The risks charities can face in employment law
What people regularly forget is that a charity is a business like any other. Charities therefore deal with a multitude of individuals- from directors and staff to trustees and volunteers.
Charities are placed in a position of trust and therefore may be greatly criticised as a result of any unfortunate incidents such as claims of unfair dismissal or discrimination.
As with other sectors, employees are fully protected with all of the UK’s employment laws (although some have certain qualifying criteria). This includes, for example the right:
- not to be unfairly dismissed;
- to national minimum wage, rest breaks and statutory sick pay;
- to take family friendly pay e.g. maternity pay; and
- to receive certain periods of notice on termination and redundancy pay.
At the very start of employment, employees should understand:
- Their individual role;
- The terms of their contract; and
- What is expected of them from the outset.
There is a requirement to issue employees with a contract of employment within 8 weeks of starting work. Charities should also have accurate and clear policies and a comprehensive staff handbook to cover everything that an employee needs to know.
Furthermore, having a thorough internal dispute handling system in place is essential and can prevent issues from escalating and this will stop things getting out of hand and ending up in a tribunal and the public eye.
Are casual staff employees?
Most organisations are of the view that casual staff are not employees. However, what happens in practice must be carefully considered to decide whether in fact they satisfy the test of being an employee.
Things that point towards a casual member of staff being an employee are, for example:
- They provide personal service and cannot insist a substitute carries out the work instead.
- The Charity has an element of control over their hours or their work.
- There is a pattern of work always being offered by the charity and always accepted by the staff member.
If casual staff do satisfy the test of actually being an employee then they also have the benefit of full employment law protection regardless of how many hours they work.
Although there is no legal definition of volunteering, it usually involves an element of unpaid work (except for expenses which are properly incurred) for the benefit of a third party.
Whether or not a volunteer can actually claim they were in fact an employee (and have the benefit of the full protection of employment law) depends on the factors referred to above in respect of casual staff.
However, where there is no obligation on the charity to provide work and for the volunteer to accept it, expenses are only out of pocket expenses and where there is a clearly drafted volunteer agreement in place it is likely that the volunteer is not an employee.
If the volunteer is not an employee, in the eyes of a tribunal, they would be termed a worker.
A worker is not entitled to certain rights such as family friendly leave, unfair dismissal and statutory minimum notice. However, a worker is still entitled to the following:
- Paid annual leave;
- Rest breaks; and
- Discrimination and whistleblowing.
There have been several cases where volunteers have successfully brought claims of unlawful discrimination usually linked to the termination of their volunteering.
The Employment Appeal Tribunal has set out a number of factors to be considered in deciding whether trustees/board members are also employees:
- Was there a right to payment? If so: Was payment fixed in advance or did it relate to the amount of work done? Was it paid by way of salary? How much was paid? How was it treated for tax and national insurance purposes?
- The extent and weight of the duties performed.
- Whether the individual was subject to close control.
Depending on the relationship trustees may be employees or workers and therefore benefit from employment law protection.
A director is not automatically an employee of the company, although they can be an employee if they enter into a contract of employment. Executive directors are usually employees of the company, while non-executive directors are more likely to be self-employed. However, this is only a general rule and employment status will depend on the assessment of all relevant factors referred to above.
The task of managing a charity’s workforce can be complex because, as well as having directors and staff, there are volunteers and trustees who all have their own rights and needs. It is important that an organisation is aware of each individual’s rights.
For further information please contact the Employment Team.