Posted: 07/11/2024
Following the decision of the Employment Appeal Tribunal (EAT) in the case of MacLennan v British Psychological Society (Protect and anor intervening), nearly a million charity trustees may now have protection against being subjected to a detriment if they blow the whistle on alleged wrongdoing in the charities they serve. This is because the EAT, in a potentially landmark decision, confirmed that section 230(3)(b) of the Employment Rights Act (ERA) could be read purposively, so that a trustee might now also be able to claim they are a ‘worker’ and are therefore covered by whistleblowing protections.
Prior to this ruling many charities argued that there was no such protection, usually because there was no ‘contract’; however, in this case, involving Dr MacLennan, who was a trustee and elected as president-elect of the British Psychological Society (BPS), the absence of a contract was no longer determinative.
The BPS is a charity focusing on the development, promotion and application of psychology for the public good. It is governed by a royal charter, statutes, and rules, as well as the laws regulating charities.
Dr MacLennan was unhappy with the way BPS was run and made a number of complaints concerning the governance of the BPS, which he contended were protected disclosures (ie whistleblowing). Relations between Dr MacLennan and the management team of the BPS became strained, culminating in BPS terminating Dr MacLennan’s role as trustee and president-elect. He contended that he was, or should be treated as, a worker, so as to be protected against being subject to detriment done on the grounds of making these complaints, which he characterised as protected disclosures.
Dr MacLennan’s initial Employment Tribunal claim was dismissed on the basis he was not a worker under S230(3)(b) ERA. In the tribunal’s view, Dr MacLennan was not in an ‘analogous situation’ to a worker and his treatment was not on the grounds of some ‘other status’ because he was acting in a purely voluntary capacity and was not paid. They therefore dismissed his claim. Dr MacLennan appealed.
While on the facts of this case the EAT upheld the tribunal’s decision that Dr MacLennan did not have a contract and therefore was not a worker, it clarified that in deciding whether a trustee has a contract, the fundamental question is: did the parties intend to enter into a contractual relationship? This involved consideration of:
On this case the fact Dr MacLennan was not paid was possibly a significant factor which meant there was no intention to enter into contractual relations, as was the limited nature of Dr MacLennan’s duties. However, the EAT did make it clear that there was a strong argument that being a charity trustee is akin to an occupational status, given the nature of the role, responsibilities, and regulatory regime, and sent the case back to the tribunal to consider again.
We have therefore not heard the last of the question of whether trustees are also workers entitled to protection from whistleblowing detriments. The judge held that the protection for freedom of expression in the European Convention on Human Rights may not be compatible with Dr MacLennan being left without protection. It is common for trustees to be, or become aware of wrongdoing, and if there is a gap in the law this leaves trustees vulnerable to retaliation. Many trustees have limited options for how to make disclosures in respect of potential wrongdoing, and protection as a whistleblower might fill this gap. If this gap is not filled, there will remain a tension where trustees are obliged, in accordance with their statutory duties as trustees, to speak out about wrongdoing, but are then not protected when they do so.
From a charity law perspective, this case is useful in that the Charity Commission has pointed to the currently narrow grounds on which payments to charity trustees (to act in their capacity as trustees) may be justified. The Charity Commission was given permission to intervene because this case is considered of more general public importance. In its intervention, it explained the general position on remuneration for services provided by trustees. Under Section 185 of the Charities Act, remuneration provided for services in the capacity of a trustee is only permissible where the governing documentation of the charity expressly permits it, or where the Charity Commission authorises it. The Charity Commission will only authorise such a payment in accordance with its published guidance (‘Trustee expenses and payments C11’) which deals separately with 'payments to trustees' (section 6) and 'compensation for loss of earnings' (section 8).
The Charity Commission believes that any payment for trusteeship is likely to be exceptional and usually only where there is an unusually high burden attached to the particular role, and the charity has tried and failed to recruit trustees. In relation to compensation for loss of earnings, the guidance states that payment must be ‘clearly in the interests of a charity and provide a significant and clear advantage over all other options’. Considerations that may be taken into account include where an individual would not be able to afford to serve without payment of some kind and/or where they bring particular skills which are valuable to the charity.
However, any payment should be compensatory in nature, and the lesser of the reasonable value of the work done for the charity, and the actual loss to the trustee. The EAT made it clear in this case that the detailed points made by the Charity Commission would be a matter for the tribunal when it was considered again.
It appears from this case that the need to balance the public interest in protecting whistleblowers with unusual working relationships, and encouraging those who have the knowledge of wrongdoing to blow the whistle, may be heading into a conflict with the public policy of trustees acting voluntarily and without pay. If a charity makes a payment to a trustee for work done, it will help regularise the employment relationship, and should make it clearer that the worker should be protected from detriments, especially where they do blow the whistle.
However, that same payment risks changing the legal status of the trustee’s relationship with their charity. Given the importance of this debate, the government may wish to intervene, and try to fix this unsatisfactory and potentially anomalous situation, but for the moment we will have to watch this space.
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