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CS Professional · Insolvency and Bankruptcy - Law and Practice · Winding-Up by Tribunal

While an inspector investigates Lotus Pharma Ltd under section 210, the board proposes to dismiss its finance manager. What must the company do under section 218?

The company must apply to the Tribunal for approval of the dismissal. Under section 218, it may proceed against the employee only if it does not receive approval within thirty days of applying; if the Tribunal objects, the company may appeal to the Appellate Tribunal.

  1. ADismiss him after informing the inspector
  2. BObtain approval of the Tribunal for the proposed action, and may proceed only if it receives no response within thirty days of applyingCorrect
  3. CAct freely, as section 218 covers only directors
  4. DSeek approval of the Appellate Tribunal before applying to the Tribunal

Explanation

Section 218 requires a company to obtain Tribunal approval before discharging, punishing or worsening the terms of an employee during an investigation under section 210. Under sub-section (2), only if no approval is received within thirty days of the application may it proceed. Appeal to the Appellate Tribunal lies only against an objection raised by the Tribunal.

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