what would be the relevent law?

Question

Susan Smith (the company accountant) has been approached by XYZ Ltd, a major client of Wellbuilt Pty Ltd, with a business proposal that appeared too attractive to refuse. Susan incorporated her own company to enter this contract. Her company made a profit of $1 million for the last financial year. The directors and shareholder are furious and propose to pass a resolution at the upcoming meeting to remove Susan from her position as accountant to Wellbuilt Pty Ltd.

Answer 1

There are insufficient facts.

If this is a termination for cause, it depends on whether this is a legitimate cause, which depends on facts not given.

Was this contract one that the company would have accepted, is it something they do and she competed with them while employed? If not, they shouldn't be upset.

Did she pursue this business on company time? If so, they should be upset no matter what the contract subject was.

As an accountant, is she an officer? If so, she owes the company a duty not to compete, in the absence of prior permission.

If she's not an officer, is there a written contract that says whether or not she can do this?

Is Susan the one upset? I doubt she is, if she made a pile of money last year, but I don't see any cause for her to complain.

So be specific. Who is upset and what about?

Answer 2

I would think one of the relavant laws in this case may be in regards to conflict of interest. Ms. Smith is an employee of Wellbuilt, and one of Wellbuilt's clients approached her personally with a business proposal (was this business that Wellbuilt would have received?).

She may also be going against her contract for employment - but since we don't know the terms of her employment contract, it's tough to say.

Just some thoughts. Check out the link for a little more info.