Background and Overview
The Great Adventures Pty Ltd is one of the largest hotel chains in the country, and is scattered over the whole of Melbourne. In the given case we see how some of the decisions taken by the directors of the company to take the company out of certain financial crisis affected the company in the growth and development sector. And the various laws and the rules of the same got breached. We will do further analysis of the whole issue to justify the decision taken by the directors and the steps taken by the employees, and how the same was detrimental for the growth and downfall of the company in any which way possible (Government, 1998)
1. Now the first and the foremost proposition is whether the company was responsible in the overall scenario in any of the decisions taken by the same. The directors are the main authority of the company, who are entrusted with substantial powers for operating the company. In the given case after applying the relevant case laws, as per section 180 of the corporation Act, A director must performs his duties by applying the highest level of care and due diligence possible. The director should make sure that while taking decisions he should see that the judgement is in good faith, and there is no personal interest of the director involved in any of the case. In the given case we see that John tried to block the shares of the Great Family Trust, which would give John considerable voting power that will eventually help him in getting the proposals executed. It would also have a longer term benefit in reducing the power of shareholders from outside the Great family. So the action taken by John was against his duty as the director of the company, because his personal interest was involved in his actions. As per section 181and 182 of the Corporation Act, if any of the director doesn’t act in good faith, they will be penalised and will be made to pay the required amount of penalty. Also in the given case , there is a certain example of MS Jones who was recruited because she was recommend by the agency with which the company had business relations. She took many disadvantageous decisions and affected the goodwill of the company to a large extent. All this was against the proposition of the laws of the Act, because the directors of the company failed to act in good faith and had their own personal interest involved in their decisions (Commonwealth acts, 2001)
Challenges Facing Great Adventures Pty Ltd
2. The employees of the company are also responsible in many ways, we see how the employees of the company ,w ere working against the same, exploiting the overall growth and demands of the company and the needs of the customer, for the own advantage. In the given case study we see that Ms Jones who was an employee of the company worked against the policies of the company and also acquired her certificate through fake internet policy, which was against the ethical rules. We also have an example of Dina, a new staff member, who made promises to the customer about certain type of rooms and facilities, even though she was told thousand times not to indulge in the same. Third there is an instance about the cab driver Sunni, who is not licensed to carry the passengers. Sunni always takes the passengers to a particular restaurant where she gets a free meal from the grateful owners. John was concerned to find that Mari, the Human Resources Manager, knew about this and took it into account when setting Sunni’s wages. Also he found that Shane who was the Adelaide Hotel staff member, never informed the Coastal Adventures about the intricate details about the tour and the demands of the customer, because of which the customer had a very bad experience with the company. These were few of the instances where the employees were wrong on their part while serving the company and doing their job. They must be penalised for the same and the directors should try to take the matter in their own hands, when they come across any such situation of the company’s employees working against their policies (Club)
3. As per the provisions of the company’s law, in case of issue of shares by the directors of the company. It has been stated, that If the company has only one class of shares, the directors have authority to allot shares of that class unless there is a restriction in the company’s articles. In cases where there are more than one class of shares, the directors cannot issue shares unless there is a provision in the company’s articles or by a special resolution. It must state the maximum number of shares that can be allotted, and also the time period during which it can be valid to issue shares of the company, as given in the company law. There may be several restrictions on the share price and the number of allotted, that can be imposed by the company law in this regard. So in many cases the directors must be given power by the shareholders to allot new shares. Even anywhere the directors and the shareholders are the same people, these procedures must be complied with. This is the procedure that must be followed by issuing shares by the directors of the company
Proposed Solutions to Address the Issues
4. In the given case, even if the shares are issued in good faith, or in any other terms for the betterment of the company. It is important that the same is done as per the relevant provisions of the company law. If the director doesn’t follow the same it will be breach of duty on his party and penalty can be imposed.
5. In cases where the minority shareholders feels that they are exploited or their rights are not fulfilled, they can bring their claim, that the company is being managed in a way that is detrimental to their interest and steps can be taken by the court of the law, of the claims are found correct. Even in case of joint venture of merger, to is important that the rights of the minority shareholders must be fulfilled. No provisions of the company must be against their good faith. The minority shareholders can take actions against any kind of oppression that they go through.
6. The care passengers who are travelling by the shuttle drivers that are provided by the company have utmost trust and faith in the same, and in cases where the shuttle drivers are not having license and are taking the passengers to such restaurants so that they can fulfil their personal desires then that is against the faith that the customer has in the company with their live and wellbeing, so in this way the company had breached the trust of the care passengers and mist be penalised for the same (Management and administration, 1965)
7. The staff were also wrong in their actions, they promised facilities to the customers, that they failed to arrive. They failed to provide proper details of their demands to the hotel, because of which the customers had to suffer, they failed to perform their duties properly , they failed to provide the comfort an the hospitality that the customer expected out of the restaurant and the services that they promised in their sites, In this way they acted against the policies of the company and also mishandled the trust of the customers. This is the wrong doing on part of the staff (Legal vision, 2015)
References
(1965). Management and administration. Retrieved from https://www.ssm.com.my/acts/fscommand/act125s0132D.htm
(2001). Commonwealth acts. Retrieved from https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s183.html
(2015). Legal vision. In Directors duty of care. Retrieved from https://legalvision.com.au/directors-duty-of-care-and-diligence/
Club, C. L. (n.d.). Issuing shares. Retrievd from https://www.companylawclub.co.uk/issuing-shares
Government, Q. (1998). Corporation Act. Queensland. Retrieved from
https://www.premiers.qld.gov.au/publications/categories/policies-and-codes/handbooks/welcome-aboard/member-duties/corp-act-2001-c.aspx
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