Charities and Social Enterprises Legal Update Thursday 22 nd March - - PowerPoint PPT Presentation
Charities and Social Enterprises Legal Update Thursday 22 nd March 2018 Ward Hadaway Guest WiFi Email: guest@wardhadaway.com Password: F1rew0rk$ Newcastle | Leeds | Manchester Housekeeping 2 Ward Hadaway Guest WiFi Email:
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Thursday 22nd March 2018
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Housekeeping
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Agenda
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8.00am Registration & refreshments 8.30am Introduction 8.35am Legal Update 8.55am
The potential impact of the Taylor review of modern working practices and the legal status of volunteers and intern
9.20am Measuring Social Impact 9.45am GDPR update 10.10am Questions 10.30am Networking and close
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Fiona Wharton, Partner
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Introduction » Statistics » In the News » New legislation, guidance and consultations » Other reports and matters
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Statistics » From the Charity Commission (March 2018) » 900,000 NFP/voluntary sector » approximately 380,000 charities » 183,000 registered charities (15,000 linked) (highest for 10 years) » assets £264 billion » 39% less than £10,000 income » 72% income accounted for by 1.3% of charities » only 2,245 charities with income greater than £5 million » over 1 million paid staff » 950,000 trustee roles, occupied by approximately 700,000 people » 40% increase in applications for charity registrations » 3.6 million volunteers
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Statistics » Charity Commission: compliance cases » 503 monitoring » 1664 Regulatory Compliance » 618 governance » 187 Statutory Inquiry » 166 governance » 894 sets of accounts reviewed » 142 whistleblowing enquiries » 92 governance » 15 safeguarding » 2182 serious incidents reported » 1203 safeguarding (Commission definition) » 296 fraud/money laundering
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In the News » Oxfam » Charity Commission Statutory Inquiry »Governance »Disclosure to Charity Commission and others »Recruitment practices »Supervision of staff, volunteers »Progress with Charity Commission 2017 action plan » DFID and Charity Commission safeguarding summit » Government – aid watchdog? » 302 regulatory compliance cases on safeguarding (up from 163) » Charity Commission updated Safeguarding Guidance
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In the News » Charity Commission » new Chair and Chief Executive » Wider remit » renewed MOU with DfE » Charging for Charity Commission services » consultation planned » primary legislation will be required
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In the News » The Presidents' Club Charitable Trust » returning or keeping money »demonstrate in best interests of charity »check for restrictions on whether donation can be returned »may require Charity Commission consent » refusing donations »trustees act in best interests of charity »consider how funds raised, reputation, financial impact of refusing
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In the News » Grenfell and Terrorist Attacks » co-ordinate future responses to national critical incidents » Grant making charities » clarity of grant criteria » procedures and process
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New legislation, guidance and consultations » Legislation » CIO Regulations: conversion of charitable companies (& CICs) to CIOs (23 November 2017) »phased timetable 1 January – 1 August »smallest first »CICs September 2018 (consultation) »process includes new constitution and special resolution »date of conversion and removal at Companies House: same day » Business Names Index »sensitive words »letter of non-objection from Companies House
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New legislation, guidance and consultations » Automatic disqualification and waiver » waiver form February 2018 » auto disqualification 1 August 2018 » more reasons for automatic disqualification » new Charity Commission guidance » bankruptcy, unspent convictions for crimes involving dishonesty and deception » applies to trustees and senior managers (CE and CFO) » check recruitment systems, systems to identify current post holders » register of Disqualified Persons
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New legislation, guidance and consultations Law Commission: Technical Issues in Charity Law » For charities » more flexibility to obtain tailored advice when sell land, and removing unnecessary administration burdens » changes to law to help charities amend their governing document more easily – still with Charity Commission oversight where appropriate » increased flexibility to use their permanent endowment » removing legal barriers to charities merging » Charity Commission » single set of criteria to decide changes to a charity's purposes » increased powers to prevent charities using misleading names » ability to confirm trustees were properly appointed
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New legislation, guidance and consultations » Charity Governance Code 7 principles » Organisational purpose » Leadership » Integrity » Decision making, risk and control » Board effectiveness » Diversity » Openness and accountability » 2 versions: large and small charities » How has your charity implemented the Code? » Volunteer – run only charities - code to come » In discussion with funders » www.charitygovernancecode.org
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New legislation, guidance and consultations » Charity Commission Guidance: updated and new guidance » CC3: The Essential Trustee » How Charity Commission assesses waiver applications and makes decisions » CC32: Independent examination of charity accounts » CC25 Charity Finances: trustee essentials » Charity governance, finance and resilience: 15 questions trustees should ask » Safeguarding » Protect your charity from fraud » Serious Incident reporting
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New legislation, guidance and consultations » Charity Commission » Charities working internationally (25 March) » Charities working with non-charities maintaining your charity's separation and independence (15 May) – may be second consultation » Annual Return 2018
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New legislation, guidance and consultations » Fundraising Regulator » Code of Fundraising Practice »Data protection updates » National Cyber Security Centre » Small Charity Guide » Information Commissioner
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Other reports and matters » House of Lords Select Committee on Charities » 43 recommendations » Charity Commission response »Term of office for trustees: 9 years »Charity Commission to update model Articles
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Other reports and matters » Eastside Primetimers » The Good Merger Index 2016/2017 »167,000 charities – only 142 merged but 1700 new » New Philanthropy Capital / Lankelly Chase Foundation: Thinking Big » New Philanthropy Capital » Merger Articles » IPPR Report: The Value of Business to the Third Sector in the North
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Other reports and matters » More regulator changes » HCA – Homes England » Changes to consent and notification procedures for social housing bodies » Children's Investment Fund Foundation (UK) v Attorney General [2017] » membership of a company limited by guarantee
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Any questions? Fiona Wharton Partner | Head of Charities and Social Enterprise E: fiona.wharton@wardhadaway.com T: 0191 204 4219
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Jamie Gamble, Partner
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Content » Employment Status » The Taylor Review » Volunteers
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Employment status » Employee means "an individual who has entered into or works under a contract of employment" » Contract of employment means "a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing" » Key factors
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Employment status » Worker: » A contract of employment. » Any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.
