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From 28 April 2013 the Mental Health Discrimination Act 2013 ("the MHDA") REMOVES Model Article 18(e) and its equivalents.
Model Article 18(e) enables a company to treat a director as ceasing to hold his/her appointment "by reason of that person's mental health, etc....". The following Model Articles and RTM drafts will be changing from that date:
Why is the change taking place?
The MHDA applies to various pieces of legislation* in order to remove what is seen as the "last significant form of discrimination in law in our society" (MIND- mental health charity). It is aimed at attacking outdated ideas that persons with mental health issues can never recover. Please note that Model Article 18(d) is still contained within the Model Articles and so a director's appointment may cease reason of physical or mental incapacity (subject to a medical practitioner's opinion).
There are two issues in particular:
1. What will the Model Articles now look like? Will they be renumbered? The MHDA does not give any indication on this point and BIS have not issued any statements saying that they will reissue the Model Articles.
2. What about existing companies? Companies with "old" (pre-28 April 2013) Model Articles will not be required to change them but would be well advised not to try and use use 18(e) to remove a director as this would probably fall foul of anti-discrimination legislation Many companies might wish to amend their articles to reflect good practice/governance. Certainly, I imagine larger PLCs might wish to do this.
*Note - the MHDA also impacts on legislation relating to who can be a Member of Parliament and who can sit on juries.
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