work is carried out in connection with a business undertaking of the principal contractor and is work that is an aspect of the work of that business undertaking.

The principal contractor is liable for the payment of any workers compensation insurance premiums payable by the subcontractor in respect of the work done in connection with the contract during any period of the contract unless the principal contractor has a written statement given by the subcontractor under this section for that period of the contract.

In this section—

if the subcontractor has failed to obtain or maintain in force a policy of insurance as required by section 155 (1) in respect of the work done in connection with the contract during any period of the contract—the amount recoverable under section 156 (1) (Recovery of double premiums from employer not obtaining policy of insurance) in connection with that failure, or

if an amount is due and payable by the subcontractor to an insurer as a premium or balance of premium for the issue or renewal of a policy of insurance in respect of the work done in connection with the contract during any period of the contract—that amount, together with any late payment fee payable in respect of that amount under section 175 (2).

The written statement is a statement comprising the following—

a statement by the subcontractor that all workers compensation insurance premiums payable by the subcontractor in respect of the work done in connection with the contract during any period of the contract have been paid, accompanied by a copy of any relevant certificate of currency in respect of that insurance,

a statement by the subcontractor as to whether the subcontractor is also a principal contractor in connection with that work,

if the subcontractor is also a principal contractor in connection with that work, a statement by the subcontractor as to whether the subcontractor has been given a written statement under this section in the capacity of principal contractor in connection with that work.

The regulations may make provision for or with respect to the form of the written statement.

The principal contractor must keep a copy of any written statement under this section for at least 7 years after it was given.

The principal contractor may withhold any payment due to the subcontractor under the contract until the subcontractor gives a written statement under this section for any period up to the date of the statement. Any penalty for late payment under the contract does not apply to any payment withheld under this subsection.

The written statement is not effective to relieve the principal contractor of liability under this section if the principal contractor had, when given the statement, reason to believe it was false.

A subcontractor who gives the principal contractor a written statement knowing it to be false is guilty of an offence.

Any amount payable by a principal contractor under this section is recoverable as a debt in a court of competent jurisdiction by the person to whom the amount would, as workers compensation insurance premiums, be payable by the subcontractor.

The principal contractor is entitled to recover from the subcontractor as a debt in a court of competent jurisdiction any payment made by the principal contractor under this section.

This section does not apply in relation to a contract if the subcontractor is in receivership or in the course of being wound up or, in the case of an individual, is bankrupt and if payments made under the contract are made to the receiver, liquidator or trustee in bankruptcy.

This section does not apply in respect of a contract entered into by the principal contractor for the carrying out of work at the principal place of residence of the principal contractor.

The regulations may exempt from the operation of this section any contract, work, principal contractor or subcontractor of a class or description specified in the regulations.