The New Trusts Act 2019 has implications for all trustees and their obligations whether private trusts or charitable trusts. In this article we discuss the impacts it will have on charitable trusts. The Act came into force on the 30 January 2021 so trustees need to understand the changes now in place.

What are key changes to duties?

The Trusts Act 2019 imposes some key changes to the duties of trustees. These duties are set out in Sections 21 to 38 of the Act and are separated into 5 mandatory duties and 10 default duties. Mandatory duties cannot be modified or excluded by the terms of the trust. However the default duties can be modified.

Trustees should become familiar with the duties imposed on them by the new rules. The mandatory duties to be performed by the trustee include that trustees must: know the terms of the trust; act in accordance with the terms of the trust; act honestly and in good faith; act for the benefit of the beneficiaries or to further the purpose of the trust and exercise their powers for a proper purpose. The latter is very important for charities as a trustees duty should always be performed in the light of bringing about the charitable purpose of the charitable trust.

The default duties, that may be excluded or modified by the trust deed, are that trustees must: exercise reasonable skill and care; invest prudently; not exercise trustee powers for their own benefit; consider their exercise of power; not bind trustees to a future exercise of discretion; avoid conflicts of interest; act impartially; not profit from their position; not act for reward; act unanimously. If a trust deed is not clear on these duties then trustees could consider modifying their rules. For example, it may be appropriate to be clear that decisions do not need to be unanimous. In our view some of these duties are expressed with private family trusts in mind so modifying for a charitable trust context will often be important to do.

The new Trusts Act 2019 also sets out a list of ‘core documents’ the trustees must keep. These include:

  • The trust deed and any other document that contains terms of the trust
  • Any variations to the trust deed or the trust
  • Records of the trust property that identify assets, liabilities, income and expenses
  • Any records of trustee decisions
  • Any written contracts entered into during the trusteeship
  • Any accounting records and financial statements
  • Documents of appointment, removal and discharge of trustees
  • Any letter or memorandum of wishes from the settlor
  • Any other documents necessary for the administration of the trust
  • Any documents referred to above that were kept by a former trustee during their trusteeship

While all trustees must have a copy of the trust deeds and its variations, the core documents may be held by one trustee on behalf of all of them. The documents should be made available to the other trustees upon request.

How else will this impact on Trustees of Charitable Trusts?

The Trusts Act applies to Charitable Trusts and in turn its trustees are bound by the mandatory and default duties set out in the Act. This will impact trustees of charitable trusts as it imposes more onerous duties on trustees, increases their responsibilities, while also providing more guidance as to their obligations. The one duty that will not impact trustees of Charitable Trusts is provided for by Sections 51 to 55 of the Trusts Act 2019. This is the duty of trustees to disclose information to the beneficiaries which does not apply to Charitable Trusts or its trustees.

Is this an opportunity?

Maybe the glass is half full here. This is an opportunity for trustees to revisit the terms of their trust deed to determine what duties must be complied with and what duties may be excluded or modified. For example, the decision making duty should be varied to ensure decisions made by the charitable trust can be decided by a majority. The trustees should make sure they hold all the core documents required by the Act.

Other resources?

The following resources may help!

  • See the new Trusts Act 2019 here
  • To see a Charities Services Guidance on what the new Trusts Act means for registered charities click here
  • Hui E website has good resources here
  • Here is an article we did on liability of Trustees
  • An article on governance for faith based organisations
  • An article we did on governance for trustees here
  • We also did an article on the reporting obligations of charities click here

This article is not a substitute for legal advice and you should contact your lawyer about your specific situation. We would be happy to assist in your journey. Please feel free to contact Steven Moestevenmoe@parryfield.com

There is often confusion over Health and Safety – the rules have been around for a while now but we still get some common questions.  Below we set out some of the key points to consider to ensure compliance around volunteers. Check out our other guidance on these topics as well.

Is your organisation a PCBU?

Under the The Health and Safety at Work Act 2015, a PCBU has the primary duty to ensure the health and safety of its workers and others, so far as is reasonably practicable.

Reasonably practicable means that “which is, or was, at a particular time, reasonably able to be done in relation to ensuring health and safety.”  A PCBU is not expected to guarantee the health of safety of their workers but they must do what can reasonably be done to ensure health and safety.  Factors that will affect what is reasonably able to be done include:

  • The hazards and risks associated with the work and the likelihood of the hazard or risk occurring;
  • The severity of the injury or harm to health that could result from the hazard or risk;
  • What the person knows or reasonably should know about the hazard or risk and the ways of eliminating or minimising it;
  • What can be done to eliminate or minimise the risks and how available and suitable these risk controls may be;
  • The cost associated with eliminating or minimising the risk, including whether it is grossly disproportionate to the risk.

What about Volunteer organisations?

