UK: Round-up of Recent Developments (Charities)

Last Updated: 3 February 2005
Article by Oenone Wright and Guy Greenhous

Originally published September 2004

Public Benefit

In June we issued a Briefing on the draft Charities Bill giving an overview of the main provisions. Over the Summer much has been written about the proposed new "public benefit" tests, given the removal of the presumption of public benefit from charities which relieve poverty, advance religion or advance education. There is still no certainty on this point but the Charity Commissioners have indicated that they will be consulting with charities to establish generally accepted standards that can be applied in each relevant sub-sector. They have also just put new guidance on their website: Public Benefit Checks – how will we carry them out?

Operational Issues

With all the attention that has been paid to the draft Charities Bill other operational issues may have been given less attention than usual. The Charity Commissioners’ "Questions to consider at key stages in the life of a Charity" is therefore a timely reminder of matters that should be kept under review.


There are a number of changes in employment law that come into effect in October this year.

  • Dismissal, Disciplinary and Grievance Procedures

All charities should, if they have not already done so, review their dismissal, disciplinary and grievance procedures so that they are in a position to comply with the 1st October deadline which introduces statutory dismissal, disciplinary and grievance procedures under the Employment Act 2002. These do not replace the current requirement for a fair dismissal procedure. Therefore, in implementing a dismissal the employer will both have to comply with statutory procedures as a minimum, with the consequences shown below if he does not, and follow fair dismissal procedures, with the risk of compensation for unfair dismissal if he fails to do so. If you already have written procedures you will probably have incorporated all the necessary points but this does need to be checked.

The intention behind the new law is to resolve disputes without recourse to the Employment Tribunal and to ensure that all concerned are aware of the issues and have a fair chance to be heard.

The procedure applies to all dismissals, not just those where the employee is at fault. For example, it will apply when a fixed term contract of a year or more expires without being renewed, if dismissal is on grounds of age (where the employee has not reached the normal retirement age in the company or 65) or where an employee is dismissed for health reasons. A redundancy will also be a dismissal to which the procedures apply.

  • Statutory Dismissal and Disciplinary Procedures

There will be a standard procedure that applies in most cases but there is a modified procedure where summary dismissal for gross misconduct is in issue.

Regulations have been made which set out the circumstances in which the dismissal and disciplinary procedures do not apply or will be regarded as having been completed but, in all other cases, they must be followed.

Except in the specified circumstances a failure to apply the procedure or to complete it will render a dismissal automatically unfair if that failure is the employer’s fault. There will also be an increase in compensation of between 10% and 50% where the failure is the employer’s fault, with a corresponding decrease where the failure is the employee’s fault.

Where there is an automatically unfair dismissal as a result of failure to apply and complete the statutory disciplinary procedure the minimum basic award will be based on four weeks’ pay.

  • Statutory Grievance Procedure

A statutory grievance procedure comes into effect on 1st October at the same time as the statutory disciplinary procedure. The employee should use the procedure wherever the grievance could form the basis of a complaint to an Employment Tribunal, including alleged constructive dismissal.

The employee is obliged to set out the grievance in writing and to send it to the employer who must then arrange a meeting with the employee, notify the employee of the decision and advise the employee of his right to appeal. The right to appeal is entrenched in the new statutory grievance procedure.

There is a modified procedure where the employee has ceased to be employed, the employer was unaware of the grievance before the employee ceased to be so employed (or had failed to commence or complete the standard grievance procedure) and both parties have agreed in writing to apply the modified procedure.

Again, Regulations list circumstances in which the new statutory grievance procedure will not apply.

If the employee fails to follow the statutory grievance procedure then there is a mandatory reduction of any award made by the Tribunal of between 10% and 50%, unless the Tribunal believes that such a reduction would be unjust or inequitable.

In order to give time for a grievance to be heard, the time limit for making a complaint to a Tribunal will be extended by three months, provided that the statutory grievance procedure was initiated within the normal time limit for making a complaint to the Tribunal.

  • Communication of dismissal, disciplinary and grievance procedures

From 1st October any employer who has not already issued a written document to employees setting out dismissal, disciplinary and grievance procedures that incorporate the basic minimum required by the new statutory procedures will have to issue a new written document setting out the dismissal, disciplinary and grievance procedures. Obviously, if an existing set of procedures is amended in the light of the new law, then the revised procedures must also be communicated in writing to all employees.

Failure to issue the written document could make an employer liable for an additional fine of up to four weeks’ wages in the event of a successful claim by an employee in an Employment Tribunal.

The procedures apply equally to part time and full time staff.

The ACAS Code of Practice on Disciplinary and Grievance Procedures has also just been updated to take account of these new procedures.

If you would like detailed advice on any aspect of the new procedures please get in touch with your usual contact here who will arrange for a member of the Employment Group to assist.

Other employment news

  • Disability Discrimination Act - 1st October is also the deadline for ensuring that appropriate physical adjustments have been made to premises where goods or facilities are made available to the public.
  • National Minimum Wage - increases come into effect in October increasing the hourly rate for adults to £4.85, for those aged 18 to 21 to £4.10 and introducing the new rate for 16 and 17 year olds of £3.00 an hour.
  • Temps/agency staff – a recent case (Dacas v Brook Street Bureau (UK) Limited) will be of concern to charities that regularly use temps. The Court of Appeal in this case held that the end user rather than the Agency was the employer. The Court of Appeal held that the Agency could not be the employer as it did not have an obligation to provide work, nor was there any obligation if work was provided that the individual should accept that work, and the Court felt that it was not credible that the individual had no employer. This meant that the end user was regarded as the employer on an implied contract regardless of the terms of any contractual arrangements with the Agency.

This means that recruiting staff through an Agency will not necessarily protect you against employer liabilities and obligations.

© RadcliffesLeBrasseur

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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