View/Open - Research Commons - The University of Waikato

claims. In addition, the usage of self remedies such as retention of title clauses, lien
and hire purchase will result in the assets being taken out of the pool for distribution
to creditors. Hence, despite the priority status, employees may not be able to claim
the benefits because the assets of the company are no longer available for
distribution.
Employees will also be vulnerable when the company is in the stage of closure of
business where they will face the uncertainty of termination of employment.
Contractarians argue that the company has no duty to ensure continuance of
employment and employees are free to seek employment elsewhere. When the
economy is vibrant and there is full employment, it may be relatively easier to find
an alternative. Otherwise, it might be difficult for employees to seek other work,
especially when it involves highly specialized skilled workers.
6.3.3 Other Stakeholders
6.3.3.1 Consumers 131
Other stakeholders who may be affected by the company‟s action include consumers
and local communities. When the management is making decisions on the
company‟s future investments, customers‟ interests will have to be one of the
paramount concerns. 132 This is because customers would expect to receive safe and
reliable products from the company. 133 In addition, they anticipate that they will
receive fair exchange and value for money. Failure on the part of the management to
take into account consumers‟ interests will cause them to go to competitors or even
131 See section 172(1)(c) of the UK Companies Act 2006 which requires a director to consider the
need to foster the company‟s business relationships with suppliers, customers and others.
132 Parkinson above n50 at 261
133 Freeman above n52 at 25.
144