Remedies against Darel and Actions against Octopus Telecom Ltd - Case Study Example

Name: Tutor: Institution: Course: Date: Corporation’s law A case study of Darel: A business entrepreneur Introduction The Corporations Act 2001 (Cth) which is also termed to as the Corporations Act or even the ‘Corps’ Act is defined to the act of the Australians Commonwealth and it is meant to set laws which deals with corporations and business entities based in Australia at both interstate and federal (Australia. et.al 239). It focuses mostly on companies such as Red Cellular Ltd (RC) and Octopus Telecom Ltd (OT), although it also deals with laws related to other entities such as partnerships and managed investment schemes. The Corporations Act is the major and well known legislation regulating companies in Australia. This act regulates all matters which relates to the formation, operation and dissolution of companies including the constitution that may be used by a company, officers duties, appointments, fundraising and dismissal of directors and employees (Evans et.al 953). Such companies have employment contract terms signed by all the employees because they require job specifications and directors involved in their management so as to indicate recruitment procedures, contracts, terms and conditions, appraisals or redundancies (Evans et.al 953). Organizations are recommended to have person specifications. Protecting ones organization is very important no matter the kind of business. The only lawful method to take care of a business is through a properly drafted Employment. This contract should be legal, authorized and well written with restrictions for competition or with the intention of protecting the business from being snatched from you. Has Darel breached his duties, as a former director at RC? Darel was appointed as the RC board to investigate on the possibility of expanding the company products and services into India and China but did nothing about his job. That is for the past two years, he has made little progress in developing the assigned project. As a company director, Darel had the key responsibilities within the organization which are inclusive of ensuring that he acts in a diligence and care. A reasonable person in a managerial position is also expected to work in according to the role Section 180 in the Corporations Act Requirements (Australia. et.al 239). This means that any director or officer has a civil obligation of diligence and care in discharging their duties. According to Section 181 of the corporations requirements, an officer or director should work for the best interest of the company failure to which it will be a breach of duties (Australia. et.al 239). Here a number of fiduciary duties are added by the Corporations Act on all entity directors who have been incorporated under that particular legislation. Persons serving in the capacity of directors of companies are therefore required to follow the stipulated laws in regard to the Corporations Act while disseminating their duties. Based on the provisions in this act, Darel a former director of RC has breached this code of conduct in his duty dissemination and he is therefore liable to punishment by the court of law (Evans et.al 953). Corporations Act (Section 182) provides a civil responsibility which does not grant employees like secretary, directors like Darel and other employees or officers of the corporation a chance to make improper use of their positions to obtain an advantage for someone else or themselves or with the aim of causing detriment to the company (Australia. et.al 239). Here it is more likely that Darel used the company position in RC to market himself rather than executing his duties and that is why he secured himself a job as a chief executive in RCs competitor, Octopus Telecom Limited (ltd). The use of director’s position by Darel for his advantage was a breach of his duties. Corporations Act (Section 184) provides that an employee or director commits an offence if he or she acts in a dishonest manner. Darel was not honest to his employer and as a result he breached the code of conduct which governs duty execution with honest and in good faith. Therefore it is evident that Darel breached his duties both under the general law and the Corporations Act. Corporations Act (Section 181) puts on a civil obligation on all employees serving as officers and directors of a corporation to practice their powers together with offering their duties with honest and with good intentions for the corporation (Evans et.al 953). For example, the use of powers by directors to benefit their self interest, sectional interests or third party interests instead of the interests of the whole corporation can be termed to as the breach of their duty (Evans et.al 953). This is exactly what Darel went against. According to the Corporations Act Section 180, an employee or a director of a corporation should exercise and with a high and reasonable degree of diligence and care in discharging duties and exercising powers. It is therefore reasonable in the sense of the degree of diligence and carte which a reasonable person who is in a corporation position should exercise given the same position to serve. Remedies against Darel According to Section 184(2) of the Corporations Act, it’s stated clearly that directors and other officers or employees of an organization or rather a corporation is held responsible for crime if they use their position with no honest will in office. Darel used his position to market himself and this was very detrimental to the company since the company did not achieve its objectives and hence Darel should be held responsible or accountable for his own actions (Australia. et.al 239). In this case, the RC Company should seek a court intervention resulting from breach of contract. Breach of a contract is punishable by the court of law. Having