The incorporation of Caterers Ltd was preceded by a meeting between the board of directors and the senior managers of Casino Ltd where the reason for the creation of the new entity was discussed. The senior managers of Casino Ltd devised a strategic plan which called for a new corporate structure which will take into account that the catering and entertainment services of Casino Ltd has the potential to become a significant operation in its own right both within and outside the resort. The directors of Casino Ltd were genuinely impressed with the plan and believed it was in the long term interests of the company. They passed a resolution that the management of Casino Ltd put into place matters that will allow Caterers Ltd to pursue this new strategic objective.

The redevelopment of the current resort was central to the management plan approved by the board of Casino Ltd in relation to the creation of Caterers. This meant closure of many of the restaurants in the resort and the redundancy of 60 employees. These redundant employees were offered new, but identical, positions working in Caterers Ltd. Faced with the choice of an uncertain future, all 60 employees accepted the job offer with Caterers Ltd. As a result, the redundant employees no longer work under the previous 1 July 2005 contract of employment they had while working for Casino Ltd. Instead, they work under wages and conditions that are not as favourable as they had while working for Casino Ltd. However, these wages and conditions are comparable to people who work in similar industries.

Caterers Ltd, through its employees, started running the catering and entertainment services in the resort and due to the huge success of the business, Caterers expanded beyond the resort and started leasing outside premises to run a bigger catering and entertainment business.

The Trade Union, on behalf of the 60 employees working for Caterers Ltd is concerned about the practical effect of this corporate reorganization on employment conditions.

Assuming that the 1 July 2005 agreement between Casino Ltd and its employees is valid and that Caterers Ltd has been validly incorporated, advice the trade union as to its chances of success in enforcing that agreement. Refer to relevant statutes and case law based on Company Law.