TABL 2741 BUSINESS ENTITIES: INDIVIDUAL RESEARCH

ASSIGNMENT TOPIC (Semester Two 2018)

Eco Ltd is a company that owns a large tourism resort on Tasmania’s Wilderness Coast. Eco
Ltd employs 200 people who work in the catering, cleaning and the hospitality outlets of the
resort. The company and its employees have had a long history of industrial disputes involving
wages and unsatisfactory work conditions.

After the most recent dispute in January 2018, Eco Ltd and its employees came to a contractual
agreement, on 1 February 2018, under which it was agreed that all its employees were to be
paid wages and receive improved work conditions that are more than other employees working
in similar resorts in Australia.

One month after the agreement was made, in March 2018, a new company was incorporated
which is a wholly owned subsidiary of Eco Ltd. The new company is called Greenery Ltd. It
has four directors, all of whom are appointed from the Board of six directors of Eco Ltd. It is
agreed that all the profits of Greenery Ltd will be distributed as a dividend to Eco Ltd.

The incorporation of Greenery Ltd was preceded by a meeting between the Board of directors
and the senior managers of Eco Ltd where the reason for the creation of the new entity was
discussed. The senior managers of Eco Ltd devised a strategic plan which called for a new
corporate structure which will take into account that the catering and entertainment services of
Eco Ltd has the potential to become a significant operation in its own right, both within and
outside the resort.

The directors of Eco Ltd were genuinely impressed with the business plan and believed it was
in the long-term interests of the company. They passed a board resolution that the management
of Eco Ltd put into place matters that will allow Greenery Ltd to pursue this new strategic
business objective.

The redevelopment of the current resort was central to the management plan approved by the
board of Eco Ltd. This meant the closure of many of the restaurants within the resort and the
redundancy of 100 employees. These 100 redundant employees were then offered new, but
identical, positions working for their new employer, Greenery Ltd.

Faced with the choice of an uncertain future, all 100 of the redundant employees accepted the
new job offer with Greenery Ltd. As a result, the redundant employees no longer work under
the previous 1 June 2018 contract of employment they had while working for Eco Ltd. Instead,
they now work under conditions and wages that are not as favourable as they had when they
worked for Eco Ltd. However, their current wages and conditions of employment are
comparable to people who work in similar industries.

The trade union, on behalf of the 100 employees now working for Greenery Ltd, is concerned
about the practical effect of this corporate reorganization on employment conditions.

Assuming that the 1 June 2018 contractual agreement between Eco Ltd and its employees is
valid and that Greenery Ltd has been validly incorporated, advise the trade union as to its
chances of success in getting that contractual agreement to apply to all 200 employees as
originally intended.

End of Question

1
Hint: Students are expected to apply relevant provisions of the Corporations Act 2001 (Cth)
and relevant principles of company law and precedents in support of their answers. If more
information/facts are required to that given in the stated question, students may make
reasonable assumptions, and state the need for assumptions, if any.

Do not consider any law that relates to Industrial and Employment Law, nor any legal issues
dealing with directors’ duties.

Marking Guide:
Note: Superficial answers (merely based on issue-recognition or simply quoting large chunks
from books or articles), inadequate consideration of all the critical issues raised by the question
(uncritical legal analysis) will attract a superficial mark.

Marks will be deducted for poorly structured answers (illogical or incoherent answers),
absence of proof-reading the paper before submission or failure to follow instructions in the
writing style guide (available at Moodle).

Students are expected to draw upon (and not merely cite in bibliography) relevant content and
references in the prescribed textbook (ACL 6th edition, lexisNexis 2018) to enhance the quality
of your answer and mark. Remember, this is a research assignment; therefore there is a
reasonable expectation for appropriate research articles identified in your prescribed textbook
to be drawn upon in an appropriate manner.

Note: An impressive list of articles in your bibliography, without sufficient evidence of

appropriate use or understanding, will not impress your assessor.

Important: Assessors will be particularly vigilant to penalise inappropriate reliance on web-

based materials. Use of Wikipedia is prohibited as it is not a reliable source of academic
information.

Reminder: 1. Due Date: Thursday 13 September 2018 (by 6.00 pm sharp);

(a) Lodge soft copy electronically via Moodle Turnitin before due date and time;
(b) Keep a copy of paper submitted;
(c) Extensions will not be granted lightly

2. Word Limit: 1,500 (minimum)–1,700 (maximum) words (excludes footnotes and bibliography);
Follow this word limit instruction. There is no 10% extra leeway in the maximum word count.

3. On your front cover sheet, that you create, include your full name (as enrolled), word count, name of
tutor and class and your OFFICIAL UNIVERSITY email address

4. Be Warned: Plagiarism (failure to identify and acknowledge all references and quotes) and
Ghost Writing (getting others to write for you whether or not for a fee) are serious academic
offences with potential for failure in the Course (not just the assignment) and expulsion from
UNSW. See media reports for such outcomes. The University, including your assessors, will also be
vigilant for such issues.