Employees’ Rights

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Abstract

This paper will discuss issues involved in creating a corporate compliance plan. It will put into consideration the provisions of various laws including international law. It will also put into consideration legal issues that pertains to employees’ rights, duties and responsibility and the extent to which these rights are protected by the law. In addition the paper will also address a legal policy and regulations that should be put in place while setting up legal frameworks.

Introduction

Managing legal liability calls for a careful approach in policy formulation and implementation. This is because the process normally runs hand in hand with a well designed internal audit. Corporate compliances normally include performance of risk assessment ans determination of the extent or the level of the risk. Another thing that must be considered is understanding the relevant laws and regulations, obtaining or establishing policies and frameworks for selected or specific issues in relevant areas. Besides, it is advisable to educate people on the policies, procedures, through communication awareness. Most importantly, it is also advisable to check the compliance with existing laws, regulations and policies. Towards the end, it is prudent and in good light to audit the higher risk areas and finally conclude by a repeat on educating the staff on regulations, concerns and issues arising from the audit.

Managing Legal Liabilities of Directors

Directors are individuals that are members of a a board of a given firm, company, organization or business enterprise. They are charged with the following duties and responsibility under policy framework and regulations. Their roles remain fairly the similar immaterial of whether they practice in a profit making or non- profit making organizations (Minnesota Office of Citizenship and Volunteer Services, Minnesota Department of Human

Resources, Minnesota State Bar Association. 1998).

Legal Duties of Directors

The basic responsibility of a director is to always represent the interest of members in carrying out the affairs and activities of the organization, putting into consideration the extent to which such is applicable within the context of the law. Such legal responsibilities are usually described in well detailed law documents such as statutes and acts

In representing the members of the organization, and playing their roles as the trustees of the mission and vision of organizations, directors have the following duties to discharge.

The duty of diligence

Directors are required to act prudently, reasonably, in good faith and with a view to the best interest of the organization and its members. Diligent directors always act prudently and in the best interest of the organization. When performing their duties as directors, they are expected to exercise the same level of care that a reasonable man with same skills, abilities and experience would exercise in a similar circumstance. Besides, directors are expected to have a responsibility to act carefully. They should anticipate the consequences of the actions they choose to take before they choose to undertake such decisions.

Duty of Loyalty

Directors are required to be loyal in their work and to place the interests of the organization first, and not to use one’s position as a director to further one’s own interest especially if they are inconsistent with the interest of the organization. Directors are required to put the interests of the organization first. They should not be in more than one organization at the same time in the same position as directors since they cannot be loyal to both. In so doing, they act as one entity as required.

Duty of Obedience

It is also the duty of directors to act within the scope of the governing policies of the organization and within and within the scope of other laws, rule and regulations that apply to the members of the organization. Legal, private and tribunals are recognized as having a contractual capacity and as having contractual relationship with their members. To govern this relationship, there are a set of governing document which include its constitution, by-laws, policies and rules and regulations.

Legal Liability of Officers and Directors

When a law (statute) has been broken, the consequences could be a fine, having restrictions place on one’s rights or privileges, or even being imprisoned. On the other hand when a contract has been breached or violated by the directors, and since a contract is legally enforceable promise between two or more parties, consequences would most likely follow. The solutions could be paying some financial compensation to the concerned parties. However, when an act, or failure to act, whether intentionally or unintentionally, causes injury or damage to another person, the consequence of such act, happening intentionally or unintentionally, is financial compensation. Directors’ and officer’s liability can also be solved through indemnification, liability insurance and through risk management.

Enterprise Liability

References

Minnesota Office of Citizenship and Volunteer Services, Minnesota Department of Human

Resources, Minnesota State Bar Association. Planning It Safe: How to Control Liability and

Risk in Volunteer Programs. Minnesota: Minnesota Office of Citizenship and Volunteer

Services, Minnesota Department of Administration, 1998. Retrieved from http://www.admin.state.mn.us December 20th, 2011