Conservative Weekly Draw Banner Image

< Back to Magazine Articles

Club Law and Management

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

Questions and Answers

Q. We currently have gaming machines (£250 jackpot) which are not widely used and require us to pay regular tax on and have to have a permit. Are there any cheaper options available?

A. The Club can have up to three category D gaming machines. These are up to 10p per play and have a £5 jackpot and many club members prefer them. These Types of gaming machines do not attract the Amusement Machine Licence Duty that you would have been paying before on your Category B4 machines (£250
jackpot machines).

You still, however, need a Club Gaming Machine Permit to operate them although, as you mentioned that you previously had Gaming Machines your previous permit will still be valid.

If you do not have a current valid permit then you need to fill out an application return it to your local Licensing Authority, as well as sending a copy to Gambling Commission. These permits cost £200.

Q. Is there any requirement within the Association rules to offer a job through a public advertisement rather than offer the position directly to a member of the Club who would be ideal for the job?

A. I confirm there is absolutely no requirement for the Club to publicly advertise any job vacancy. The Club is not a public employer and is not publicly funded. If the Club has found an ideal candidate within the membership then why not offer the candidate a three month trial? The candidate must, of course, be prepared to give up membership of the Club.

Q. I have a long-running dispute within the club that the caterer, who has a concession or franchise with the Club, is also an elected committee member. Some members of both the Club and the Committee itself feel that it is a conflict of interest and the caterer herself freely admits that she offered herself for election solely to protect ehr interest in the concession. Can you advise?

A. The situation raised is not as uncommon as you may think. If the Club's catering franchisee is a member then she is entitled to stand for election to the Committee. As a member she could not. under the rules, be denied this right. In future, the Club may wish to adopt a policy whereby Club franchisees cannot either become or remain Club members. However, such a policy cannot be made retrospectively.

The situation, therefore, will continue until the franchisee is voted out of office or stands down. In the meantime, as a result of vested interest, she should not be permitted to contribute to discussions pertaining to any catering matter or, indeed, to vote on any such subject. I also think her vested interest should be extended to include matters relating to Club staff with whom she works alongside.


Q. In order to save money the Club is looking at terminating our existing contract for cleaning services for the Club and is instead going to hire a husband and wife team to clean the club instead. Is there anything to stop us doing this?

A. A common question which is contains an interesting and uncommon answer. Whereas it might represent itself as a straightforward change of contract, the Transfer of Undertakings Act has some quirks. Firstly, any transfer of undertaking which in situations such as this is classed as either moving the work in house or transferring it to another contractor must be accompanied by the transfer of the existing staff currently doing the work. This has caused problems for Clubs in the past since the majority of the time they are changing contracts in order to minimise costs. The revelation that they will have to take additional staff on and then either keep them or make them redundant is a serious blow for many Clubs. That is, however, what the Act states must happen when an undertaking is transferred – the existing employees are transferred to the new employer and must be treated as if there had been continuous employment. There is one positive to the Transfer of Undertakings Act in that if you currently have a contract with a cleaning firm and you would like to keep the cleaners but not pay the overhead to the firm then you can bring the work in house, the Act says the company must release the cleaning staff to continue the cleaning, if they choose to, and the company cannot apply any financial penalties for this. This can be a useful way of keeping good cleaners whilst getting away from an expensive cleaning contract.

Q. We have recently been
approached by an organisation called PRS who have said that in order to have a television available to Club Members that we would have to pay them a yearly fee? They also say the same would apply if we had a radio on where it could be heard by Members. Surely this can’t be right can it?

A. I share your dismay and irritation at these charges, specifically as they are not widely advertised until you have fallen foul of them.

However the licences for music in clubs are a legal requirement.

The relevant law is the Copyright, Design and Patent Act, 1988, in particular the Section that deals with copyrighted music and its performance in public and in broadcasts.

There is very little case law to determine whether playing music or broadcast television inside a business or members’ club should really fall under the definition of the music being played in public.

This issue is often raised by businesses faced with this problem but there may be clarification later this year when a complaint by PRS against Kwik Fit reaches High Court.

For the moment I can only recommend that you take out the required licence.

Details can be found on the PRS website (www.mcps-prs-alliance.
) and there are various different bands of licensing that apply.

It is worth noting that if a club has more than one tv set the licence fee jumps up a band.

It should aslso be pointed out that if a club plays recordings of
music it requires a licence from PPL (Phonographic Performance
Ltd). Details of these licences can be found on the PPL website

The subject of PRS and PPL licences is dealt with in full in the
ACC’s book on “Club Law and Management”.

Clubs should be aware that there are inspectors who check on premises and penalties for infringement can be severe.


Q. Can you tell me if someone is off sick are they allowed to carry their holiday forward. We have always said they can’t but our Steward disagrees?

A. The Committee has no legal obligation to allow employees to carry over holiday to the new statutory year although obviously I would encourage the Committee to use their discretion in this matter.

There was recently an EU case (Stringer v H M Revenue & Customs) which declared that any employee who has accrued holiday time but has been unable to take it due to sickness shall be
allowed to take it during the first period back at work.

