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Club Law and Management

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

Questions and Answers

Q. We are in the process of updating the Club's Rules but note that the ACC Model Rules prohibit employees from also being Members. Several of our employees are already Members. What should we do?

A. You may omit the Rule if you so desire recommend that employees are not also members of a Club. Membership of a Club gives them the right to stand for Committee and if elected they effectively become their own employer. An obvious conflict of interest then arises. You may wish to consider adopting the Model Rule but only applying it to new employees. This might be the fiarest and most sensible solution.


Q. We have a Committee Member who has lost the confidence of the other Members of the Committee. Can we call a vote of no confidence in him and ask him to resign?

A. The Committee may call a vote of no confidence in another Committee Memeber or Officer. However, if the vote is successful then this does not force removel or resignation although it my be that the Officer or Committee Member may wish to resign. Each Committee Member and Officer is elected by the Members of the Club and can only be removed by the members at a Special General Meeting called for this purpose. The old adage, those who elect-reject, applies.

Whilst the Committee can make its feelings known to the Chairman, the Committee has no power to force him to step down. It is quite proper for any Officer or Committee person to remain in their post until the end of their tenure or until a SGM meeting has been called and they have been removed from their position by the members.


Q. We have surplus funds that we would like to invest to provide a return for the Club but have been advised that this is not permitted. Can you provide any advice on what we can do?

A. There is no reason why a Conservative Club cannot invest surplus funds in a way that will be beneficial for the objects of the Club. I cannot understand why you were given an alternative view.

There is no requirement under the Rules to suggest that surplus money could not be invested in an interest bearing account.

There are some types of investments which are not open to the Club. For example Premium Bonds and ISAs, however there is certainly no restrictions on placing the money in a high interest account or a guarnteed investment bond which may be offered by a High Steet Bank. Naturally the Club would not wish to risk money and most Clubs do not have share portfolios.

Q. We have just had a Committee Member resign; do we have to hold an election to fill his position?

A. You can treat this vacancy as a Casual Vacancy.

This allows the Committee to appoint a person to this position for the original duration of the vacancy. There is no reason you must hold an election to fill this postition.


Q. If we ask the ACC to act as Trustees for the Club, is there any cost associated with this service?

A. There is no cost accociated with having the ACC act as Trustees for your Club. This is an entirely free service we offer to all ACC member Clubs.

We act as Trustees for many Conservative Clubs as this removes the need to elect to have individual members take on the responsibility for holding Club assets in their own name. Please contact us if you require more information on our Trustee service.


Q. We wish to appoint a Steward who would occupy the Club's accomodation. However the ACC's contract of employment refers to a Spouse and the new Steward would wish to occupy the accommodation with his current girlfriend. What is the legal position regarding this?

A. Under an ACC's Steward's contract of employment, accommodation can aslo be provided to a Steward's Spouse. The Committee may make this final determintation, but it would be reasonable to refuse the Steward to live with anyone who is not his spouse. It creates legal problems if the flat is damaged or the Committee wishes the person to be removed. If you choose to allow a non-spouse to reside in the accommodation then you must make sure that the Steward's contract specifically refers to this person and that her accommodation is only granted on the basis on the Steward continued employment and on a Service Contract basis.


Q. Can we recruit an employee on a three month trial basis before awarding them a contract of employment?

A. For a new employee, a three month trial period without issuing a contract would be prefectly acceptable. At the end of this period if it is not working out for any reason then you may dismiss the employee. Even once a contract is issued, within the first year of employment any employee can be dismissed on capability grounds.

Q. We are registered as an Industrial and Provident Society. With your help we modified our Rules so that we no longer need to have an complete Audit, instead we may just submit an Accountant's Report. However, the FSA have said that whilst we may simply submit an Accountant's Report, it must be completed by a registered Auditor. Is this the case?

A. This advice is correct. If the Club has a turnover of over £90,000 per year then, as long as your Rules allow it, you may submit an Accountant's Report instead of a complete Audit. This report must still be completed by a registered Auditor though. Please make sure that the Club's Accountant is a registered Auditor before asking him to complete the work. In the unlikely event that the Club's turnover is less than £90,000 for the year then you may simply submit unaudited accounts to the FSA.


Q. The Committee is considering charging Members' Guests a small amount for entry to the Club. Can we do this?

A. There is nothing wrong with charging members guests for entry to the Club but the payment should, strictly speaking, be made by the Club Member. Often this would be in the range of a couple of pounds.

Please note that VAT is payable on income received from entrance fees. If, however, you were to record these as voluntary dontations then it may be that VAT could be avoided.