If someone is self employed but still receives a yearly salary from a charity , would you expect them to have a contract?

[frumpet]

Sorry this is really boring but a friend is on the committee of a local charity , the charity are the trustee's of a property which someone is paid to look after , they are paid a yearly salary plus they invoice the charity for other things which they do . My friend is really concerned because this person has no contract of employment with the charity . She has had a bad experience in the past when working with a charity and doesn't know if she is being paranoid or if this person should have a contract of some description . The other issue is that the person who is employed by the charity is married to one of the trustee's , she is worried that you need some sort of special permission if this is the case ?

She is happy with the work that the person does and doesn't believe there is any malicious intent to be fraudulent but having experienced issues at a previous charity , she doesn't want to be involved if everything isn't done by the book . She did contact the chair of the committee , but they didn't address her concerns at all .

Every lawyer I've ever heard on this sort of topic advises "written contract". Not just because of concerns about fraud, but even just differing interpretations of what was originally agreed. No one's memory is 100% reliable.

That's what I thought , just a simple contract saying your job description is this , your wage is this , this will be reviewed whenever , notice for job is however many weeks etc . I think it would safeguard both parties interests .

Would make sense of even to agree that they are self employed and therefore the charity is not obliged to do tax or N.I audits their responsibility. A charity would be expected to have clear an of who they are paying, why and how much. Just a few lines would do it

Especially as one of them is married to one of the trustees then there no worry of just being given money for nothing

As I said I don't think she think's there is any financial impropriety occurring at the moment but that if there was a contract then it would all be transparent .

As the employee is married to a trustee she is a "connected person". There are a number of conditions that must be met to comply with relevant law:

• There must be a written agreement between the employee and the charity setting out how much they will be paid

• The payments must be reasonable for the services provided

• Before entering into the agreement the trustees must decide that they are satisfied it is in the best interests of the charity

• There must be nothing in the charity's governing document prohibiting them from employing a connected person

• The employee's spouse must not have taken any part in the decision making

• Permission must be obtained from the Charities Commission

It sounds like this charity is currently in breach of the law. The employee's spouse could be required to reimburse the charity for the payments and any benefits supplied to the employee. They need to get their house in order.

Any person who is employed (even part-time) should have a contract, charity or not. I'm not sure, but I think it's a bit dubious for some duties to be part of a contract of employment, and some as a self-employed person, which is what I think you're saying, UNLESS these duties are very different e.g. some about caretaking and some about, for example, management training (but I'm not an expert in employment law, so you'd need to check this out further). If the duties do all come into 'caretaking', it would probably be better for the charity to formalise those duties with a single job description and a contract of employment for that job.

I also think your friend is very right to be concerned about the fact this employee is a relative of a trustee. The married trustee would have a 'conflict of interest'. This Charity Commission guidance says that:

"Conflicts of interest usually arise where either:

• there is a potential financial or measurable benefit directly to a trustee, or indirectly through a connected person" - spouses are 'connected persons'

and

"Trustees can only benefit from their charity where there is an explicit authority in place before any decision conferring trustee benefit is made.
Examples of benefits to trustees are where the trustees decide to:

• employ a trustee’s spouse or other close relative at the charity [...]"

So the charity would have had to specifically get authority before the person is employed or paid. Authority will come either from a clause in the charity’s governing document or by asking the Charity Commission for permission. If they haven't done either of these things, they're acting illegally.

I suggest your friend take a look through this guidance, too (and any other associated documents) from the Charity Commission website - most are written in a pretty easy to understand way - and, really, she should have ben given this sort of information when she agreed to become a trustee, as part of the induction, particularly as there are other legal liabilities too.

I'm sure they/she'll be able to take advice and get it sorted, though - as long as they're dealing with it there's no need to panic.

(I'm a chair of a charity and give advice to charities on governance)

Ah, a more succinct cross-post!

Thank you so much prh47bridge and crabbyoldbat I will show her this in the morning . As I said the committee is small ( about 5 or 6 ) and therein lies the problem I think , if one of the trustee's is married to the caretaker and still voting on stuff , well , it just doesn't seem quite right . Hopefully she can get it sorted without upsetting the apple cart too much