Free Agency of Professionals in Business and Golden Handshake

This document discusses the concept of Free Agency of Professionals in Business and Golden Handshake. It also covers the steps to prevent unethical practices at the workplace and the role of CEOs in fulfilling the requirements of employees.

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Topic 6-
In general, Free Agency of Professionals in Business implies the behaviour of a person in
which he works independently only for himself rather than for a single employer. These are
usually known as Free Agents that includes freelancers, self-employed workers, independent
contractors and temporary workers. This term can be seen usually in context of Sportspersons
who does not confine themselves to particular team but negotiate a contract with the team of
their choosing. While referring to Free Agency of Corporate CEOs, it refers to the practice of
CEOs incorporates who conclude a working agreement in the company of their choosing and
benefits them with their expertise and professionalisms (Pulman, 2011).
We know that, in corporate as in life, good people sometimes gets involved in bad things
irrespective of the level, status or size whether it’s a small lie or a giant fraud, a one-time act
of dishonesty or an deliberative ongoing process.These acts of dishonest have minute effect
on the well being of people around but in long run these act create appreciable effect. In a
corporation a nice person is the one who follow the law and practice zero tolerance towards
any kind of unlawful practice, maintain better work place environment as a
General rule in practicein order to cultivate a corporation to provide health
workplace suitable to each of the employee and eliminate any kind of
discriminatory behaviour. As asked here , getting into any kind of ethical Behavior can never
be good as practising unethical behaviour leads to violation of companies policies , abusive
Behavior with staff, non-transparency in various regulations ,employee theft , misusing the
companies valuable time etc. Being a nice people is in itself defines the ethical Behaviour of
an individual however if any circumstances leads a nice person to get involved in unethical
behaviour then it can cost everyone involve whether employees, society or company.
However, there are certain steps that must be taken in order to prevent unethical practice at
workplace which can be mentioned as below-
 Periodic review of the compliance of the company policies by employees and
managers
 Application of same standards of work on manager as defined for employees.
 Evaluation of ethical perspectives of managers leadership in addition of the
assessment of employee ethical conduct.
 Organising regular individual level meeting, if possible, to discuss the ethical issues
and behaviours.

 Determination of model ethical conduct in compliance with the company’s policy.
 Provisions of ethical behaviour professional development opportunities.
In corporate anyone may came across people who are very deficient social presence. In case
of citizens relation with companies’ top officials it has been found that in a research, 89% of
customers have switch their brand just because of bad experience and only 49% of executives
said that they though it legitimate. However, it has been seen that companies with huge
consumer base have CEOs who are available on social media. 72% of the top executives
think that there exist a healthy relation between sales and marketing in their company but in
reality only 51% of marketing staff thinks that way. In most of the cases companies have
board of directors who most of the time acts as a rubber stamp for companies business and in
some cases the board earn CEO of any discrepancy found. In both the case we can found out
that the board is mostly unaware of the happening in the company at CEO level. In a case
during the time of Siege if Boston, George Washington proposed to attach British but his war
council denied and George Washington does not attacked. In this case there was a
communication between executive and top officials that leads the results to be in favour of
George Washington . Some CEOs are also not very good listener they just like to talk and
dominate the meetings and as most people have observe that when you talk you are less keen
to learn or intact when you are talking you are not learning. That’s why the best CEOs are
Chief Listening Officers also.
It is general practice that the role of CEOs are male dominant which is though a matter of
time forgotten . Although male CEOs are seemed to be more confident as males tend to be
overly confident than women. Despite lot of examples of the fact that companies with female
leadership tends to more successful than companies with male leadership. It mainly leads me
leaders to less interested in the inputs from others . It is evident among male executives that
having open door, managing by walking about, going for party with team does not affect
people at lower levels because they can’t deliver na news to the person who signs their
cheque. However there must present a systematic approach towards the majority by top
executives . Presence of mutual connection between the executive and its majority is vital for
the operation of business . CEOs who believe in their majority and have trust in the potential
of their majority often derive better results from them. CEOs must have enough potential in
order to find the strength of their majority by interacting with them and they also need to
perform a series of functions that help their majority deliver better. There must be virtual “
power of faith” between the executive and his majority. A faith based CEO often perform
some of the following functions

