24. Power of company to provide for employees on cessation of business

Question 1

24. Power of company to provide for employees on cessation of business

Answer 1

General overview
[24.01] By virtue of a deeming provision, this section provides that a company’s constitution shall include the power to grant redundancy payments to employees or former employees of the company in the event of a cessation of its business.

Question 2

Power to grant redundancy payments

Answer 2

[24.02] Section 24 provides that a company’s constitution shall be deemed to include a power to make provision, in connection with any cessation of the whole or part of the business carried on by the company, for the benefit of employees or former employees.

Question 3

Manner of exercise of power

- subject to provision in constitution eg general mtg approval for redundancy payment

Answer 3

[24.03] The deeming provision relates to the capacity of the company and is subject to any provision in the constitution that may require such powers to be exercised in a particular manner such as by requiring a general meeting’s approval for such redundancy payments.