| Commentary

68 Duties to employees

| Commentary

68 Duties to employees

At common law the directors did not owe any duties to the company’s employees. Indeed, on occasions a desire by directors to benefit the company’s workforce has landed them in trouble. For example, in one case the directors’ proposal that a large share of the sale proceeds of the company’s undertaking should be given to the employees was held to be unlawful as the directors owed their duties to the shareholders and not to the employees1. This decision was subject to considerable criticism and the Companies Act 2006 now allows the directors to provide for employees

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