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Employment status » Is there a contract? » Offer » Acceptance » Consideration » Intention to create legal relations
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Determining employment status
Provide work Accept work
How to do it When to do it Where to do it What to do
Right of substitution
Provision of equipment Degree of integration Financial risk Opportunity to profit 28 28
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Why does it matter
Employee Worker Self employed
Same rights as workers National Minimum Wage Protection for health and safety on clients premises Statutory maternity/paternity/ adoption/shared parental leave Paid annual leave Protected against discrimination in some cases Protection against unfair dismissal Statutory maternity / paternity / adoption pay Statutory redundancy Protection against unlawful discrimination Written statement of employment, itemised pay slip & minimum notice of dismissal Right not to be treated less favourably if they work part- time. Right to request flexible working 29 29
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Casual workers » Often found to be "employees". Need to consider: » Reality of the relationship » Context of the relationship » All the relevant evidence » Can change over time - regular pattern of work » Helpful to have a clear distinction between casual workers and employees » Internal label » Benefits
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The Taylor Review Independent review of modern working practices which made number of recommendations to improve the working conditions of atypical workers.
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The Taylor Review – recommendations » Worker status should be retained » New legislation to bring clearer definitions of employees, workers and the self-employed. » Rename "workers" who are not employees as "dependent contractors" » Make the definition of "dependent contractors" clearer » SSP to apply to all workers, regardless of income but to accrue based on length of service » More emphasis on the control test for workers
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The Taylor Review – recommendations » Treat workers as employed for tax purposes » Grant workers a new right to a written statement at the start of their engagement » Specify a standard format for written statements and provide a standalone right to compensation for failure to provide one » Zero-hours and short-hours workers should be entitled to request a contract that guarantees hours if they have been in the post for 12 months – the average weekly hours over the last 12 months should be the starting point » Agency workers should be given the right to request a direct contract of employment after 12 months with the same hirer
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The Taylor Review » Government published their response in February 2018 » Vowed to give workers (including causal and zero hours) basic rights and payslips and make sure all workers receive holiday and sick pay » No concrete proposals on amending the law on employment status at present » Seeking to increase transparency in the employment relationship » Launched 4 consultations: » Employment status » Agency workers » Enforcement of employment rights » Measures to increase transparency in the UK labour market
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The Taylor Review – Employment Status » Government acknowledged there is a lack of clarity in this area » Has invited views on: » Whether changes to employment status law achieve greater clarity » If the tests be aligned to those in tax sphere » If case law be codified into legislation » If tests should be modified in any respect , e.g. place less emphasis on personal service or an alternative model adapted? » Whether individuals who are deemed employees for tax purposes enjoy the same rights? » The definition of working time for the purposes of the NMW (specifically aimed at gig economy businesses)
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Volunteers
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Volunteers » No legal definition of a 'volunteer' or 'intern' » Labelling someone a 'volunteer' or 'intern' will not prevent them from acquiring employee or worker status. The Tribunal will look at the reality of the relationship » Volunteer agreement: » Can be used to outline expectations » Should not be any obligations or sanctions » NMW implications if they are in fact a worker
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Volunteers – preventing employment status Avoid a contract Avoid benefits in kind (other than reasonable expenses or accommodation) Reimburse only for expenses incurred Differentiate between volunteers and paid staff Avoid disciplining volunteers Do not provide any reward (e.g. the promise of a job) Ensure volunteers are free to come and go as they wish Ensure there is no
provide work and to carry it out Only training that is relevant to the role
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Volunteers » Government guidance: » Reimbursement of reasonable out-of-pocket expenses alone is unlikely to make a volunteer a worker » Genuine honorarium in the form of an unexpected gift, with no
(avoid regular rewards and gifts) » Provision of clothing or equipment is unlikely to result in them being regarded as a worker if reasonable and required » Free entry to an event is unlikely to result in worker status if necessary to carry out the role
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Any questions? Jamie Gamble Partner | Employment E: jamie.gamble@wardhadaway.com T: 0191 204 4456
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‘A recent study has revealed that Nisa’s charity, Making a Difference Locally creates social value of £5.16 for every £1 donated to communities served by its stores.’ December 2017 Study by: Kingston Smith Fundraising and Management
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Recycling Lives has created £9.3m in social value
