The Main Issues Raised by the Trustees of the Charitable Organisation - Case Study Example

Business Law Introduction: The first aspect to be considered is that any charitable organisation which has an annual income over £5000 needs to be mandatory registered with the Charity Commission for England and Wales. (Information Sheet No. 12: Setting up a Society, Including a Model Constitution. 2007). It is seen that this organisation has an annual income of £10 million, and is also in charitable business of benefiting the community through rehabilitation of ex-convicts and reformed criminals. However, this case study does not consider whether the charitable organisation is a Trust or an unincorporated association. It is assumed that this organisation is an unincorporated one since it may not be a Trust organisation in its strictest form and structure. In most cases, an unincorporated charitable organisation has a written constitution, or binding covenant, or set of rules governing, or regulating the transactions of the body, appointment of office bearers and other staff and rules and regulations governing membership. It is necessary to consider the main issues raised by the trustees. Question 1: Why should employers adopt formal disciplinary proceedings when “we are all pulling in the same direction”? It could be said that, in as far as charitable organisations are concerned, the trustees assume very important roles and they could be held personally liable for debts of the charity. For example, if the trust incurs debts towards credit purchase of furniture and equipment, which does not have sanction of charitable committee, members could be liable for such payments. It does not have separate legal entity, unlike limited corporate trusts, and thus trustees could be personally liable for accrued debts of organisation. Another factor that is important in this context is that not being legal entities, charitable organisations cannot sue, nor be sued, or conduct any legal proceedings, outside the ambit of its constitution, or rules and regulations. In other words, both the institution and its trustees have unlimited liability. Unlike limited company charities, members could be held personally responsible for trust liabilities, whereas in limited liability trust, it would be limited to unpaid amount of their share capital. Thus, it is necessary that all charitable organisations, whether registered or unregistered, make up their own disciplinary framework which regulates the conduct and transactions of the members among themselves and with outsiders in order to reduce liability. Moreover,” Disciplinary rules and procedures help to promote orderly employment relations as well as fairness and consistency in the treatment of individuals.” (Code of Practice: Discipline and Grievances Procedures. 2004, p. 3). Question 2: What type of situation may cause an employer to begin disciplinary proceedings? The principal areas when disciplinary proceedings could be initiated could be: 1. If the employee is continually underperforming, showing poor performance, or the management is not satisfied with his work output 2. The employee is guilty of malfeasance, tort, breach of contractual obligations, breach of trust, or is inciting other workmen to resort to strikes or work stoppages. 3. The employee is charged of serious misconduct or breach of confidence. Question 3: What is ACAS Code of Practice on “disciplinary and grievance procedures? What is its legal status? The ACAS Code of Practice sets out certain procedures that are enjoined through the main stages in handling “discipline and grievance” in the workplace. (Draft Code of Practice on discipline and Grievance: Foreword. 2008). For example, the “ACAS is well on its way to become law since “It is now subject to Parliamentary approval, and due to come into effect on 6 April 2009.” (Acas Discipline and Grievance Procedures Code of Practice Update. 2009). Through a six step procedure, the ACAS delineates the formal steps employers need to take in order to conduct disciplinary or conduct procedures and how it impacts employees. The steps could be as follows: 1. Informal Disciplinary action 2. The disciplinary meeting 3. Taking disciplinary action 4. Disciplinary appeals 5. The statutory discipline and dismissal procedures 6. Grievance procedures (Disciplinary and Grievance Procedures. p.18). It is now necessary to consider each step in detail in terms of the rights of employees with regarding to disciplinary proceedings being taken against them. Informal Disciplinary action: At this stage, it is seen that there is an informal chat between the employer and the concerned employee(s) in which the facts and explanation from both sides are considered. It is best if things are sorted out at this stage itself and the matter reaches an amicable settlement at preliminary stage itself. The disciplinary meeting: If there is deadlock at the preliminary stage, the employers would be constrained to conduct a meeting, before which written notice would be served to alleged offending employee, describing the kind of offence and proposed course of action. It would also allow him the right to have a companion and offer explanations. For example, the companion may have the right to ask questions, or seek clarifications on any issue affecting the employee’s rights and privileges. During the meeting, the employers would highlight the aspects; afford the employee to offer his opinion and that of his companion to make queries. In case, no decision is reached at this stage, it would be necessary to postpone the meeting, or if the employee remains recalcitrant or unco-operative it would be necessary to go into the next stage. Taking disciplinary action: Processes become more serious at this stage, and it would become incumbent for the management to take action, either for inadequate performance, or misconduct. Taking the first case of poor performance, it could be said that employer could be left off after an appropriate warning with appropriate time frame for