Section 317 CAMA 2020
Section 317 Companies and Allied Matters Act is about Director’s contract of employment for morethan five years. It is under Chapter 11 (Directors) of the Act.
(1) The provisions of this section apply in respect of any term of an agreement where a director’s employment with the company of which heis a director or, where he is the director of a holding company, his employment within the group, is to continue or may be continued, than at the instance of the company (whether under the original agreement entered into in pursuance of it or not), for more than five years during which the employment—
(a) cannot be terminated by the company by notice ; or
(b) can be so terminated only in specified circumstances.
(2) References in subsection (1) to employment being continued (or its potential to be continued) are references to its being continued (or its potential to be continued) whether under the original agreement concerned or under anew agreement entered into in pursuance of the original agreement concerned prior to the expiration of the original agreement or within 6 months of the expiration of the original agreement.
(3) A company shall not incorporate, in an agreement, such a term as is mentioned in subsection (1) unless the term is first approved by a resolution of the company in general meeting and in the case of a director of a holding company, by a resolution of that company in general meeting.
(4) No approval is required to be given under this section by anybody corporate unless it is a company within the meaning of this Act, or if it is a wholly-owned subsidiary of any body corporate.
(5) A resolution of a company approving such a term as is mentioned in subsection (1), shall not be passed at a general meeting of the company unless a written memorandum setting out the proposed agreement incorporating the term is available for inspection by members of the company both—
(a) at the company’s registered office for at least 15 days ending with the date of the meeting ; and
(b) at the meeting itself.
(6) A term incorporated in an agreement in contravention of this section is to the extent that it contravenes the section, void, and that agreement and ina case where subsection (2) applies, the original agreements is deemed each to contain a term entitling the company to terminate it at any time by the giving of reasonable notice.
(7) In this section—
(a) “employment” includes employment under a contract for services ; and
(b) “group” in relation to a director of a holding company, means the group which consists of that company and its subsidiaries and for purposes of this section, a shadow director shall be treated as a director.
