Schools Law Brief

20 March 2008

Charity Commission publishes fee-charging guidance

The Charity Commission has now published its sub-sector, public benefit guidance for fee-charging charities. This will of course be of great importance to the sector and to those governors of charitable independent schools, who will soon be under a statutory duty to consider the Commission's guidance on public benefit.

The guidance is currently in draft form and is open for consultation until 11 July this year. The final guidance is expected in December.

The draft guidance sets out a number of issues for governors and trustees to consider - including why their fees are set at the level they are, what the impact of these fees will be on access to the services provided and in what ways the school can provide opportunities for those unable to afford the fees to benefit from the school's activities.

Issues open to consultation include:

whether direct fee support (e.g. bursaries) should be regarded as more valuable in terms of public benefit than other indirect methods (e.g. state sector collaboration or community access to facilities); and
whether it should matter that any fee support has come from the charity itself, another charity, third party or the local authority.

The guidance has already caused some controversy within the sector. It has been claimed that the guidance does not accurately reflect the current law on public benefit. This makes the consultation an important process and fee-charging charities are encouraged to respond to the consultation.

Veale Wasbrough will be responding to the consultation and we will be happy to collate any responses from our clients and include them with our response.

Click here for draft guidance.

For further information or to send us your views on the guidance contact Barney Northover on 0117 314 5395 or at bnorthover@vwl.co.uk.

Companies Act 2006 - More implications for Independent Schools

The Companies Act 2006 is the longest piece of legislation on the statute books. It was introduced in response to criticism that the "one-size-fits-all" approach to company law - where the rules apply equally to PLCs and smaller charities and businesses - placed an unfair regulatory burden on smaller companies. The Act is therefore intended to rectify this by simplifying the company law regime.

In December 2007 we reported in Schools Law Brief that the majority of the provisions in the Companies Act 2006, which affect independent schools structured as limited companies and their trading companies had come into force. This article draws attention to major changes which came into force in October 2007 and affect the duties that apply to a company director. Previously these were only set out in case law. Now they are codified in the Act.

It is stated that directors must exercise their duties in a manner that they believe (in good faith) is likely to promote the company for the benefit of the members as a whole. This is not a departure from the previous law.

However, the Act now sets out a number of factors which directors must take into consideration in making decisions on behalf of the company, namely:

the likely consequences of the decision in the long term;
the interest of the company's employees;
the need to engender relationships with suppliers, customers and others;
the impact of the company's operations on the community and environment;
the desirability of maintaining a reputation for high standards of conduct; and
the need to act fairly between members.

It is not yet clear how this provision will be interpreted and there is much discussion as to the extent to which (or indeed whether) the thought process of directors during decision-making will need to be evidenced in some way.

Official guidance states that companies should ensure that all directors are aware of their duties under the new Companies Act but goes on to say that formal records of decision-making processes need only record consideration of the six factors set out above where the circumstances make it particularly necessary or relevant.

For further information contact Robert Collier on 0117 314 5472 or at rcollier@vwl.co.uk.

Planning a Capital Project?

Independent schools are often classed as businesses in connection with many of their activities and must therefore comply with a raft of regulatory legislation.

The Site Waste Management Plans Regulations 2008 which come into force in England on 6 April 2008 place new requirements on businesses in relation to construction projects. These regulations are designed to encourage more efficient use of materials and more effective disposal of waste materials.

A Site Waste Management Plan ("SWaMP") must be prepared before construction work can begin on any construction project with an estimated cost greater than £300,000 (excluding VAT).

The SWaMP must record, amongst other things:

the identity of the client, the principal contractor and the person who drafted the SWaMP.
the types, and the estimated quantity, of waste materials expected to be produced in the course of the project and the waste management action proposal for each type of waste (i.e. recycling, recovery or disposal).
a declaration that the client and principal contractor will take all reasonable steps to ensure that any waste is dealt with in accordance with current environmental legislation.

The onus will be on the school as the client to ensure that a SWaMP is prepared prior to work commencing. However, the client may delegate the preparation of the SWaMP to its consultants and/or the principal contractor.

Once the works have commenced, the principal contractor must ensure that the SWaMP is complied with and updated as necessary in accordance with the Regulations.

A copy of the SWaMP must be kept on site and the principal contractor must keep a copy of the SWaMP for two years after completion of the project.

Failing to prepare or maintain a SWaMP is a criminal offence. If convicted, the offending party can be subject to an unlimited fine. Further, where a 'body corporate' is guilty of an offence, and that offence is found to be attributable to the actions, or neglect, of an officer of the company, then that officer will also be guilty of an offence and potentially subject to an unlimited fine. For schools, this could include a Governor, Headteacher or Bursar.

For further information contact Tom Weld on 0117 314 5436 or at tweld@vwl.co.uk.

Ain't misbehaving

There is a difficult balance for schools in trying to maintain discipline but avoid claims for discrimination under the Disability Discrimination Act 1995 where a child has been diagnosed with a behavioural disorder.

