26 Oct 2020

Supreme Court: Equality Act and charities

A significant UK Supreme Court decision on charities and the Equality Act also highlights the vital role of a charity’s governing documents and purposes.

The UK Supreme Court has last week issued a judgment on the compatibility of a charity restricting access so as to benefit a particular beneficiary group with requirements of the Equality Act 2010. This is a significant decision. Charities that provide support and services to a specific group (e.g. faith-based) will read the judgment with interest. It also highlights important charity law points beyond the particular application of the Equality Act.

The background

Agudas Israel Housing Association (“AIHA”) is a housing association with charitable status. Its purposes aim to provide social housing and in particular for members of the Orthodox Jewish community. The case involved Hackney London Borough Council as AIHA made its housing available to the Council as part of its social housing provision.

The claim was brought against AIHA and the Council in relation to a mother and her four children who had been waiting for Council housing accommodation. While she was waiting for accommodation, housing with AIHA had been made available to members of the Orthodox Jewish community. The mother’s claim was for unlawful direct discrimination in this approach and housing policy (which meant her family had to wait longer) to provide this housing by AIHA to members of the Orthodox Jewish community.

The legal issues under the Equality Act

Two parts of the Equality Act were examined.

First, a provision that offers an exemption where positive action seeks to address, in a proportionate manner, a disadvantage connected to a ‘protected characteristic’.

Secondly, rules for charities that permit a charity to restrict access to its benefit to those with a ‘protected characteristic’ where such a restriction is a proportionate means of achieving a legitimate aim or prevent/compensate for a disadvantage connected to the ‘protected characteristic’. For the second rules to apply, the charity must be acting in “pursuance of a charitable instrument” – i.e. acting in accordance with its governing document and furthering its purposes.

The ‘protected characteristics’ under the Equality Act are age, disability, gender reassignment, race, religion or belief, sex, sexual orientation, marriage and civil partnership and pregnancy and maternity.

The decision

The Supreme Court upheld the decision of the lower courts that the approach and policies of the Council and AIHA were proportionate and lawful. The Court identified that there were legitimate aims being pursued by AIHA and there was need and disadvantage to address for the Orthodox Jewish community with social housing provision, as a result of a ‘protected characteristic’. AIHA was allowed to have a clear policy on this issue in order to further its constitutionally-stated charitable purposes.

A previous Scottish decision

The AIHA and Hackney case has some similarities to a 2014 Scottish Charity Appeals Panel decision about St Margaret’s Children and Family Care Society. That related to the provision of adoption services in accordance with the teachings of the Catholic Church.

Governing documents and purposes

The Supreme Court’s decision provides wider points for charities.

Governing documents matter.

Purposes (as stated in a governing document) matter.

Without AIHA’s policy being based on what its governing documents set out, consideration of matters would be different. Furthering purposes is important for aspects of the Equality Act exemptions. Beyond that, it is a fundamental point for all charities. A charity’s strategic direction and operations must be anchored to the purposes as found in its constitution.

In a different setting, the role of a charity’s purposes where vital in a recent Court of Session decision in Scotland. It was a case involving charities rates relief. The furtherance of the charity’s constitutionally stated purposes (in its articles of association) was a central point to the court agreeing with the charity that it should indeed benefit from rates relief.

Implications of AIHA and Hackney

Charities that provide services and support to specific communities or groups will wish to consider the case to ensure they are acting in a manner consistent with the Equality Act.

More generally, the Supreme Court’s opportunity to examine these parts of the Equality Act provide a reminder for the wider sector about governing documents and charitable purposes.

For guidance and help with charity law and governance matters, get in touch with Alan Eccles alaneccles@bkf.co.uk