News

Many charities may be in breach of new equality law1

Governance | Tania Mason | 21 Apr 2010

A large number of charities who provide services to a limited subsection of the public may find themselves in breach of anti-discrimination legislation once the Equality Act becomes law in October, a group of charity lawyers has warned.

The lawyers, who are members of the Charity Law Association working party, gave the warning in their response to the Equality and Human Rights Commission consultation on the Equality Act 2010 statutory guidance.

They said that once the Act becomes law, charities will need to identify and provide evidence of “a disadvantage or a legitimate aim that the restriction on their beneficiary class addresses, or risk challenge under the Act”.

They said the Charity Commission must urgently create guidance to help charities apply the exemptions in the new Act that allow them to provide benefits to certain members of the public and not others. Otherwise, the regulator could be flooded with enquiries and potentially unnecessary applications to amend charities’ objects.

“Even worse, many charities may not realise they are potentially breaching the law until a claim is brought, leading to significant costs and potentially damage to the reputation of the charity and the sector,” the lawyers wrote.

Charitable instrument exemption

The new Equality Act consolidates and replaces a number of previous anti-discrimination laws such as the Race Relations act, the Sex Discrimination Act and the Disability Discrimination Act.

Previously, charities relied on “charitable instrument exemptions” within these Acts to allow them to positively discriminate in order to fulfil their charitable objects or the terms of a restricted donation.  These exemptions allowed them to provide services to people of certain specified characteristics, such as education to children of a particular ethnicity or health services to people of a particular sexual orientation, without breaching anti-discrimination law.

However, a ruling by Mr Justice Briggs in the recent High Court Catholic Care (Diocese of Leeds) case suggests that the charitable exemption can only apply if it meets an additional restriction contained in European human rights legislation. Effectively, charities relying on the exemption must be able to prove that the benefits they provide to their beneficiaries must either be “a proportionate means of achieving a legitimate aim”, or “for the purpose of preventing or compensating for a disadvantage linked to the protected characteristic”.

Not tested in UK courts

The lawyers said that this point has not previously been tested in UK courts or brought to the attention of English charities. Therefore, both those charities that have been careful to ensure their activities meet the exemptions under the old laws, as well as those that have not necessarily considered the impact of non-discrimination legislation in the past, could find that their objects are unacceptable once the Act comes into force.  “These charities will need clear guidance to make them aware of the Act and its potential impact on their objects,” the lawyers said.

The types of charities that could be affected include religious groups, organisations for immigrants, charities that work with older people, and groups that promote sports to particular nationalities.

The lawyers also said that the Act would affect grantmaking charities, “which will need to be confident that projects or charities that they propose to fund do not discriminate”.

The lawyers said it was becoming clear to them, as practitioners, that charities are concerned about the potential effect the Act may have on their operations. “Others have simply not considered the issue as relevant and may be proceeding in the misguided view that they will be protected by exemptions in the Act.

“There are concerns that an inability to comply with the wishes of donors who would like to place restrictions on the use of their gifts may lead to a drop in funding for some charities.”

Directory: Charity Law Association