CORPORATIONS ACT

Corporations Act

Corporations Act

The Case

Jetair Ltd is a company that was formed in 2009 to provide charter services in particular services to the Federal Government in the transshipment of refugees from Christmas Island to the Australian mainland. The services proved to be cash flow beneficial but not particularly profitable.

In January 2011 the Board of Jetair decided to apply for a commercial aviation license to operate commercial flights within and outside Australia. In June of 2011 the commercial aviation license was granted by the Federal Government.

Due to substantial overheads in the form of aviation fuel and landing charges, Jetair realized that it had to make reductions in its largest overhead component; therefore, salary payments if it was to be competitive in its fare pricing. The pilots and senior managers of Jetair were approached by agents acting for the Jetair Board in July 2011 and asked if they would agree to a 25% reduction in pay and conditions; however, based on the pilots association, and the airline union advice, the offer was rejected by the pilots and senior managers.

The Board of Jetair met in August 2011 and decided to register a new company in New Zealand called Jetair NZ ltd. The board of JetairNZ would consist of three representatives from Jetair and two representatives from the airline industry in New Zealand. Jetair passed a resolution to have the Australian commercial airline licensee sub licensed to JetairNZ and this was agreed to by the Australian Federal Government.

In September 2011 Jetair recruited pilots and senior managers in NZ and paid them at rates 25% lower than the equivalent Australian rates of pay. Australian based airline pilots were offered the same New Zealand reduced rates of pay and were asked to relocate to New Zealand as Jetair NZ would now be flying all of the air routes in Australia but would be home based in New Zealand. All of the pilots and the senior managers refused the offer and the company made them all redundant and paid them their full entitlements on being made redundant.

The employee associations, representing the pilots and senior managers, are of the opinion that the action of Jetair is illegal. They are further incensed that the Board of Jetair has at their last AGM (November 2011) awarded themselves substantial bonuses on top of their normal remuneration.

Application of Corporation Act

A corporation is a company on which this Act is applicable and it meets the criteria of sections 215 and 216 which declare the survival of a common agreement of shareholder and the addresses and names of people who assume the board's powers to the registrar's administration of companies in the transmission of its first annual return after February 14, 2011(Corporations Act, 2001).

A guideline prepared by the state under any of sections 169, 123, or 23 of the Corporations Act (chapter C-38) carries on to be relevant till replaced or repealed by a guideline prepared by it falling under any of sections 489 or 488 of the Corporations ...