Presentation by Peter McPartland LLB, Liverpool John Moores University

1. Charity Update
Peter McPartland LLB, LLM Solicitor
Liverpool John Moores University
School of Law

2. Going to Concentrate on
Small Charity Issues.
• Regulation
• Governance/Structure
• Employment Law

3. Regulation

4. 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

5. 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

6. So how did we get here?

7. Proactive Regulator
December 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.

8. 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.

9. 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

10. 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.

11. 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.

12. Governance

13. 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

14. Employment

15. 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.

16. 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

17. 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.

18. 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.

19. 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.

20. 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.

21. 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

22. Don’t Panic
Good time to have LCVS check your
governance and finance procedures