improvement and later re-evaluate. If very serious matter is involved, like fraud, malfeasance, etc., immediate action with notice to the employee is necessary. If it is misconduct, the nature and implications need to be told and the employee needs to be giving every opportunity to justify his stance, with evidences and witnesses, if needed. However, end result of this stage, whether results are achieved or not, would determine the next stage. Disciplinary appeals: It is possible for the employee, within five working days of receiving the disciplinary notice, to go for appeals procedures. During this time new truths on the case may emerge and the employee may be given opportunities to examine and pass his explanations on them. This could also be seen in terms of Statutory discipline and dismissal procedures: The penultimate stage of disciplinary and grievance procedure seeks to first inform employees of the allegations against them, by means of a written notice. During the course of the meeting, the employee is formally charge-sheeted and he is allowed to counter the charges levelled against him, with the advice of colleague or companion, if need be. After all deliberations are over, the final decision is reached, which may be appealed if need be. The source of the appeal decision would be the final verdict. Grievance procedures: It is seen that grievances could be serious or trivial, depending upon the employers/employees attitudes, work culture and demands of work. It could also be seen whether parties are really keen on solving the problem, or exacerbating it. The best solution could come from early informal approach which seeks to offer breakthrough to the deadlock. In case no solution is forthcoming, it would be necessary to have a series of meetings with the aggrieved employee (with companion) and try to reach an acceptable solution. The employees need to provide solutions which may or may not be acceptable to employee. The next option which is available to employee is to seek the help of a tribunal for redressal of his grievances, outside the purview of this study would be the tribunal stage Coming to the next part of this question, it may be said that “ACAS revised Code of Practice on Disciplinary and Grievance procedures has been approved by the Secretary of State for Business, Enterprise and Regulatory Reform. It is now subject to Parliamentary approval, and due to come into effect on 6 April 2009.” (Acas Discipline and Grievance Procedures Code of Practice Update. 2009). Question 4: How should a disciplinary meeting be held and by whom? There are certain norms to be followed while conducting disciplinary meetings. This would entail: 1. Introducing those present to the employee 2. Delineating the role of the accompanier 3. Stating that the intentions of the meeting is to judge whether disciplinary actions could be taken in accordance with structured disciplinary laws and regulations 4. The mode of carrying out the meeting. Conduct of the meeting: 1. Elaborating on the compliant(s) to the employee along with evidence (could be examined by employee) 2. Seeking replies from employee regarding the complaints/ accusations and asking them to provide proof and evidences to corroborate their replies. At this stage, they could also question the evidence citing against them, either themselves or through their companion. At this stage the jury needs to address the employee whether they are accepting the charges levelled against them or not. In case they are not, it would become necessary to seek further into the case, including depositions of material witnesses, which may need subsequent hearings in case they are not readily available. 3. At this stage, it would be necessary to request employee if any special situations need to be considered and if not, a summary decision may be made. It is important that the entire deliberations are conducted in a professional and impartial way, so as not to offend the sentiments of employees. It is also necessary to consider that any fresh evidences also need to be considered, and “it may be necessary to adjourn the meeting to investigate them and reconvene the meeting when this has been done.” (Discipline and Grievances at Work: The Acas Guide. p.19). 4. The final stage is the Summation stage in which the main areas of the case are recalled, arguments and counter- arguments revisited. At this stage, the employee is also asked whether s/he has anything further to state in substantiation of the case. After this stage the proceedings are declared closed. The proceedings are carried out by a panel appointed by the employers, which may include Human resource managers and could also constitute, trade union representatives in case the said employee is a member of an active trade union. Question 5: What range of penalties may be imposed? Normally since a charitable organisation runs on trust and good faith, in most cases a reprimand would be sufficient to reform errant employees. For example, a show cause notice would be enough to discipline him to mend his ways and perform according to norms of organisation. However, in certain cases, considering the level and intensity of misdemeanour, it may be necessary to impose a fine or penalty, which would naturally, commensurate on the degree of offence and its implications. The main aspects that could be considered would be: 1. Costs 2. Expanded costs (3) Adjustments to awards. Defraying costs are not considered an appropriate means of penalties since in many cases claimants are induced for costs when the case does not have scope for costs. In such instances, if the claimants do not robust legal support, they often stand to lose heavily in material terms. Hence it may be said that if a penalty has to be upheld, it needs to be in form of adjustments to awards; this would serve the dual role of punishing the errant parties, while encouraging genuine claims being brought within the ambit of law. Question 6: How could be employee be dismissed at the first breach of discipline? One of the main causes for summary dismissal could be in case of “gross misconduct”. Yet, this type of first breach needs to be substantiated and evidenced before disciplinary action is taken against errant employee. (Disciplinary and Grievance Procedures. 