Charity Update

Peter McPartland LLB, LLM Solicitor

Liverpool John Moores University

School of Law

Going to Concentrate on Small Charity Issues.

• Regulation• Governance/Structure• Employment Law

Regulation

Queen's Speech 2014: Draft Protection of Charities Bill

• The draft Bill also aims to better protect charities in England and Wales from abuse by people who present a known risk.

• 17 Major changes to current legislation

• The proposals in the draft Bill aim to:– provide greater protection for charities from risk– make it easier for the Charity Commission to take robust

action against individuals and charities in cases of abuse– support public trust and confidence in the effective

regulation of charities

What May Change• Official warnings by the Commission• Investigations and power to suspend • Range of conduct to be considered when exercising powers• Power to remove trustees etc following an inquiry • Power to remove disqualified trustee • Power to direct winding up • Power to direct property to be applied to another charity• Automatic disqualification from being a trustee• Power to disqualify from being a trustee • Records of disqualification and removal • Participation in corporate decisions while disqualified

So how did we get here?

Proactive RegulatorDecember 2013 Audit Commission Report

• Becoming registered as a charity does not indicate an organization has passed a quality threshold. It merely means that the organization meets the statutory criteria for registration.

• Nonetheless, registration is seen by many donors as a ‘kite mark’ that increases their confidence in, and likelihood of, giving to a charity. The Commission’s regulatory activity is important in upholding the public’s confidence and trust in charities generally.

Proactive Regulator

• The Commission continues to make little use of its statutory enforcement powers.

• The Commission relies heavily on trustees’ assurances, but should do more to check whether trustees have actually complied.

• The Commission is reactive rather than proactive, making insufficient use of the information it holds to identify risk.

Proactive Regulator• A regulatory case report into two charities - were published in

January.

• The Commission’s press report on this case uses the word “proactive” in three out of four of the paragraphs!

• New CEO at the Charity Commission appointed & has stated that the Commission will be more proactive under her leadership (Paula Sussex)

• Campaign on late filers and new guidance issued last month

Proactive Regulator

• Annual returns• The Commission is also reminding trustees that

charities required to file accounts,

• i.e. those with an income of over £25,000,

• must confirm, in their Annual Return, that no serious incidents occurred which should have been reported.

Proactive Regulator

• The Commission's regulatory response to a problem will depend on whether or not trustees made a serious incident report, and how promptly the report was made.

• Any failure to promptly report an incident may be considered to be mismanagement and the Commission may take regulatory action, particularly if further damage resulted from the initial incident.

• The alert also says any potential reputational damage can be mitigated if trustees can demonstrate that they acted responsibly in handling the problem.

Governance

Charitable Incorporated Organisation

• Not new • But now open for small unincorporated Associations to

convert.• Not a company• Separate legal personality from trustee/members• Administered solely by the Charity Commission• Assets and liabilities belong to the CIO• Greater protection for Trustees/Members

Employment

ACAS Early Conciliation Scheme

• From 6 May onwards it will not be possible to start an employment tribunal claim without first involving ACAS.

• Potential claimants in must approach ACAS before issuing proceedings. There will then be a month-long period during which an ACAS conciliation officer must “endeavor to promote a settlement”.

• If, at any stage in this process, the conciliation officer concludes that a settlement cannot be reached, he or she must issue an early conciliation certificate.

• The conciliation period ends once the potential claimant has received this certificate.

Time Off for Antenatal Appointments

• husband, civil partner or partner of a pregnant women has the right to unpaid time off to attend up to 2 ante-natal appointments.

• 1 October 2014

Shared Parent Leave

• From 5 April 2015

• parents to choose how they share the care of their child during the first year after birth.

• Mothers will take at least the initial two week following the birth,

• after that they can choose to end the maternity leave and the parents can opt to share the remaining leave as flexible parental leave.

Statutory Adoption Leave & Pay

• From 5 April 2015

• The statutory adoption leave will no longer have the 26- week qualifying period, and adoption pay will be brought in line with maternity pay.

• This will be 90% of normal earning for the first six weeks.

Parental Leave

• From 5 April 2015

• The right to unpaid parental leave will be extended to parents of any child under the age of 18 years.

Surrogate parents eligible for adoption leave

• Subject to eligibility criteria from April 2015

• Parents who have a child through surrogacy will be permitted to take ordinary paternity leave and pay, adoption leave and pay and shared parental leave and pay.

• Both parents will also be entitled to take unpaid time off to attend two antenatal appointments with the woman carrying the child.

Bear Scotland Ltd v Fulton

Voluntary overtime was not typically included when calculating a worker's rate of holiday pay. The judgment has clarified that:

•Workers should have non-guaranteed overtime taken into account when they are being paid annual leave.

•The judgment only applies to 4 weeks of a worker's annual leave

•May be an Appeal

Don’t Panic

Good time to have LCVS check your governance and finance procedures