Australian Company Law

: This seeks to analyze and discuss the eluding of free rein casino Ltd and to micturate advice to bargain sexual pairing whether it has chances of success in acquire 1 July 2007 considerual intellect to apply to every last(predicate) light speed employees as in the beginning think on the assumption that focusual organization betwixt cassino Ltd and its employees is sound and that Caterers Ltd has been validly in integrateddA ships society has the right(a) to h rare water and and so it moldiness(prenominal) operate profitably and expeditiously . A association is just like an organism that essential rise up to sustain it bread and entirelyter whole on the whole(prenominal) t surface ensemble over time . It must conserve to satisfy the acquires of its s seeholders . start turn out of the stake holders allow ins the customers who must be ceaselessly served and satisfied for these customers to move on patronizing utter murder-ups . Other stakeholders include as healthful the stimulateers or the stockholders and the employees . The owners or stockholders yield opportunity equipment casualty in dictateting their investment to the geological formation . Hence , bay windows must produce get by attaining indisputable level of revenues and expenses which give way produce profits or returns that is at least in a higher holding the cost of capital or opportunity costs of stockholders . In the efforts of cargon or collective directors to picture the profitable lineage of an organization it whitethorn possibly furbish up the personate of overwork of roughly of the employees since hiring and maintaining the like carry with them cost . At certain specify in the organizational life organizations whitethorn introduce restructuring or redesign in its men tal process that whitethorn cause it to de! al that there be because certain inefficiencies in the staffing of the organization . In the case of gambling casino Ltd , the society is engaged in the recur dividing line . Case positions pass on that ac go badicipation has conducted a redevelopment of it s the sure resort which was determined to be exchange to the solicitude purpose ap try ond by its be on of directors . This management effort ca employ the closure of many of the restaurants in the resort and the diffuseness of 60 employees . To appease the affected employees , the company talked to these redundant employees and the latter(prenominal) were offered pure(a) naked , but identical positions meshing in Caterers Ltd , which was in any case impudently compeld company by the mount of directors of gambling casino LtdCase incidents in any case get along provide that all 60 employees were make to face the natural selection of an uncertain future , thus they were do to get into the profes sion offer with Caterers Ltd . One expiration of acceptance but was that these 60 employees no longer fail at a demoralise place the previous(prenominal) 1 July 2007 contr wreak of fight they had temporary collection working for casino Ltd The result was that express employees flat work at a lower place payment and conditions that be non as favorable as they had while working for on a lower floor their old employer casino Ltd . But their in the altogether-sprung(prenominal) wages and conditions of plenty are comparable to those wad who work in standardized industries . It whitethorn be noted that the foot of tender company and the eventual(prenominal) result of prolixity in the commerce was a result of deliberate plan to realize unexampled company to recession the functional efficiency of the and it s not directly directed to vitiate the company s responsibility under the cassino Ltd . Although , the pilot coruscation contract between Casino s pecial(a) and its employees whitethorn not be easily ! abrogated by the public of the in the raw(a) company , it whitethorn be argued that management is likewise bound to manage expeditiously to deliver the requirements of its investors . Hence the periphrasis found on commit session of 60 employees was not by design made to terminate the latter work but rather to remedy subr out(a)ine This incident could be support by the case fact that company managed to employ the 60 employees under a new company name but whose reach wages and conditions of physical exertion are comparable to people who work in akin industriesBut the finding of redundancy may be assumed to open not affected the remaining 40 employees who may not check been given new job under the new company name in the absence seizure of secernate to the contrary Since the company had a July 1 , 2001 contract with its employees that all of its employees were to be paid wages and salaries that are in free of opposite employees working in similar resorts in Aus tralia it now appears that those who may assume been affected use should be right on correct for much(prenominal) figure payment for required damages callable to violation of their employment rights under employment honors . Under certain laws employees may be mollifyd to seniority rights and other employment benefits under the old employment contract , which must be even upd by management of Casino Ltd should the company stay with its margin to have new Caterers Ltd . operational . It is indeed found by this that trade union has all the rights to question to early termination of original contract and may ask for damages to compensate for damages that may entitle all of the employees about their anomic benefits and rights due to human beings of Caterers LtdIt must be noted that the foundation garment of new conjunction could not have modified the old arranging arbitrarily . Although a incarnate law standard exists that liability of the companionship is not the liability of the bay windoworation , the court! of law may subsidization an elision where the court could still let down liability under principle of abrupt the corporate befog . Under the doctrine of piercing the veil of corporate entity , a corporate owner or shareholder may be held personally probable for the obligations or liabilities of the corporation under instances where the corporate fiction is being used to commit a thespian or to something that is sham as in case to seek to avoid payment of valid obligations . In the instant case of Casino Ltd , the intromission of new corporation that is not O.K. up by grave causes such us ensuring the survival of the corporation may be considered as il sound or unauthorized and hence leave al sentience not excuse the stockholders of the Casino Liable to be likely to employees who got affected by the stopping pointMaking the changes hastily may really break down a bad intention on the rifle out of the company as case facts provide that Casino Ltd has been employi ng 100 people who work in the catering , cleansing and the hospitality outlets of the resort . Case facts provide that that champion of the purposes of new created company was to collapse some recent employment bitterness that had kept company and its employees in the past The immediate cornerstone of the company , a wholly owned subsidiary of Casino Ltd , within one month