2004). The major kinds of gross misconduct could be seen in terms of , insubordination or disobedience, bringing the company into major disgrace, susceptible to hazards, legal or otherwise, detriment caused by use of illegal drugs, or alcohol or losses, damages or injury caused by breach of trust or confidence. However, in most cases, the termination is carried out only after assessment of facts and after providing ample opportunity to the employee to state and substantiate his case. Only after all proceedings are reversed that the actual dismissal is carried out. Question 7: Explain what is meant by the no difference rule: In the case of unfair dismissal, it could be said that no difference rule states that no discrimination or partiality has been shown to a particular employee, or group of employees. In other words, the decision has been fair and appropriate. It also means that set procedures have been followed, including warning and ‘fair hearing.” (Chapter 8 - Labour Law: Unfair Dismissals: Fair procedures). The procedures to be followed are as follows; 1. Where the concerned workman was a union member, the union has to be informed. 2. The charges have to be made known to him 3. He needs to be given ample time to make arrangements for hearing 4. He should be afforded access to all documents and evidences in proof of charges levelled against him, or allegations made 5. He needs to be provided justifications for the decisions affecting his interests and given opportunities to defend his actions. Coming to how Dan could be assisted in getting help on the drafting and implementation of disciplinary and grievance procedures, it could be said that Dan needs to take recourse to ACAS (Advisory, Conciliation & Arbitration Services ) in order to help effectuate “better employment relations.” (What We Do). The type of information that the new procedures could contain could be seen in terms of the need to assess the optimum use of the present part time and full time employees in best possible ways. This could be attempted by way of: 1. Improve better employee relations through motivation, job appraisals, salary reviews, and other human resource building measures. 2. Act immediately in the event of any dispute, grievance or proposed disciplinary measures in line with existing guidelines issued by the rules and bye laws governing the organisation’s governance, and if necessary seek recourse to any professional or autonomous body undertaking dispute redressals and settlements. 3. It is seen that rules and regulations that provide guidelines for better conduct and performance, instils the right corporate discipline needed in organisation and also capitalising on opportunities, challenging or otherwise. 4. It is also seen that discipline and grievances are about “people not processes”, and therefore the humanistic approach works best while dealing with work force. It has been seen through empirical studies that in most cases, employers “should aim to improve and not to punish.” (Disciple and Grievances at Work: Introduction). 5. The guidelines could concern itself with appropriate areas of handling grievances in the best terms of both the employers and employee and also how disciplinary actins need no longer be an exercise that is actively detested by managers. It could also consider the statutory norms and regulations consistent with grievances handling and dispute settlements. Again, areas of conflict of interests could be resolved amicably through dialogue and open minds and not through friction. Coming to whether the employees need to be made known about the new practices, it could be seen that it would depend upon the discretion of the employer whether it needs to be notified or not. In most probability, the advantages would be in informing the employees accordingly, in order to avoid any future misunderstandings on such sensitive information that affects employees’ future careers and income graphs. The incorporation of minimum statutory procedures would depend upon the type of organisation that Dan runs. If it is charitable institution or trust, registered and run as a company limited by guarantee, it is mandatory that such legal mandates are enforced and executed. However, in smaller concerns, it is seen that the management may not be able to enforce all clauses and therefore, it could be applied in a limited and circumscribed manner. The important aspect of incorporation statutory procedures would lie in its continued use and sustenance over a long period of time, in order to avoid legal bindings and steer clear of governmental interferences. Conclusion: It is positively believed that the growth of this charitable unit has largely been the efforts of Dan and her committed band of staff and workers. Together they have been able to create a strong and viable unit that could cater to the rehabilitation needs of the criminal community of ex-convicts of felons, and help them to lead normal lives in the mainstream society without any form of bias or discrimination. It is necessary that Dan also considers the impact that her social life has on the community as a whole and what other new development areas could be explored toward amelioration of the present plight of the marginalised sections of society. Bibliography Acas Discipline and Grievance Procedures Code of Practice Update. (2009). [online]. CTN: The Trusty Network Bringing rustees Together. Last accessed 26 January 2009 at: http://www.trusteenet.org.uk/news/acas-discipline-and-grievance-procedures-code-practice-update Chapter 8 - Labour Law: Unfair Dismissals: Fair procedures. [online]. Last accessed 26 January 2009 at: http://www.paralegaladvice.org.za/docs/chap08/15.html Code of Practice: Discipline and Grievances Procedures. 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