It is  important to note that at the moment this only has an effect on the public sector. The case will now be referred back to the House of Lords and if they agree (which they almost certainly will) then it is at that point that the changes will come into effect for the private sector. This hearing is unlikely to take place until early 2010. Until then, an employee has no right to keep unused holiday over the holiday year even if they have been prevented, because of sickness, from taking it. The ACC will present an update to this issue when the case has been heard by the House of Lords.


Q. Does the new Licensing Act insist that every non member, other than visiting teams, should be signed in by a member and is there so much emphasis put on this? I note from your guidance notes that a non member could be welcomed into the Club up to 4 times per month, although our Rules say only twice. Are we therefore in breach of our own Rules and not the law by allowing an individual to use the Club more than twice? Which is the greater offence? If we were to be visited by the Police one evening and a non member was found to be drinking in the Club who had not been signed in, how serious an offence is this now considered? Licence threatening or a slap on the wrist!?

A. The Licensing Act 2003 does not insist that a guest be signed in by a member. However it is expected that during an inspection all the guests would be accounted for by the members present at the time. Clubs have recently been fined heavily for not having sufficient control over the persons purchasing and consuming alcohol on the premises. The law therefore allows the Club far greater flexibility on guests and their attendance than your own Club Rules.

You are not in breach of any rules by limiting the number of times a guest may visit the Club to twice per month. The Club is well within its rights to limit the number of times the same guest may visit the Club to twice per month.

If you are currently allowing guests into the Club more than twice a month you are not in breach of the Licensing Act 2003 but you are in breach of your rules. The Club should either enforce its current rules or modify them to give the Club more flexibility on these matters.

If the Police visited the Club one evening and found a non member who was not a guest of a member then you could be looking at a hefty fine and, if repeated, it would threaten your Club Premises Certificate. If however the nonmember was clearly a guest of a member then you would not be in breach of the law. A properly kept signing-in book provides evidence of correct procedure as required by the Club Rules.

It has never been a legal requirement for guests to be ‘signed in’, in that there has never been a specific section of the Act which requires that. However the fact is that both Police Licensing Officers and Licensing Authority Officials have always asked for this procedure to be carried out. Often when visiting a club they will request to see the Members Guest Book as evidence that the Club is being properly and professionally managed. A Club is expected to be able to show who is in the club and in what capacity they are there. The Members Guest Book is proof of this. It is in the rules of nearly every Club, including your own, that guests be signed into the Members Guest Book. The ACC therefore recommends that whatever your Club Rules state about frequency of guests, that you properly record their attendance on every occasion.

Q. My Club, so presumably
all others, has received a booklet from BERR concerning the new Employment Act 2008. Does the implementation of the new Act have any material effect the disciplinary procedures embodied in the ACC standard Rules or Employment Contracts?

A. The Act has only just come into force so there are still
questions to be answered with regards to its full implications. We do not believe the changes will have any material bearing on ACC contracts as they have more effect on the procedural side of
employment law. These are the key changes.

• A procedural breach on the part of an employer will not automatically render a dismissal unfair. In cases where failure to follow the correct procedure renders a dismissal automatically
unfair, tribunals will have the power to diminish or even eliminate the sum of compensation paid if the dismissal would have gone ahead anyway even if the procedure had been correctly followed.

• Employees will be able to bring a claim to an employment
tribunal without first raising a grievance with their employer.

• The power of tribunals to raise or lower awards by up to 50% and to extend the time limits for bringing claims will be removed. This will be replaced by the power to increase or reduce awards by 25% where the relevant Code of Practice has not been followed.

Generally, the new changes are not unduly harsh on either employers or employees and have little practical effect for either.
In recognising the complexity of employment law the new Act
gives some additional leeway for claims brought only because
of a procedural breach and a tribunal’s leeway in awarding
awards has been diminished by 25%. Employees can now bring claims without first raising a grievance with their employers but I do not feel that such claims would ultimately be successful if the employer has been given no opportunity to resolve the situation
before litigation. However we shall have to wait and see to see
what actual effect these changes have.


Q. It seems quite some time now since the ACC advised all clubs to make a claim for a refund for over payment on VAT for gaming machine net takings for a period up to December 2005. I understand that all claims were submitted on the basis of being “stood over” until the test case being taken by the Rank Group was ruled upon. Have there been any further developments?

A. Thank you for your enquiry regarding the “Linneweber Case”, I can confirm that at the moment there is no action that can be taken by clubs who submitted repayment claims based on the fiscal neutrality arguments.

The latest information I have is that in an interim decision dated 19th August 2008 the VAT tribunal found that there had been
a prima facie breach of fiscal neutrality in the VAT treatment of
Rank’s gaming machine takings; they should have been treated as
being exempt from VAT before 6th December 2005, when UK law was changed to make all gaming machine takings taxable.

HM Revenue and Customs appealed against this decision and the High Court are currently hearing the Appeal.

Until such time as this Appeal has been concluded no claims for
alleged overpayments of VAT by clubs will be considered by HM
Revenue and Customs