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Published November 15, 2011
vol 7(1) - November 2011
We sent you our last newsletter back in December 2010 when we were still known as the Centre for Sport and Law. Click here for the announcement describing our brand renewal to the Sport Law & Strategy Group. Our quarterly newsletter has brought you important content in the following areas: legal updates, new legislation and case law, governance tips, risk management and values management practices, social media, communications strategies, as well as all kinds of other planning and strategic advice.
The relaunch of our newsletter highlights a very important update for all federally incorporated National Sport Organizations (NSOs) and Multi-Sport Organizations (MSOs). The new Not-For-Profit Corporations Act that just came into force on October 17th, 2011 will involve a restructuring of each NSO's and MSO's governance structure and legal documents (articles of incorporation and by-laws). Ignoring the NFP Act brings peril - dissolution of your organization! If you haven't started investigating this significant piece of legislation - consider this newsletter your official introduction to the NFP Act!
We'll be sending our newsletter every three or four months. The content will include summaries and links to new material we post on our website - plus updates on current events and other news. You can also join our Facebook page and get immediate updates. If you don't want to receive the newsletter - no problem - just choose to unsubscribe at the bottom of this message.
The Canada Not-for-Profit Corporations Act took effect on October 17, 2011. Each federal non-profit corporation (nearly every NSO and MSO) now has three years to transition from the current Canada Corporations Act to the new Not-for-Profit Corporations Act (referred to by Industry Canada as the NFP Act - but sometimes also called the NPCA or the CNCA). This Act forms the legal basis of your corporation - it is what makes your corporation a legal entity and allows you to exist as a governing organization. Organizations that don't transition to continue under the new Act will be dissolved.
Transitioning to comply under the new Act will require important changes to your governance structure and governing documents. For example, under the new Act, representative boards made up of ex-officio directors will not be allowed, and strict limits will be imposed on appointed directors. So, MSOs and NSOs that have an "Ontario Representative" who assumes that role by virtue of his or her role with the Ontario region, or that have directors who are appointed by a constituency or group, will need to create different Board structures. Also, under the new Act, all classes of members (even members without voting privileges) will be entitled to vote on certain fundamental changes to the corporation, particularly those that affect their membership class. Organizations with associate member classes of "athletes", "participants", "teams" or "individuals" would need to poll each and every member!
Three years sounds like a long time to prepare, but between now and the Fall of 2014 your organization has only three (and in some cases only two) AGMs at which to make changes. Plus, most of the changes you'll want to make to your by-laws should happen before you apply for continuance under the new law. Further compounding the challenge for those NSOs that are also RCAAAs, is that the Canada Revenue Agency (CRA) must approve your new Articles of Incorporation, which will take even more time.
We've gone through the Act and the Regulations line-by-line and identified over 20 possible problematic areas for organizations. We are preparing a new bylaws template (which meets all the new compliance requirements) suitable for sport and we have already started advising and giving presentations to some NSOs and MSOs. We have also built a new section of our website as an introductory resource to the Act. We are available for organizations with questions about the transition process - feel free to contact Rachel Corbett at rmc@sportlaw.ca or any other member of our team.
There are two other important pieces of new legislation - and both will affect every NSO, PSO, and MSO that has offices in Ontario. A recent amendment to the Ontario Occupational Health and Safety Act requires organizations to implement a large number of workplace violence and harassment policies - including risk assessment, orientation, training, refusal to work, return to work, and other documentation and safety provisions. These policies are now required by law, and organizations that are not compliant can face fines. We've created a very detailed information and policy template package which will make complying with the legislation straightforward and painless. There is more information posted on our website.
The second important piece of new legislation is the Accessibility for Ontarians with Disabilities Act (AODA). This legislation is even more time sensitive than the previous legislation - organizations are required to comply with this Act by January 2012 - in two months! Complying with the Act means implementing a series of 11 requirements and standards - which we have outlined on our website. Every not-for-profit organization in Ontario with at least one employee is bound by this law and must comply with the Act.
Organizations that are Registered Canadian Amateur Athletic Associations (RCAAAs) may be affected by proposed changes to the Income Tax Act. RCAAAs will now be required to promote amateur athletics as their exclusive purpose, as opposed to their primary purpose. If an organization operates a significant commercial venture (in tandem with, or in addition to) its regular not-for-profit activities, then these activities may have to be structured differently if the organization wishes to maintain its charitable designation. With the introduction of the NFP Act - this is a perfect time to make full changes that comply with both laws. Read more on our website.
Organizations use social media in two ways - reactively and proactively. An athlete's negative tweets about a rival may require a reactive response from an organization - and an organization may want to proactively use Facebook to reach out to members. There are strategies for organizations in both roles. Read more on our website.
The Court of Arbitration for Sport (CAS), the "international court of sport", recently ruled on a discipline and eligibility issue related to an anti-doping suspension. CAS determined that an IOC rule (the "Osaka rule"), stating that an athlete who is suspended for an anti-doping violation of more than six months was automatically ineligible for the next Olympic Games (whether or not the sanction had come to an end), was in violation of the World Anti-Doping Association's (WADA's) Code of Conduct. Simply, suspending the athlete for the violation was the sanction - and the IOC could not impose an additional sanction (being declared ineligible for the next Games) in addition to the original sanction.
One of the main lessons NSOs can draw from this precedent, as we explain in more detail on our website, is that an athlete cannot be sanctioned twice for the same offense. Prior misconduct cannot be used as a subsequent eligibility issue because that would be "double-jeopardy". This case also has lessons for NSOs regarding their "piggy-backing" of sanctions onto another organization's sanction (e.g., an NSO adding a sanction onto a PSO's sanction, or vice versa) as well as the notion of progressive discipline.