a) Have faith in their community and engage with them through active listening and
through article , notes etc.
b) CEOs who want their people to perform better tends to engage better with media,
listening more intently , offer more value to media interview and briefings.
c) Favour close loop marketing as they tend to believe actively in sales and marketing .
They try to connect both of them more efficiently.
d) Executive who have faith in the potential of their majority are those who never used
to avoid any single chance to establish communication with majority of the company
and always jump in such tasks .
Every good executive always put his genuine efforts in order to bring the potential of a
employee. However people of company also wants some functions on the side of CEO to
perform .
 Activeparticipation in decision making process.
 Presence of sensitivity and responsiveness among executives .
 A balancedpersonal and professional life .
 Nondiscriminatoryshareholding .
 Information dissemination from executives.
 Opportunity to buildup team leading capacity.
 Non practising “command and control” approach.
In order to fulfil the requirement of the employees every CEO must work in the direction of
this as follows-
i. Communicate how the pressure of external events has forced the need for change.
ii. Communicate their personal vision.
iii. Report progress towards organisational goals.
iv. Be proactive by focusing on the future.
v. Set the example by modelling desired behaviours and hence values.
vi. visit, seek out views, listen and talk with staff (Brender, 2017).
Golden Handshake- It is a refers to a kind of document which has provisions regarding the
benefits to be provided to the employee if he loss his job. It is basically the trend of giving
post retirement benefits to those who are at higher posts. The benefit can be anything in terms
of either cash or kind (Medatwal, 2014).
Basically it is a provision of ensure post retirement security to an employee or job loss due to
restructuring of company, legitimate redundancy etc. However Australian Government is

working his best to curb the excessive use of Golden Handshake. Government had released
its draft with provisions which is intended to undermine the level of termination benefits to
senior executives without the permission of shareholders. There are amendments to
Corporation Act 2001 under the corporation amendment (improving accountability on
termination Payments) Bill(Government, 2018). It requires the approval of shareholders if the
amount to be paid to the officials who were in the company last year is above that obtained
from the use of prescribed formula (Deutsche, 2019). The amount to be offered is decided by
the tenure of service that an individual has served with the employer. However utmost
remuneration is equivalent to the amount of seven years of tenure .The proposed bill has
provisions regarding lowering the cap that requires the approval of shareholders in order to
give annual basic salary irrespective of the duration of service. The bill also has provision
when a termination benefit is provided to person in accordance with his departure with office
ie to determine whether or not it requires permission of shareholders . The cap will not be
apply to only to directors but also to five highest remunerated personnel and key management
personnel.In the propers draft categorisation if benefit has been done as either “in” or “out”
for the purpose of threshold .The payment which are under the settlement not in accordance
with the procedures of the corporation act 2001, will be taken as “in” payment . And these
kind of payments will be included in the account while calculating whether benefit has
achieved maximum limit amount or not . However any kind of deferred payment or
incentivesfrom certain mentioned benefit superannuation are “ out”.Also there is significant
rise in penalties as well as provisions for six month imprisonment for approving benefit
beyond certain limits without the shareholders approval(Young and Lawyers, 2016).
However Australian courts have designated through various cases that not all the
handshakes are golden. Federal court held that identifying those who hold managerial or
executive posts in these listed companies is matter of fact (Goldberg, 2012).
Employersshouldensure that any terminationbenefit paid to individual should be below the
limit prescribe in section 200AA(1) of the Corporation Actor that shareholders approval
have been sought. Also Federal Court in Discovery Africa Limited v Nichol [2015] FCA
1497 case court held the limitation on golden handshake for person in “managerial or
executive office (MEMORANDUM, 2019). It also held that definition of the “executive and
managerial” post is not exclusive in a company and is subject to matter of fact .Also there are
cases in which court held that executive should ensure that where thetermination benefit
given given to them is not under the exemption under 200Bof the corporation act 2001,
there must be shareholders approval (Robinson, 2013). In Renshaw v. Queensland Mining

corporation limited 2014, termination benefit given should subject to shareholders approval if
beyond the exemptions under section 200B Of corporation act (Srivas, 2016). The court
found that the Termination benefitsgiven under section 200B of Part 2D.2 of the
Corporations Act 2001 which precludes the giving of a termination benefit from a
managerial or executive office without shareholder approval. There are some cases of
termination in which employer no longer want a individual employee and terminate the
employee on reasons which are not reasonable and that leads to situations which are unfair
dismissal (Stockwell, 2019). In UES (Int'l) Pty Ltd v Harvey [2012] 5241, court held that
dismissal under genuine redundancy must be corresponded to the employee. In the case
mentioned the full bench of Fair Work Australia if employer failed to contact with
employee while terminating him from serving further with the organisation or making him
redundant, is not reasonable and sufficient to lead to case to be termed as harsh and unjust. In
the case of unfair dismissal it will not be employee responsibility to indenting
redeploymentcontacts .
References
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