127Subcontracting

127 Subcontracting (1) Where a person (in this section called a principal contractor) contracts with another person (in this section called a subcontractor) for the execution by or under the subcontractor of work undertaken by the principal contractor in the course of the principal contractor's business or trade, the principal contractor is liable to pay compensation under this Act to a worker employed by the subcontractor in the execution of that work as if the worker has been employed by the principal contractor. (2) Where a claim for compensation from a principal contractor is made under this Act by a worker employed by a subcontractor: (a) a reference in this Act to the worker's employer is to be read as including a reference to the principal contractor; and (b) a reference in this Act to the worker's earnings is to be read as a reference to the worker's earnings from the subcontractor. (3) A principal contractor who is liable to pay compensation under this section is entitled to be indemnified by any person who is liable to pay compensation to the worker other than by virtue of this section. (4) Nothing in subsection (3) is to be construed as requiring the Nominal Insurer to indemnify a principal contractor. (5) Nothing in this section is to be construed as preventing a worker from recovering compensation from the subcontractor instead of the principal contractor.