The lesson to be learned from two recent cases is that schools must recognise and address behavioural syndromes with the aid of expert advice. There may well come a point where the child has to be excluded for the sake of the whole school community but all reasonable steps should be taken to avoid that point being reached.

A 13 year old girl pupil was diagnosed with Attention Deficit Hyperactivity Disorder (ADHD) which is accepted to be a disability. She was temporarily excluded from school on four occasions over an eight month period. Her parent claimed disability discrimination. This was supported by the Special Educational Needs and Disability Tribunal (SENDIST) because of the clear link between her disability and her behaviour. The School appealed against this finding to the High Court. In the meantime, the girl's behaviour deteriorated and she was excluded permanently. Her appeal against the permanent exclusion was heard by an Independent Appeal Panel which upheld the exclusion on the grounds that the school had done everything it could to cater for the pupil's needs.

There were then two appeals which were heard on the same day by the same judge. First, in Governing Body of X School v SP and another [2008] All ER (D) 05 Mar the School appealed against the SENDIST decision. This failed because the evidence before the SENDIST clearly showed a link between the girl's behaviour and her disability. The court agreed that there was a lack of evidence from the school on any reasonable adjustments that should have been made to avoid the difficult behaviour which led to the fixed term exclusions.

Then in R (on application of N)v Independent Appeal Panel for Barking and Dagenham LBC [2008] All ER (D) 06 (Mar), the parent challenged the Appeal Panel's decision. Rather curiously, the judge held that the Panel was entitled to come to a different conclusion on the link between the pupil's behaviour and her disability and upheld the Panel's decision, saying that the permanent exclusion was related to different incidents and the Panel was entitled to come to the decision that it did. It is possible that the second decision will be appealed given its apparent contradiction of the first.

For further information contact Christine Betts on 0117 314 5279 or at cbetts@vwl.co.uk.

Employment Roundup

£16,000 for discrimination on the grounds of age

In Wilkinson v Springwell Engineering Limited ET/2507420/07 the tribunal found that S had discriminated against W, an 18 year old employee, when it dismissed her on the grounds that she was too young for the job. It found that S had made a stereotypical assumption that there was a relationship between age, experience and capability.

The tribunal awarded W £16,000 comprising loss of earnings up to the hearing, future losses of 26 weeks, an award for £5,000 for injury to feelings and an uplift to the compensation on the basis that S had failed to follow any procedure before dismissing her.

This case provides a salutary warning for employers that they must have procedures in place for managing and dismissing all employees, even probationers. It was S's inability to point to any concrete evidence of poor performance, or indeed, any attempts on their part to deal with W's performance which led the tribunal to find against them and accept W's evidence. Employers who come to a tribunal hearing unable to produce evidence on the reason why an employee was dismissed or treated differently will always be at risk of such a finding.

For further information contact Simon Bevan on 0117 314 5238 or at sbevan@vwl.co.uk.

Bullying in the workplace

In recent times, employees complaining of bullying behaviour have turned to the Protection from Harassment Act 1997.

This makes such behaviour (depending on the seriousness) a criminal offence. Employers are liable for such behaviour if carried out in the course of employment, for example, by a manager or by colleagues.

However in the recent case of Sunderland City Council v Conn [2007] EWCA Civ 1492 it was held that the behaviour has to be bad enough to justify the criminal liability laid down in the Act. Ordinary unattractive or even unreasonable behaviour is not enough. It must cross the line into what is clearly oppressive and unacceptable.

For further information contact Richard Hewitt on 0117 314 5320 or at rhewitt@vwl.co.uk.

Sexual orientation

In English v Thomas Sanderson Blinds Ltd (EAT ureported) Mr English made a claim under the Employment Equality (Sexual Orientation) Regulations 2003. He had been subjected to homophobic "banter" in the workplace on the basis that he had been to boarding school and lived in Brighton. In fact, the EAT heard, he is not homosexual. Moreover, his work colleagues know that he is not.

It was held that the teasing behaviour was unacceptable but was not based on the fact that Mr English was or was perceived to be homosexual. So the behaviour did not fall foul of the Regulations.

But it does not end there. The UK Regulations have not full implemented the European Equal Treatment Framework Directive. So Mr English will appeal to the Court of Appeal and if he loses again, there may be a change in the Regulations to cover the circumstances of cases like this.

For further information contact Naseem Nabi on 0117 314 5630 or at nnabi@vwl.co.uk.

Increases to SSP etc

From 6 April 2008 Statutory Sick Pay goes up from £72.55 to £75.40. Statutory Maternity, Paternity and Adoption Pay goes up from £112.75 to £117.18.

For further information contact Rachel Ackroyd on 0117 314 5641 or at rackroyd@vwl.co.uk.

This publication is for guidance only. Reliance should not be placed upon it and nor should action be taken, without obtaining advice in respect of the specific circumstances applicable. We will be pleased to provide such advice or assistance.