been appointed as a director in RC Company to investigate the possibility of expanding the company products and services into India and China, Darel did not perform to his expectations which may have led to high losses to the company. RC company should ensure that Darel compensates for all the losses which the company might have been suffered a remedy called loss mitigation. Darel did not also abide by Section 180 of the Corporations Act and hence he is liable for negligence which led to failure to execute his duties with diligence and care to RC Company. A contract of employment is formed when an employee agrees to a job and this is the reason many companies request acceptance in writing. Having a written contract of employment can eliminate disputes in relation to the terms of employment at a later date (Evans et.al 953). The employer and employee are bounds by the terms of the contract of employment until it ends. This is usually when either the employer or employee serves notice, or the contact terms are changed. In this case, Darel did not honor the contractual agreement that was supposedly written by getting into another company in the same capacity he’d been serving at Red Cellular Ltd. Actions against Octopus Telecom Ltd (OT) Having breached his civil obligations, Darel should not have been employed by Octopus Telecom Ltd and therefore RC Company has all the rights to take a legal action against Darel and not Octopus Telecom Ltd Company. A Telecommunications Company is considered as a government corporation regardless of whether it privately owned or set up by the government. This is because it disseminates essential and delicate information to the public and it operates under laws stipulated by the government (Australia. et.al 239). According to the Public Sector Ethics Act 1994 (the Ethics Act), it is unethical to under-perform at your current position in search for a dismissal so as to challenge your successor or compete against your employer. However, this is not illegal according to the provisions of the Ethics Act. This seems to be the target on Darel’s case hence making him act unethically though not illegally. Company’s and business entities are out to be competitive in the business market and should not be liable for any breach of contract committed by their employees who initially worked in other companies (Evans et.al 953).. In this case therefore, there is no legal action against Octopus Telecom Ltd. Darel has breached a contract in regards to the agreement he had with Marco. Breach of contract means that one or all the parties involved in an agreement have gone against the terms and conditions or rather the provisions of the agreement by non-performance or interference with the other party's performance (Australia. et.al 239). If one of the parties does not fulfill his contractual promise, or has decided to boycott the agreement in silence, if by his action and conduct he seems to be unable to perform the contract, he is said to breach the contract (Evans et.al 953). The contract signed by Darel means that he should not seek another employment before the contract period expires. On the contrary to this agreement, Darel quickly picked up a job offered by their competitors within a period of one month upon his resignation. RC Company can also take a legal action against its rival for employing a person who had previously breached a contract and is subject to a court case. The rival company can also be blamed for being an accomplice to Darel towards the breach of contract. Therefore, the entire RC is entitled to damage compensation. Where a contract is breached by one of the parties, the other party may acquire three distinct rights. He may be discharged from further performance, If he or she has finished something under the contract, he or she also has the right to take legal action based on the quantum merit, a cause of action different from the one arising from the original contract, and based upon a law created contract or he or she has a right to take action concerning the initial contract, or term of the contract broken, and may maintain (Evans et.al 953). In generally, the other party is then put in to a position which he or she should have been incase of a successful execution of the contract. This is also another action which RC Company should take: ensuring that Darel is retrenched from work. Based on these fact, Marco and the entire RC can pursue a legal action against Darel and the latter is supposed to pay nominal damage since no actual lose was incurred only that the defendant acted wrongfully. Else the court can impose specific performance of the act promised in the contract (Evans et.al 953). If the terms of the contract were unclear, then the court would call for a reformation which allows the participants to rewrite the contract. On the contrary, if Darel could have been sacked by Marcos, he could then be the one to pursue legal action against Marcos and the court would rule in favor to Darel by mitigating the damages. However, Marco and RC management have no legal case against East China Telecom Ltd (ECT). The reason for this is the lack of a written between RC and ECT. According to Evans et.al (953), the party injured by a breach of contract is liable to sue for damages. The damages given incase of a contractual breach should always amount to the actual loss suffered and the common law as stated above, that the person who has been injured by a breach of contract is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed. Work Cited Rob Woellner, Stephen Barkoczy, Shirley Murphy, Chris Evans, (2009). Australia taxation law 2009. CCH Australia Limited. Pg. 953. Australia, CCH Corporate Law editors, CCH Australia Limited, (2009). Australia Corporations & Securities Legislation 2009: Corporations Act 2001, ASIC Act 2001, related regulations. CCH Australia Limited. Pg. 239 Read More