Section 17 of the Act states a “volunteer association” is not a PCBU.  The Act defines a volunteer association as “a group of volunteers (whether incorporated or unincorporated) working together for 1 or more community purposes where none of the volunteers, whether alone or jointly with any other volunteers, employs any person to carry out work for the volunteer association”.

If your organisation has no employees then it will be known as a volunteer association under the Act.  As a volunteer association your organisation would not be a PCBU and therefore the Act would not apply to your organisation.  However, frequently this exemption would not apply to organisations.

If your organisation has one or more employees then it is likely it will be a PCBU and thus the Act will apply.

If your organisation is a PCBU

If your organisation is a PCBU, it will have a duty to ensure the health and safety of others so far as is reasonably practicable.

So what about Volunteer officers?

Officers have a duty to exercise due diligence to ensure the PCBU complies with its duties and obligations under the Act.  In exercising due diligence, officers must take reasonable steps to:

  • Know about work health and safety matters;
  • Gain an understanding of the operations of the PCBU and the hazards and risks associated with those operations;
  • Ensure the PCBU has appropriate resources and processes to eliminate or minimise risks;
  • Ensure the PCBU receives information about incidents, hazards and risks;
  • Ensure there are processes for the PCBU to comply with the Act.

Volunteer workers

Under the Act a “volunteer worker” is a volunteer who carries out work in any capacity for a PCBU on a regular basis, with the PCBU’s knowledge and consent and is integral to the PCBU’s operations.  A PCBU would owe a duty to ensure, so far as is reasonable practicable, the health and safety of volunteer workers.

The volunteer worker would also have duties under the Act.  While at work they must:

  • Take reasonable care for his or her own health and safety;
  • Take reasonable care that his or her acts or omissions do not adversely affect the health and safety of other persons;
  • Comply, as far as the worker is reasonably able, with any reasonable instruction that is given by the PCBU to allow the PCBU to comply with the act or regulations; and
  • Co-operate with any reasonable policy or procedure of the PCBU relating to health or safety at the workplace that has been notified to workers.

“While at work” is not defined but likely means while at the workplace or at an event run by the PCBU.

Casual volunteers

A volunteer is not a “volunteer worker” if their voluntary work includes:

  • Participating in a fund-raising activity;
  • Assisting with sports or recreation for an educational institute, sports club or recreation club;
  • Assisting with activities for an educational institution outside the premises of the educational institution; or
  • Providing care for another person in the volunteer’s home.

Even though this volunteer would not be a volunteer worker, the PCBU would still have a duty to them to ensure their health and safety is not put at risk from the PCBU’s work.

The casual volunteer would not have duties under the Act.

If your organisation is a PCBU and something goes wrong the penalties can be high.  It is therefore very important that you are aware of whether your organisation is a PCBU or not.  In some cases this may be unclear.  We would be more than happy to talk with you about your particular situation to help you determine whether or not you are a PCBU.

This article is not a substitute for legal advice and you should contact your lawyer about your specific situation. Please feel free to contact Steven Moe at stevenmoe@parryfield.com

There is often confusion over Health and Safety – the rules have been around for a while now but we still get some common questions.  Below we set out some of the key points to consider to ensure compliance. Check out our other guidance on these topics as well.

Top 10 things to know

  • Be aware
    • The Health and Safety at Work Act 2015 has been in force for a few years and it has introduced greater accountability for Health & Safety for your organisation if you employ staff.
  • Are you a ‘PCBU’?
    • If you are a “Person Conducting a Business or Undertaking” then you are a PCBU.  A PCBU can operate in a voluntary way without primarily being set up to make money.  It has the primary duty of care in a workplace. See below for more on this.
  • Officers of PCBUs
    • Directors, managers and leaders of the PCBU also face significant penalties under the Act for failing to exercise due diligence in ensuring the PCBU carries out its duties.
  • To start: Identify risks
    • Ensure all risks and hazards are in your organisation are identified.  Start by looking at the facility, entry and exit points, stage areas, equipment used, the people, the weather … what are the risks where you are?
  • Control & Eliminate
    • Put procedures in place to control or eliminate risks to health and safety so far as is reasonably practicable.
  • Prepare
    • Maintain a health and safety policy with the help of your employees.  Put it into action and ensure your employees and contractors are aware of it and follow it – don’t just hide it in a drawer!
  • Tailor your documents
    • Customise your documents so they are practical for you.  One size does not fit all. It may be that a consultant is worth hiring to help you prepare documentation as well.
  • Check your visitors
    • If other contractors or other entities come on to your property you must ensure they have proper health and safety procedures in place and provide you with a copy.  Ask for it and check it!
  • Standing item
    • It is good practice to have this topic as a standing item at your board meetings.
  • Remember the penalties are high
    • Fines of up to $3 million and imprisonment of up to 5 years can be imposed.  “She’ll be right” is no longer OK. Think about these issues now, not later

This article is not a substitute for legal advice and you should contact your lawyer about your specific situation. Please feel free to contact Steven Moe at stevenmoe@parryfield.com