Managing The Legal Environment: Risk, Rules And Management

Legal Risk, Rules and Management Research Portfolio

Discuss about the Managing the Legal Environment.

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The main task in the research/referencing workshop was identifying a large company in Australia and finding more information about the company. I identified Qantas Airlines limited as the largest company of my research. From my research, I discovered that Qantas Airlines limited has been a key element for the development of Australian and international aviation. It is presently among the top most domestic airlines of Australia and also a chief in the Asia-Pacific area. The airline unites Australia to 81 destinations in 40 other countries world over & functions the wide domestic services both in Australia and New Zealand. From the research, the ABN for Qantas Airways Limited was found to be 16 009 661 901. Its registered address was: Qantas Airways Limited, Building A, 203 Coward Street, Mascot NSW 2020 Australia. I was able to find this and more legal information about the company from the internet at the company’s website (qantas.com).

Most of the information about Qantas Airlines limited is readily available in the company’s website (qantas.com). Such information includes the board of directors and the company’s annual reports. However, more information can be found from journals about the company. Some of these journals include the SWOT analysis reports from the company as well as the company profile reports. The journals also provide the key facts, history, business description, revenue analysis and the top competitors of the company (Qantas Airways Limited SWOT Analysis, 2013; Qantas Airways Limited, 2015). When undertaking my research, there was a lot of information about the company from the internet. The main problem that I faced when conducting my research was distinguishing the sources that were providing genuine information from those that were not. Some of the sources that I discovered with inappropriate information included blogs, interviews, forum postings as well as opinion pieces.

Wembley Stadium Case Study features a contract that was not done as per the agreement between the parties. In the contract, Multiplex had agreed to be responsible in the construction of Wembley Stadium at the maximum amount of £356m. However, Multiplex bleached this contract since the project was overdue by 18 months which costed an additional excess of £900m. According to the construction company, death, dangers and damages that were not expected happened and this caused more uncertainty and delays (Contract Journal, 2006). Contracts are valid so long as all the features of a contract are available. In this case, neither of the two parties had reasons of acting against the contracts. When both parties realized that a problem had occurred, legal action was taken. The legal action against and by Multiplex principally involved Cleveland Bridge and MacDonald.

Reflections on the Wembley Stadium Case Study

In addition to other features within the contract, there was also a penalty clause of £14000/day. The issues that arose as a result of the contract breach included a grant of £120m in lottery funding for this purpose. Since the Stadium was not completed on time, a range of competitions and events had to be relocated to other venues within that year of 2006, this included the FA cup final. Multiplex Company has been in the construction industry for long and is known for litigations. Studies indicate that Multiplex’s prospectus only had half-sentence references to Wembley. About 20 percent of rout in the securities price of multiplex was a large problem. Apart from the problem with the contract, Multiplex had other issues during the project. Multiplex had a problem with the steel contractor (Cleveland Bridge), Honeywell and other several organizations.

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In order for Multiplex to solve the problem with the steel company that had caused a lot of delays, Honeywell took over. This seemed to reduce business problems that had been projected and the risk of the project decreased. In addition, disputes were settled by more agreements. This way, contract breaches and lengthy legal contract issues were avoided and all parties became committed to work together. According to Arbouw (2005), Multiplex was to blame for the losses that occurred during the project. Legal risks lead to court cases that impart tough consequences that are agreed within contracts. Research indicates that Multiplex could have avoided the troubles it encountered during this project only if it used safeguard procedures. By safeguard procedures, the construction company could have created good relationships with other construction companies as well as stadiums so that if a crisis arose as it did, financial loses would have been shared (Jefferies, 2002, p.356).

Analysis and Conclusions on BHP Billton, Seven Eleven and Bullying Case Studies

The issue in the 7-Eleven case study is that workers were unfairly paid. An investigation by Four Corners and the Fairmax Media revealed that workers were being paid half the $24.50 per hour that one was supposed to be awarded legally. The 7-Eleven franchise stores in Australia would sometimes pay less than that half and anyone who complained would be threatened that they would be deported. This is lack of obligation case. The company should have been sued since it was acting against the anti-discrimination laws that protect third parties who violate the obligation as per the Australian laws.

Analysis and Conclusions on BHP Billton, Seven Eleven and Bullying Case Studies

In the case study on bullying, abuse and trolling, Charlotte Dawson, a TV personality committed suicide because she lacked protection against assault. Social and public media have now become a place where people lack protection. Government should come up with policies that provide regulations in these types of environments so that people are protected. When dealing with third parties, organizations should ensure that some measures are put in place so that the party that causes harm to the other has some consequences to face. Organizations that engage on social and public media address areas of legal risk by ensuring that conversations between both parties are recorded to act as some form of evidence. These steps are appropriate to ensure that there is legal obligation.

