Trustee pay raises legal queries

An increasing number of voluntary organisations are inquiring about paying board members, despite fears that it could open them up to litigation, according to leading charity lawyers.

Payment is being pursued partly because of the difficulty in finding the right calibre of trustees. Some charities are concerned they could be taken to tribunal by disgruntled former trustees.

William Garnett, partner and head of employment at Bates Wells & Braithwaite, said his law firm had noticed an increase in the number of inquiries.

"One of the difficulties in going down this route is that it becomes easy to think about charities as commercial entities rather than being there for their charitable objectives," he said. "You have to make sure that people are applying to come on the board because they are interested in the charity's development."

Emma Burrows, partner and head of the employment group at law firm Trowers & Hamlins, said more charity clients had contacted the firm because they felt payment would help attract high-quality trustees.

Some charities were concerned about recent employment tribunal cases where former paid board members of housing associations had tried to claim employment rights, she said. "They watch other sectors where they pay board members and see what developments there are," she said.

Peter Kyle, director of strategy and enterprise at chief executives body Acevo, said the recent cases where trustees had unsuccessfully claimed employment rights would alleviate concern: "I'm no lawyer, but if this kind of precedent is being built up it will become less of a concern to our members."

Also ...

A charity lawyer has raised concerns about applying new rules on paying trustees to unincorporated charities.

Sections of the Charities Act 2006 will allow charities to pay their trustees for extra services without permission from the Charity Commission (Third Sector, 13 February). But Philip Kirkpatrick, of Bates Wells & Braithwaite, said the rules were unclear for unincorporated charities.

He said trustees could not be paid unless governing documents permitted it. Section 64 of the Charities Act will allow charitable companies to change their memoranda to permit such payments, but it is unclear if unincorporated charities will be able to do this.

Kirkpatrick said: "It depends whether the power to pay trustees counts as an administrative power. I am waiting for a commission response about this."

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