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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.

The year as a whole has been categorised by the gloomy economic outlook the country has been experiencing and the effect that this has had on Clubs. Looking back to the December 2008 Magazine, it was clear that 2009 was expected to be a tough year, a prediction which has proved very true.

Legislation continues to hinder Clubs, as well as alcohol duty increases which have stripped away any benefit the temporary VAT cut may have provided; the smoking ban is still raised as a concem. Whilst the smoking ban is one which is not likely to be addressed in the near future by Parliament, the sale by supermarkets of large quantities of sometimes ridiculously low priced alcohol is a matter which may be addressed by legislation. Sadly Local Authorities and some Licensing Officers continue to make mistakes when it comes to the interpretation of the Licensing Act 2003, most notably when it comes to Temporary Event Notices and the admission of Members’ guests.

The Magazine this year has been dominated by the ever-popular Question and Answer section which continues to attract positive reaction from Club Oflicers who often refer to it as invaluable. This format will be continued regularly throughout 2010 as a useful method of discussing the everyday issues and problems which affect Clubs.

Employment Law update

This year has seen several updates and changes to existing employment legislation. From Brussels we have had the declaration that employees continue to accrue holiday whilst on sickness leave, and that if an employee is taken ill
whilst on holiday then this should be treated as sickness time rather than holiday. After a prolonged period of absence due to illness then an employee should be given appropriate time to use up any accrued holiday pay which has not been taken.

Minimum wage levels and the holiday allowance have both increased, from £5.73 to £5.80 and 24 days to 28 days respectively. This effectively has increased the costs for employees across the board which is particularly challenging for small businesses. There have been large unemployment increases throughout the year.

Some good news was that from the 6th April 2009, the statutory disciplinary policy was eliminated. This means an employee who is dismissed by their employer who fails to follow the former statutory disciplinary policy no longer has an automatic claim to unfair dismissal. Instead such claims are now determined on a reasonableness test - in other words, were the actions taken by the employer reasonable.

The ACC continue to advice that Club Committees follow the official ACAS guidance on this subject. Clubs using the ACC Model contracts for Club employees are advised that these documents remain up to date and the disciplinary method is still valid and should be followed.

Looking ahead, next year the major initiative will be a focus on “Fit to Work Notes". Instead of sick notes, GPs will be encouraged to state what the employee is capable of doing. This should be helpful to Clubs that have problems with employees who are off on long term sick. GPs will be required to clearly state what an employee is capable of doing.

Unfair Contracts

The ACC has dealt with complaints against companies including Globewatch and One Stop, that specialise in long term lease or other contracts. The ACC advice on this subject bears repeating. Whilst the offers by these companies may look attractive, being able to lease equipment rather than buying outright, the total cost of these contracts is often massively more than the actually cost of the equipment and frequently Clubs with faulty equipment have found it difficult to know who is responsible for the maintenance.

Add to this the the poor service and restrictive contractual arrangements that place all the power in the hands of the owners of the equipment, and that often the Club will not even own the equipment at the end of the contract. Clubs should approach any such deal with extreme caution, and contact the ACC to review any transactions of high value or long term commitments.

We have also dealt with issues involving Gems Hygiene, and advertising firms which Clubs claim have missed them into signing a contract or have presented contracts to which Clubs have no prior knowledge of. It is important to make sure that contracts are carefully read before signing and that the small print is understood, if a company contracts are carefully read before signing and that the small print is understood, if a company contracts you out of the blue or attempts to create a contract is sent to the Club in writing so that it may be properly reviewed.

A complaint regarding a contract issued by Peninsula Business Services Ltd was also dealt with by the ACC and details of this were published in the May addition of the Magazine. I think it is worthwhile for Club Committees to spend a little time rereading this particular article.

Any contract that does not appear legitimate should be challenged, and the original contract requested. The ACC is able to review questionable contracts and provide support to Clubs experiencing problems.

Club Events and Temporary Event Notices (TENs)

We have has dicussions with Stockport Metropolitan Borough Council, Barrow Borough Council and Falkrik Council over the limitations that they have tried to place on Temporary Event Notices and Club Events including Members' Private Functions. The ACC have safeguarded Clubs' rights to hold events for members and their guests without obtaining a TEN and to be allowed to apply for the full entitlement of TENs available each year.

