Section 12. Contracting
(1) Where any person (“the principal”), in the course of or for the purposes of his trade or business, contracts with any other person (“the contractor”) for the execution of the whole or any part of any work ordinarily part of the principal’s trade or business, the principal shall be liable to pay to any employee employed in the execution of the work any compensation which he would have been liable to pay had that employee been immediately employed by him. Where compensation is claimed from the principal, this Act applies as if references to the principal were substituted for the employer, except that the amount of compensation is calculated with reference to the wages of the employee under the immediate employer.
(2) Where the principal is liable to pay compensation under this section, he is entitled to be indemnified by the contractor or any other person from whom the employee could have recovered compensation; and a contractor who is himself a principal, if liable to pay compensation or indemnify a principal, is entitled to be indemnified by any person standing to him as a contractor from whom the employee could have recovered compensation. Questions as to the right to, and amount of, any such indemnity are, in default of agreement, settled by the Commissioner.
(3) Nothing in this section prevents an employee from recovering compensation from the contractor instead of the principal.
(4) This section does not apply where the accident occurred elsewhere than on, in or about the premises on which the principal has undertaken, or usually undertakes, to execute the work, or which are otherwise under his control or management.
