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Club Law and Management

by Philip Smith, Secretary of the A.C.C.

Update of the Year's Events

The Update of the Year’s Events is a regular feature in the December edition of the Magazine. This provides us an opportunity to revisit legislation changes and subjects on the running of Private Members’ Clubs.

In last month's article; Clubs versus Economy I wrote about the large number of Clubs that are struggling in the new economic climate. In the New Year troubled finances will remain the predominate issue that many Clubs will continue to face.

Trends in legislation and their practical application by local Licensing Authorities, Councils and the Police appear to ignore the manifold benefits to the Community which Clubs give and put Clubs in the same bracket with other Licensed establishments such as Pubs.

Next year I shall be including regular Question & Answer articles in the Magazine since this continues to be the most popular format among Club Officials.

1. Steward's Accommodation: Taxable Benefits

Whilst a number of clubs operate with residential stewards there is no doubt that the trend in recent years has been to recruit stewards locally on a non residential basis and to hire out the unoccupied flat or, in some cases, house in order to provide valuable rental income.

However, a large proportion of our Clubs still employ stewards who occupy residential accommodation which is provided as part of the employment package. Over the years it had been made clear, in articles such as this, that it is essential, when dealing with employees who benefit from free accommodation, that any form of tenancy is avoided.

Consequently, no money should be either received, or deducted, from such employees that could in any view, be regarded as rent, Club Committees must, therefore, ensure that all employees who benefit from living accommodation do so as "service occupiers". An employee who occupies the Club's property for the better performance of his, or her, duties, who is contractually required to do so, and pays no rent, is a "service occupier" and has no security of tenure. Such occupation ceases on termination is, subsequently, deemed to be unfair. For further details on this important subject please refer to the January edition of the Magazine.

2. The Role of Chairman

No club can be successful unless it has a body of enthusiastic and dedicated members, for the membership is the heart of a club. However, as in all business, success needs a good head as well as a good heart. At the head of a club, the Chairman often holds the key to success. The importance of a hard working Chairman, together with the Secretary, is paramount. If such a Club also has the support of a hard-working and harmonious committee, the club will be doubly blessed. A full article on this subject was published in the March edition together with a Code of Standing Orders for Committees.

3. New Discimination Law

The Government has published proposals for a Discrimination Law Review which would, for the first time, consolidate under one Act, the various existing pieces of legislation concerning discrimination. The Government has concluded a public consultation of this Law Review and a "Single Equality Act" will be laid before Parliament. Most observers of Parliamentary Procedure consider that this new legislation will now not be introduced by the year end timetable but will be introduced next year.

This proposed Act will affect those Clubs which continue to elect women to non-voting Membership in the case of a Club which is primarily for men, or men to non-voting Membership in a Club which is primarily for women.

Those Clubs which operate a single sex Membership Policy without admitting Members of the opposite sex to any form of Membership will not be affected by this proposed new legislation. Those Clubs which continue to admit women to non-voting "Associate Membership" will be unable to do so following the introduction of this Act.

There is a nothing to prevent a Club from agreeing special reduced rates of subscription for say, widows of members, ladies over sixty  or sixty-five years of age, or couples. Alternatively, full subscriptions could be phased-in over a period of two or three years, thereby reducing what can, in some cases, be a dramatic increase in subsciption. In short, equal voting rights do not necessarily mean that everyone must pay the same subscription. Clubs wishing to amend their Rules in order to create an equality of membership are advised to contact the ACC.

4.Honoraria

An honoraium is not a salary; it is by definition a 'voluntary fee for a voluntary service.' HMRC defines honoraia as payment made to office-holders for doing  something they are not rewarded for in any other way. Either the members in general meeting or the committee may grant such persons an honorarium in recognition of those services, provided the rules permit.

Many clubs assume that, due to the fact that honoraria are often of insignificant amounts, they are tax-free. This is not the case. Payments of honoraria, whatever the amount, are subject to Income Tax and National Insurance and
must be included and dealt with in accordance with the rules of PAYE in the same way as the payment of wages or salaries to club employees. Straightforward payment or reimbursement of out-of-pocket expenses will not attract
Income Tax.

If your club is paying honoraria for the first time, or if payments made in the past five have not been taxed under PAYE, then your Tax Office will advise you what to do. The correct Tax Office is the one dealing with the club, not the Tax Office of the person in receipt of the honorarium.

5. Equipment Leasing

I strongly advise clubs not to enter into leasing arrangements for such equipment and to read the September edition of the Magazine again. lt seems this advice cannot be repeated often enough. There are many companies in existence who are in the business of providing equipment, ranging from door entry systems and tills to CCTV cameras, screens and projectors and even major air conditioning work to clubs on lease arrangements.

The information supplied by these companies often looks at tractive and the sales personnel employed are mostly smart and personable. However, the fact is that most offers, whilst at a  glance might appear good value, ultimately involve complex leasing contracts which run for many years and sometimes incorporate automatic renewable terms in the event of cancellation notices not being provided by clubs within a specified time slot.

Leasing works on a hire purchase system and equipment will never ultimately belong to the club, in one case a club calculated that £648,000 had been spent over ten years on a door entry system. ln almost every instance, companies selling the equipment use a separate finance company which is always quick to threaten legal action in an aggressive manner, introducing additional financial penalties which add further financial costs and often anxiety to club officers.

6. The Bolton Statement of Intent - Licensing

Clubs in Bolton were asked to sign a Statement of lntent issued by the Bolton Police Licensing Unit. This document has been issued to all Clubs and Pubs in the Bolton District.

We are concerned that Private Members’ Clubs operating under CPCs have been asked to sign a Statement, which implies a form of contract, that places additional burden of unnecessary requirements on Clubs such as regular collection of glasses and bottles, staff training for vigilance of suspicious behaviour and drunkenness, for all door staff to be registered with the Security Industry Authority (SIA), to adopt Challenge 21, which requires any person who appears to be under 21 years of age, and the list goes on.

Clubs are required to manage their affairs in accordance with their rules and are already subject to the terms of their CPCs. If a Club was presented with a statement which was specific to a Private Members' Club and did not contain any implied threat, then I have no doubt that it would be agreed. Ultimately, however the only obligation on Club Committees is to comply with the Licensing Act and the conditions of their Clubs CPC.

If you club recieves a "Statement of Intent" from your local Licensing Authority or Police, I would advise that it is referred to this Association before being signed. Please refer to the August edition of the Magazine for the full article.