The BHP Balliton case study provides a good example of civil law of tort of the negligence type. It was the obligation of the design and construction company to ensure that the dams are well constructed to avoid such damages that occurred. In addition, when Instituto Pristino warned of the failure risks at the dam, the concerned party was obliged to act and eliminate the risk. However, ignorance led to the tort of negligence that can be dealt with in the courts of law. When BHP and Vale became partners, they were supposed to be responsible for the venture. This case shows governance failure by both companies.

The first topic was an introduction to organization’s legal environments. Here, there was a lot to learn such as the relevance of law to organization managers; the interaction between business, economics, politics, law, culture as well as global factors; the description of regulation, law, compliance, corporate social responsibility and risk management. The language in law can be daunting in the beginning. However, once it is understood and interacted with, it becomes familiar and gives the individuals dealing with it the confidence that they require. Whether the government should regulate the market remains a constant issue for both private and public sectors (Vickery and Flood, 2012).  History shows that regulation is necessary and therefore rules such as the Privacy Act 1988 were formed.

In Australia, there are several important legal institutions- the parliament is one of the most important legal institutions because it is responsible for making law; Courts are important because they help to interpret the law; tribunals have the obligation of resolving legal problems. Regulatory bodies as well as Alternative dispute resolution (ADR) like mediation and arbitration are important in Australian legal environment (Vickery and Flood, 2012). There are two sources of law in Australia, that is, parliament creates legislations while others that are created by judges in courts are referred to as common law. The two main methods used in resolving disputes include: use of the formal court system; and ADR which includes arbitration, mediation and conciliation.

Reflections on Legal Risk, Rules and Management

The second topic was all about corporate governance and ethics. There are several corporate structures that are acknowledged in the Australian legal environment. The unincorporated structures consist of the sole trader, partnerships, trusts and the unincorporated associations. Incorporated structures are made up of the Corporations incorporated under the Associations Incorporation Acts, Government Business Enterprises (affected by the Commonwealth Authorities and Companies Act 1997) and the Corporations incorporated under the Corporations Act 2001 (Cth). Other business structures include joint ventures, aganciesand franchise (Vickery and Flood, 2012). Corporate governance describes the manner in which firms are managed. Some of the important principles in corporate governance include ASX corporate governance materials, OECD Principles and the AS 800-2003 Corporate Governance.

In Australia, the registration of companies is administered by the Australian Securities and Investment Commission (ASIC). ASIC classifies companies according to the liability of its members (unlimited or limited); their status; and liability of its members (guarantee, shares or unlimited with share capital). Sources of company law include legislations, case law, accounting standards and the ASX Listing Rules (Vickery and Flood, 2012). Some of the bodies that are established under the ASIC Act include Takeovers Panel, corporations and Markets Advisory Committee, financial reporting council, Companies Auditors and Liquidators Disciplinary Board, Financial Reporting Panel and the Australian Accounting Standards Board.

The third topic majorly dwelt on the management of legal environment. Here I learnt that it is important that managers make every effort to manage the risks within their organizations so that they can achieve the objectives therein. Organizations make engage in contracts almost in every agreement they make with other firms. A contract is defined as an agreement that has been made between legal persons where legal obligations are formed so that they are enforced by the law. The elements that are needed in a contract include the intention for creation of the legal relationship, acceptance and offer, content and terms (Vickery and Flood, 2012).

Legal risks result when contracts are ended in a manner that is not right. In contract law, some conducts are not allowed, these are referred to as validity issues and they include: Unconscionable conduct, duress, misinterpretation, undue influence and mistakes. If a breach of contract occurs, the innocent party has the right of taking action against the party that failed to perform in their bargain part (Vickery and Flood, 2012). The innocent party requests for a remedy. Terminations and damages place the innocent party in positions they would have been in the absence of a bleach. Some of the other equitable remedies include rescission, specific performance and injunction and Valebat or Quantum Meruit.

The fourth topic was on legal obligations, difference between civil and criminal laws and the consequences as a result of breaching the law. There is a broad range of groups to whom obligation is owed- politicians, friends and enemies, occupants, competitors, players, users, guests, audiences, advice seekers and road users. Civil law of tort consist of: law of assault and battery, law of defamation and the law of negligence. Criminal law applies if an individual injures, assaults or kills through reckless conduct. Criminal law ensures that there is a safe workplace for the public and all employees (Vickery and Flood, 2012). Competition law inhibits misleading and unconscionable conducts, inclusion of unfair terms and provision of poor quality goods. Lastly, anti-discrimination law protects people from being discriminated against because of gender, goods and services or employment.

