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The Impact of the Equality Act 2010 on Charities

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The Impact of the Equality Act 2010 on Charities The Impact of the Equality Act 2010 on Charities Debra Morris, Anne Morris and Jennifer Sigafoos Charity Law & Policy Unit, School of Law and Social Justice, University of Liverpool Published by: Charity Law & Policy Unit University of Liverpool Liverpool L69 7ZA August 2013 website: http://www.liv.ac.uk/law/research/charity-law-and-policy/about/ © Charity Law & Policy Unit ISBN 978-0-9536666-6-9 ii Table of Contents Executive Summary .............................................................................................................................. 1 I Introduction ......................................................................................................................................... 9 II Overview/ General Themes ......................................................................................................... 17 III The Legal Context: Charity Law ................................................................................................ 29 IV The Legal Context: Equality Laws ............................................................................................. 41 V The Legal Context: Interrelation between Charity and Equality Law ........................... 90 VI Case Studies .................................................................................................................................. 104 Religious Charities 104 Higher Education 117 Single-sex Provision 135 Challenges to Public Sector Spending Cuts 142 VII Conclusion and Recommendations ..................................................................................... 158 Appendix: Research Design and Methods ............................................................................... 167 Bibliography ...................................................................................................................................... 175 About the Charity Law & Policy Unit Debra Morris, Anne Morris and Jennifer Sigafoos are members of the Charity Law & Policy Unit within the School of Law & Social Justice at the University of Liverpool. The Unit carries out research into the legal issues facing charities and third sector organisations. As well as traditional legal research (in which its members have been very active), the Unit has a very strong track-record when it comes to funded research projects. These have had a strong empirical element and have often led to proposals for legal and regulatory reform, thereby making important contributions to policy change in this field. Examples are the Unit's path-breaking work on charity mergers, disputes in the charitable sector, the legal structure of charities and housing the mentally vulnerable. Further information on the work of the Unit is available at: http://www.liv.ac.uk/law/research/charity-law-and-policy/about/ i Acknowledgements The study has been made possible through the financial support of The Leverhulme Trust (reference no. RPG-372). The completion of this study and this report, The Impact of the Equality Act 2010 on Charities, would not have been possible without the co-operation of the charities, lawyers and regulators who agreed to take part in this project, either by being interviewed or by participating in a focus group. Thanks are due to all who willingly shared their experiences and gladly supplied us with further information when requested. To respect their confidentiality, participants’ names and any potentially identifying circumstances are not included in this report. The study has benefitted from the participation of two external advisors who have provided wise counsel throughout the project. The external advisors are Sir Bert Massie CBE, Former Chair of the Disability Rights Commission and Jean Warburton, Emeritus Professor, University of Liverpool. Colleagues within the Liverpool Law School are also thanked for their support and advice. The views expressed in this report are those of the authors. Debra Morris Anne Morris Jennifer Sigafoos August 2013 ii Executive Summary Objectives The Equality Act 2010 (‘the Act’) substantially altered the landscape for charities in the UK. It consolidated existing anti-discrimination legislation and brought some uniformity to the legislative approach to equality. This qualitative study explores the impact of the Act on charities. It is in the nature of charities to discriminate since many target their efforts toward people within a particular ‘equality strand’ (for example, females) to the exclusion of others (for example, males). The Act tightened the exceptions from anti-discrimination law that previously protected charities. This is an important, yet little understood area of law, especially by charities, which are largely run by volunteers. They must now ensure that their existing, often long-entrenched, approaches are Equality Act compliant. As the first comprehensive exploration of this area of law, the aims of this study were to draw conclusions on the Act’s impact on the charity sector in practice and to provide practical guidance for the sector to supplement and expand upon official guidance. The project sought to provide recommendations for reform of relevant legislation and official guidance and, more broadly, to contribute to knowledge and debate surrounding the aims of equality legislation and its interaction with charity law. 1 Research Activity Research Questions Research Questions: The narrow focus: Practical impacts of the Equality Act 2010 Interpretation - What specific legal questions arise from attempts to interpret the Act? Can these legal questions be answered with enough clarity to enable charities to operate in a sufficiently predictable legal environment? Compliance - How far does the unique nature of charities make compliance with the Act difficult? What specific issues are they likely to face, and how can they be addressed? Perception - Do charities understand what the Act requires them to do? Change - Are charities likely to alter their practices in potentially detrimental ways in order to attempt to comply with the legislation? What positive opportunities for charities arise as a result of the legislation? The broader view: Legislative reform In light of the conclusions drawn in the first area, should reform of the law be considered, and if so, what specific recommendations can be made? The widest context: Implications for wider debates What do the insights gained in the above two areas add to perspectives on and evaluation of the fundamental aims of equality legislation, and to debates over the role of charities and the nature of public benefit? Research Methods The study had two interrelated elements that inform one another: legal research into the interaction between charity law and equality law and an empirical investigation of the Act in practice. The legal research considered the unique legal issues which charities present in relation to equality law. Experts analysed current legislation and case law in order to determine where the law is unclear. Additionally, a 2 review was conducted of all of the available official guidance produced by regulators and other agencies. The empirical study was based upon a grounded theory approach and involved 45 interviews with charities, lawyers and regulators, as well as Freedom of Information Act requests of regulators. Interviews were broadly conducted in three separate stages: I. Interviews with lawyers and other advisors in the field II. Interviews with charities III. Interviews undertaken so as to expand upon the identified case study areas. The study concluded with two stakeholder focus groups to check the validity of the findings and to consider broader policy implications. The design of the project provides a thorough investigation of the topic through a socio-legal lens. Conclusions This research reveals that charities’ approaches to equality issues vary considerably. However, few charities are considering the wider implications of the Equality Act in relation to their charitable objects. The lack of uniformity is inevitable given that the sector itself is extremely diverse. Some parts of the charitable sector have been more directly affected by the Act, and have a commensurately greater awareness and (in some cases) understanding of its applicable provisions. Moreover, the differing size, legal structure and operation of charities leads to differing responses, with larger, professionally run charities having a more professional approach than the more typical ‘voluntary’ bodies, which are run by volunteers. Few charities have so far encountered legal problems with the Equality Act, but the Catholic Care case raises a spectre of the potentially drastic consequences of the Act for charities. The research findings are as follows: Interpretation Under s. 193 of the Act, a charity can restrict its support to one equality ‘strand’ or ‘stream’ and thus exclude other protected groups as long as the restriction is in furtherance of its charitable purpose AND the restriction is justified under one of two further tests: it is either a proportionate means of achieving a legitimate aim or it prevents or compensates for a disadvantage linked to the targeted group. There is significant overlap between these two tests and an unfortunate lack of clarity about how the proportionality test will operate independently of the disadvantage test. If there are genuinely two separate justifications in section 193(2), the 3 distinction should be clearer. If the existing wording is to stay in section 193, regulators must give clearer
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