Stockport Council attempted to argue that Clubs could not apply for all 12 TENs itself and that a Club or anyone acting on behalf of the Club was limited to a maximum 5 TENs per year. We presented our case and after our arguments had been reviewed by Stockport's legal department it was accepted that Clubs would be able to apply for all 12 TENs that they are entitles to under the Licensing Act 2003. This is an important concession to make sure that Local Authorities continue to respect the right of Clubs to apply for TENs.

Falkirk Council were imposing limits to the number of guests that could be signed in at one time, effectively stopping members from holding events within the Club premises. We have been communicating with the Council over this policy and hope to have some news to report in the New Year. This particular case will, of course, only affect those ACC Clubs in Scotland.

Linneweber/Rank VAT Case

This case revolves around whether HM Revenue and Customs should have to repay VAT that it levied on gaming machines for a period up to 6th December 2005. The Rank group which has taken the test case has successfully argued that it was not fair that VAT was charged on gaming machines during the period.

This case is ongoing and is very important to many Clubs that have large amounts of money riding on the outcome of it. The first decision was won by Rank, although as expected HMRC have appealed that decision and a new hearing will be heard in 2010. It is interesting to note that the Government has actually allocated money for this and other cases which indicates that HMRC are preparing for a possible defeat.

We will continue to publish updates in the Magazine although no date has been set for the appeal as of the time of printing.

The deadline for submitting a claim ended in March 2009, Any Club that did not make a claim may not now do so.

The Recession

Possibly the most relevant and ongoing issue this year has been the effects of the recession on Clubs. Whilst for many 2008 felt like a recession, the recession officially hit us in 2009, and has been the longest recession since records began and also one of the hardest for small business such as Clubs to endure.

With consumers reining in spending, the smoking ban still affecting trade and the evergreen problem of supermarkets significantly undercutting Club prices, this year has made trading difficult for all elements of the leisure industry. Added to this, the increase in beer duty, the additional costs of employment and the uncertainty faced by the general public, 2009 will be remembered as one of the most difficult trading years for Clubs for generations.

The ACC can attest to this by the increase in financial assistance sought from us, and the many Clubs who have been forced to make redundancies. There are no easy answers and no simple solutions, but the Clubs that have managed, if perhaps not thrived, are those that have abided by the principles of Conservatism. Cut down on waste; reduce costs and run an efficient and productive place of business. These are the simple answers but also the most relevant. In addition, as we have advised in many editions of the Magazine, Clubs must continue to actively recruit new Members and, importantly, encourage existing Members to become active recruiters of new Members. It is not possible to place the onus of responsibility for this vital part of Club life solely on a Club Committee.

Trading conditions will remain difficult for the foreseeable future and Clubs must learn to be lean to survive. We hope the ACC Recession Special which was published with the July Magazine was of assistance to Club Officers continue to publish tips and advice in the Conservative Clubs Magazine next year.

Clubs fined for having Foreign Satellite TV systems

Regular readers will know that the ACC advises all our Clubs not to enter into arrangements with foreign broadcasters that offer live sports packages, whatever they claim about the legality of their services. The Media Protection Service continues to investigate and prosecute incidents where Foreign Satellite systems are used. A Conservative Club was, on the 28th October, fined £4,373.50 by Thameside Magistrates for using one of these systems; with the President of the Club being personally fined £515. In addition, on the llth September, Brookvale Park Club (not ACC) was lined £810 by Birmingham Magistrates, and the Club official only avoided a fine by after agreeing for both himself and the Club to plead guilty.

Both Clubs had previously received wamings for the illegal transmission of live football games from providers other than Sky. Mr.Ray Hoskin, director of the Media Protection Services, indicated that these actions were part of a wider crackdown being launched on Clubs using these systems and said that the Clubs and Officials ‘were committing a criminal offence and [in these cases had rightfully] pleaded guilty to it.

No date has been set for the appeal of Portsmouth licensee Karen Murphy against her conviction for screening foreign satellite football. Until this is heard the ACC recommends, as it has repeatedly done so, that Clubs do not use foreign satellite systems. Clubs that do are in breach of the law and liable to lines and personal convictions if prosecuted and found guilty. Until this case is heard at the European Court of Justice this remains the current situation under UK law.