Harlow, C. (2005). Understanding tort law. London: Sweet & Maxwell.

Fourth chapter: Facing Consequences, pages 61-76 text is relevant to the Wembley Stadium Case Study. This chapter presents the consequences that result when breach of duty occurs. Harlow argues that the claimant must show the damage that has been suffered. It is also important for damage to be foreseeable. The author points out that courts try to avoid making the defendant liable to the indeterminate individuals for indeterminate sums especially when economic losses are concerned. This chapter is important in the Wembley Stadium case study given that Multiplex Construction Company caused Wembley to experience large amounts of money during the project.

McKendrick, E. & Liu, Q. (2015). Contract Law: Australian Edition (pp. 1-560). Palgrave Macmillan.

Chapter 20: Breach of Contract, page 418-429. This chapter in this textbook explains when a valid contract can be breached. Breaching a contract leads to an action for damages whether an innominate or warranty term occurs or when the term is broken. Because of the damage that results from the breach of a contract, it is important that contract breach is clearly understood. In the Wembley Stadium case study, this chapter will be essential to show whether the contract between the construction company and the stadium was binding and how the contract was bleached.

Tomasic, R., Bottomley, S., & McQueen, R. (2002). Corporations law in Australia. Leichhardt, NSW: Federation Press.

Tomasic, Bottomley and McQueen explain the forms that explain in business associations. In the business environment, it is important that organizations are aware of the associations that are legally binding. Afterwards, the authors describe corporate and corporation law and its framework. The information in this book will provide a guideline towards the discovery of the type of association that was formed between Wembley Stadium and Multiplex Company. If the association was legal, the parties involved would be guided on what corporate laws require in such associations.

Contract Journal, (2006). Multiplex investigates Wembley rafter fault. (cover story). Contract Journal, 432(6567), 1.

This article provides information about the investigations that were carried out after a 50ton rafter from Wembley collapsed. This occurred after the UK’s Multiplex Company had completed a construction project of the stadium. During the collapse, 3,500 workers were ordered to evacuate. A speculation indicated that a welding failure was the cause of the collapse. The information in this article is important in the case study as it would help determine whether the disputes were the cause of poor work by Multiplex.

Pearman, R. (2006). Ex-Wembley chief in Multiplex swipe. (cover story). Contract Journal, 433(6577), 1.

This article provides details of the dispute that emerged between Wembley National Stadium’s CEO and Multiplex Contractors over the differences that occurred in the construction of the England stadium. The firm made arguments that it legitimately deserved time extensions. The Stadium’s CEO insisted that according to the contract there were no allowances from financiers. Multiplex on the other hand insisted that the contract was adjustable. This article is important in the case study because it helps clarify the issues that emerged from the association between the two parties.

References

Arbouw, J., (2005). Multiplex over-arches. Company Director, 21(9), p.31

Contract Journal. (2006). Multiplex investigates Wembley rafter fault. (cover story). Contract Journal, 432(6567), 1.

Harlow, C. (2005). Understanding tort law. London: Sweet & Maxwell.

Jefferies, M., Gameson, R. and Rowlinson, S., (2002). Critical success factors of the BOOT procurement system: reflections from the Stadium Australia case study. Engineering Construction and Architectural Management, 9(4), pp.352-361.

McKendrick, E. & Liu, Q. (2015). Contract Law: Australian Edition (pp. 1-560). Palgrave Macmillan.

Tomasic, R., Bottomley, S., & McQueen, R. (2002). Corporations law in Australia. Leichhardt, NSW: Federation Press.

Pearman, R. (2006). Ex-Wembley chief in Multiplex swipe. (cover story). Contract Journal, 433(6577), 1.

Qantas.com,(2016). Research, Plan, Book and Manage your Trip. Qantas.com. Retrieved 19 September 2016, from https://www.qantas.com/travel/airlines/home/za/en

Qantas Airways Limited. (2015). Qantas Airways Limited MarketLine Company Profile, 1-26.

Qantas Airways Limited SWOT Analysis. (2013). Qantas Airways SWOT Analysis, 1-8.

Vickery, R. & Flood, M. (2012). Australian business law. Frenchs Forest, N.S.W.: Pearson Australia.