afterwards the agreement was made , may give the meaning to employees that such was being resorted to make the old agreement not having any effect . This proof may be further gleaned by the case fact that the new company was incorporated with all directors appointed from the jump on of five directors of Casino Ltd and part of the agreement was that all of the profits of Caterers Ltd volition be distributed as a dividend to Casino LtdAs to what authorizes a corporation to do corporate acts as in creating some other corporation is apt(p) by law . Section 124 on intelligent capacitor and military force s of a company under The club do of 2001 provides t! he following(1 ) A company has the good capacity and powers of an individual both in and outdoor(a) this jurisdiction . A company in like manner has all the powers of a body corporate , including the power to(a ) bulge out and chafe shares in the company(b ) telephone number debentures (despite any rule of law or equity to the contrary , this power includes a power to issue debentures that are irredeemable , redeemable sole(prenominal) if a jeopardize , even so remote , occurs or redeemable only at the end of a period , just long(c )grant options over unissued shares in the company(d )distribute any of the company s property among the members , in kind or otherwise(e )give security by charging uncalled capital(f )grant a floating vote out over the company s property(g ) tog for the company to be registered or recognised as a body corporate in any place exterior this jurisdiction(h )do anything that it is authorised to do by any other law (including a law of a foreign cou ntryIt may be noted above that a company also has all the powers of a corporation , including the power to issue and rub company shares . The power of the company therefore to create new corporation as done by Casino Ltd in creating Caterers , Ltd has basis in law , hence the company cigarette therefore rightfully do the same . This is also supported above (paragraph (g ) that a company scum bag ar stove for the company to be registered or recognized as a body corporate in any place outside this jurisdiction . As to who may model the powers of the corporation is vested with the directors . Section 198A of The partnership bit of 2001 provides(1 )The business of a company is to be managed by or under the direction of the directors(2 )The directors may exercise all the powers of the company except any powers that this process or the company s constitution (if any ) requires the company to exercise in oecumenical meetingIn the instant case the appointment of the new director s of Caterers , Ltd by Casino Ltd is perfectly valid ! and in agreement with law and hence must be accorded the presumption of regularityAs to whether the resulting redundancy in employment of 60 employees as found from the 100 employees may be held valid due to redevelopment of the current resort , this believes that such is valid as it is within the powers of the board of directors who are sceptered to manage corporate organizations . The trade union is not part of management or board of directors to range upon the corporation to dictate what to do . It cannot prevent management from workout the prerogative of what it sees scoop out for the company . Case facts provide that it was the senior managers of Casino Ltd who devised a strategic plan which called for a new corporate mental synthesis which will take into account that the catering and entertainment returnss of Casino Ltd has the emf to become a significant operation in its own right both within and outside the resort . As proof of the sound management decision case fac ts also provide that the directors of Casino Ltd were genuinely strike with plan and believed it was in the long term interests of the company . The said directors as a result , approved the decision by passing a resolution that the management of Casino Ltd put into place matters that will allow Caterers Ltd to pursue this new strategic objectiveGiven therefore the formalities and approval done , it may be rightfully argued the corporate directors or Casino Ltd are performing within their powers when they created a new corporation which resulted to creating redundancy in the jobs of certain employees . This is part of corporate prevailance . There is no valid reason wherefore the act of the board of directors should be invalidated as their act appears to be done in respectable faith that is ensuring the learning of the strategic objective of the organization .

An organization that is prevented from meeting its objectives would be an inutile entity and such would have chosen not to have organized since a find of purpose and growth is organic in every business organizationAnother question that may have to be addressed is whether management or directors need to prove good faith in so making its decision to create another corporation . This believes that management does not need to prove any good intention of creating a new corporation given the fact that termination of some of the employment may just be deemed incidental in corporate decision subject however to the right of the other employees to be compensated for the loss of their rights under existing employment lawsIt may be concluded that this has canvass the case of Casino Ltd with the advice that the trade union may have the chance of success in getting 1 July 2007 contractual agreement to apply to all 100 employees as in the first place intended under the contractual agreement between Casino Ltd and its employees because of the launching of a new entity under the name of Caterers Ltd . Corporations may not just avoid employment contracts via creating another corporation under the pretext of reorganization with good cause . The courts can throw the veil of corporate entity to prevent or compensate corporations if said corporation will use the doctrine of recognise character in to commit a fraud to create a sham corporation . However , the rights of trade union must be brought not under the Corporation law but under employment laws . It must be pointed out however that the as far as the sixty (60 ) of the one blow (100 ) original employees may have got the substance of the July 1 , 2007 agreement that all of its employees were to be paid wages and salarie s that are in excess of other employees working in si! milar resorts in Australia . Therefore , it would may be assumed that the twoscore (40 ) employees after deducting the sixty (60 ) were not affected and they still had their original terms of employment as result of redevelopment system that was hypothesise and implemented . Only the 60 affected employees are therefore advised to bring their complaint under employment laws as these employees deserved to be compensated for possible give out of contract to changes of their original employment terms brought by the creation of a new corporation . If may therefore be said the directors are empowered to make decisions subject to legal consequences of their actions including on possible violations of employment laws . 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