Posted on 30/04/2018 by Laura Fox
What you need to know about the upcoming disqualification rules for senior managers
Did you know that from 1st August 2018, automatic disqualification rules that relate to Trustees of charities will be extended to those in senior management roles?
I recently attended Unlock’s ‘Advising with Conviction’ training where I learnt about this upcoming new rule, so have put together the main points on handling these rules for current and future recruitment.
What are the current automatic disqualification rules?
The current rules only disqualify certain people from becoming a charity Trustee, if they have an unspent conviction. The disqualifying reasons are mainly bankruptcy, but they also include unspent convictions for crimes involving deception or dishonesty. You can view a full list of disqualifying reasons here.
The new automatic disqualification rules
From 1st August 2018, people who are disqualified from being a Trustee will also be disqualified from holding certain senior positions within a charity. Not only this, but the disqualifying reasons have been increased to include unspent convictions, such as money laundering or terrorism.
‘Senior manager’ positions are defined in the official government guidance, but it would cover anyone who acts as the charity’s most senior executive or works in a managerial capacity that only answers to the Board, or who has control of the charity’s finances. The most common positions this would refer to are Chief Executive or Director/Chief of Finance; yet, it is important to understand that it is the function of the role and not the job title that this new rule would apply to.
How to prepare for the changes – new appointments
If you are currently recruiting for a Trustee or senior manager, you should be implementing processes to ensure these checks are being done. Charities should already have something in place for Trustees, so this will simply need to be extended to relevant senior managers.
Prospective Trustees and senior managers should be signing a declaration to confirm they are not disqualified; a model declaration was published on www.gov.uk which charities are encouraged to use. It must be signed before the appointment is made.
How to prepare for the changes – people already in post
You should already have asked your Trustees to sign a declaration, but because there have been changes to the disqualifying criteria, they will need to complete a new one.
You will need to update your procedures for people in post so that Trustees and senior managers are periodically signing a declaration; it is up to you to decide at which intervals to ask for a new one.
What if someone already in post is affected by the new rules?
Unfortunately, there will be a small number of Trustees or relevant senior managers disqualified by the new rules. If you have amended your procedures to reflect the changes, your charity will become aware of this. People in this position will not be able to continue in their position as it will be a criminal offence for them to do so.
Serving Trustees and staff in senior management positions will have to formally resign from their roles; however, the charity may also need to take legal advice if a senior manager becomes disqualified, to see how this could affect their employment rights.
It isn’t the end of the road
If a disqualified person is in, or applies, to a relevant role in your charity, your Trustees can decide if they would like to support a waiver application for that person, so they can continue in their role. A waiver can bring a disqualification to an end:
- for a specific charity or named charities
- for a ‘class’ of charities (charities with the same charitable aim)
- for all charities
The Charity Commission will decide each case on its own merits; but it’s worth mentioning that for the small number of waiver applications that the Charity Commission has received, the vast majority have been granted.
For the full guidance on the new disqualification rules, please visit gov.uk
At TPP, we take compliance very seriously and have REC Audited status. If you have any questions about the new regulations please contact Laura Fox, Compliance and Central Support Manager, on email@example.com or 020 7198 6000.