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Services
Process for each service 1. Clear description 2. The assumed impacts 3. Strategic benefit 4. Current evidence 5. Evidence improvements 6. Limitations and mitigations 7. Ownership 8. Reducing 9. Internal reports
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Our principles 1) Who we help 2) Our services 3) The results for service users 4) The behaviours we believe in 5) Our business model 6) Managing the organisation
For each principle
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1) Truth before spin - don’t start with what you want the end measurement to look like. 2) Who and what is this for. Aim for embedded, driving and driven by strategy, culture, day to day decisions, internal and external engagement. 3) Ownership – a methodical person to drive it overall - each service ‘owns’ their impact measurement -engage stakeholders (board, beneficiaries, staff/volunteers, funders) - board champion to protect from whimsy. 4) Not everything is measureable. Use metrics and indicators where possible and, where not, include assumptions, research, what you believe or ‘front line’ evidence. 5) Case studies matter. Clear evidence that people remember stories better than facts – stories in evidenced strategy 6) Reduce the noise 7) The tyranny of metrics – know when you are oversimplifying. Be aware of perverse incentives
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Phil Tompkins, Partner
Newcastle | Leeds | Manchester
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What is GDPR? » Replaces Data Protection Act 1998 » Effective from 25 May 2018 » Brexit does not affect introduction » Regulation with direct effect
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GDPR » “The biggest change to data protection law for a generation” » Elizabeth Denham – The Information Commissioner
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What should you do now?
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GDPR – Myths and reality » Replaces the Data Protection Act 1998 » Data Protection Bill 2018 » Governs how organisation process personal data » Controllers must be able to demonstrate compliance with GDPR » Will affect every charity as every charity has personal data » Myths exploded: » "It's European legislation so it will go with Brexit" » "I'm a charity so it won't affect me" » "I fall below the size of organisation affected"
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GDPR – main issues » Changes to rules on consent » Accountability requirements » Enhanced security requirements » Obligations on data processors » Changes to data subject rights » Requirement to notify breaches » Fines
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Principles of processing » Must process in accordance with the 6 principles » Fair, lawful and transparent » Legitimate purpose » Adequate, relevant and limited » Accurate and up to date » Kept no longer than necessary » Kept secure » Must be able to demonstrate your compliance » Know why you process personal data » What is the legal basis for the processing?
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Consent » Many rely on consent:- » To process data for marketing/fundraising » Employee data » Consent is a freely given, specific , informed and unambiguous expression
» Implied consent (opt-out) no longer sufficient » Need opt-in or clear affirmative action » Need to keep record of how obtained consent » No consent if significant imbalance in relationship » e.g. employer/employee » Consent notice must be clear and not bundled up into a larger document » Consent vs legitimate interests
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Accountability » Obligation to demonstrate compliance with the data protection principles including » Data protection officers » Data protection impact assessments and privacy by design » Documentation »Processing record (250+ employees) »Privacy policies »record legal basis »Data protection impact assessment »Data breach log »Data protection policy »Consent record
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Rights » Subject access right » One month (can be extended if complex or numerous) » No fee (unless manifestly unfounded
» Have a process to handle requests » Right to erasure (to be forgotten) » Right to data portability » Other rights
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Security » Requirement to ensure appropriate security when processing personal data » What is appropriate security? » Balance state of technology with costs and impact and likelihood of risk » Take into account particular risks of the processing when assess appropriate security
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Data processors » Unlike DPA, processors can be liable for breaches under GDPR » Appointing processors » Appoint using written contract » Minimum contract requirements » Act outside authority – become controller » Sufficient guarantees regarding security » Direct obligations on processors
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Breaches and Fines » Breaches » Notify all breaches to ICO within 72 hours »Unless unlikely to be a risk to individuals » High risk breaches notified to individuals without undue delay » Keep a data breach log » Fines » Two levels of fine up to »Greater of €20m or 4% of group turnover »Greater of €10m or 2% of group turnover » Changes the risk profile of data protection » Other enforcement measures
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What to do now? » Audit » Know what personal data you hold, where it is, why you hold it, how you use it » Identify key risks » Appoint a DPO/data protection representative » Check your state of readiness » Put in place documentation and processes » Handle SARs » Processing » Legal bases for processing » Train your staff!
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Any questions? Phil Tompkins Partner | Company and Commercial E: phil.tompkins@wardhadaway.com T: 0191 204 4267
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Slides from today's seminar will be emailed to you shortly.