Plain language law

New Zealand law explained for everyone

Companies Act 1993

Directors and their powers and duties - Directors' duties

132: Exercise of powers in relation to employees

You could also call this:

“Directors can help employees when a company reduces or stops business”

When a company stops doing all or part of its business, a director can still help the employees. Even though section 131 talks about what directors should do, it doesn’t stop them from doing good things for the workers.

When we say “employees” here, we mean people who work for the company now, people who used to work there, and their family members who depend on them. But if someone is or was a director of the company, we don’t count them as an employee in this case.

Also, when we talk about a “company” here, we’re not just talking about the main company. We’re also including any smaller companies that the main company owns or controls.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320659.

Topics:
Business > Industry rules
Business > Fair trading
Work and jobs > Worker rights
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“Directors must make decisions in the company's best interests”

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Part 8 Directors and their powers and duties
Directors' duties

132Exercise of powers in relation to employees

  1. Nothing in section 131 limits the power of a director to make provision for the benefit of employees of the company in connection with the company ceasing to carry on the whole or part of its business.

  2. In subsection (1),—

    company includes a subsidiary of a company

      employees includes former employees and the dependants of employees or former employees; but does not include an employee or former employee who is or was a director of the company.