A stitch in time
by Jenny Ward
2 December 2004
All charities have to comply with Charity Law and those who are charitable companies with Company Law too. How many of you have looked at your governing document (constitution/ trust deed/ memorandum and articles) recently and checked that you are working within the “objects”?
Drifting away from the original objects of an organisation is all too easy, especially in pursuit of “pots of gold” in the way of contracts and project-based grants.
Take for example an imaginary organisation working with under-fives called “Reading Jelly Tots” which has in its objects that it will work with children under five in Reading. A new funding stream is on offer for groups aimed at 6 to 10 year olds and Reading Jelly Tots has a great idea for a project. However without changing their objects (and getting agreement from the Charity Commission – who may also question whether such a change is appropriate with the title of the group!) they cannot run such a project or apply for the grant. If they do – without obtaining permission from the Charity Commission – they are acting “ultra vires” and undertaking work not permitted by the objects. The Trustees could be liable for such action and would not be protected by trustee liability insurance or incorporation.
The complexity of legislative requirements for voluntary organisations continues apace. In the field of employment law over the past year we have had changes to dispute resolution and dismissal procedures, disability discrimination, maternity pay and leave, paid paternity leave, “weekly pay" and unfair dismissal awards, fixed-term contracts, rights for agency workers, equal pay, foreign nationals working in the UK, criminal record checks, minimum wage, holiday leave and pay), race equality, sex discrimination and harassment, discrimination on the grounds of religion and other belief/ sexual orientation – to name but a few.
If your organisation has to make someone redundant, or they have come to the end of a fixed term contract, or a member of staff has reached retirement age, did you know that it is not enough just to give notice? Employers now have to meet with employees in all these examples. Failure to follow the new procedures (which came into effect on October 1st 2004) could mean that the employee could take your organisation to an employment tribunal.
Employment Tribunal awards for unfair dismissal can be as high as £63,000 – or if reinstatement or re engagement is ordered but not complied with – unlimited. A dismissal will automatically be deemed unfair by a Tribunal if the new “statutory dispute” procedures have not been complied with – no matter what the reason was for the dismissal.
Here again the Trustees could be personally liable. The Trustees as the governing body are responsible for ensuring the organisation carries out its objects and works within its powers as set out in its governing document. Statutory and common law obligations must also be met.
The governing body has indeed onerous responsibilities and needs to seek proper advice and information about legal requirements and other decisions.
If this all sounds like a plug for RVA’s Advice Service and training resources then I admit that it is! In March we will be running a training course on employment law for voluntary organisations, and also a course covering the responsibilities of trustees and working well as a committee is planned for April. Of course I am available for groups and organisations to contact and discuss individual issues too and remember - a stitch in time saves nine!
