Charities, registered under the Charities Act 2011, need to ensure that they act within their charitable purposes and for the public benefit. Charity trustees have a responsibility to ensure that resources are only used in pursuance of the organisation’s objectives and a duty to act in the best interests of the charity at all times. Such duties can impact the way in which:
- The charity approaches employee recruitment;
- The numbers of employees that they take on;
- How they are managed; and
- How employment is ultimately brought to an end.
It is incumbent on all charity employers, irrespective of the nature of the organisation and its purpose, to comply with employment law legislation.
2020 changes to contracts of employment – an overview for charities and companies
Following a change to the law on 6th April 2020, this extends to ensuring that employees are issued with legally compliant contracts of employment from day one (previously charities and companies had two months in which to do this after the employee commenced work).
The global coronavirus pandemic hijacked most non-urgent/administrative matters for many employers truth be told. However, as the months have passed and things are (for the most part) less frantic than they were at the end of March, we are encountering more and more charities and companies who did not manage to review their contracts of employment prior to 6th April 2020 and whose documentation is now not legally compliant.
The employment law changes that were implemented in April 2020 were significant and included:
- Timing – the statement of terms and conditions (usually in the form of an employment contract) needs to be given on the first day of employment, if not before.
- The right to a statement of terms has been extended – as well as employees, workers are now entitled to receive a statement (see below).
- The exclusion for those employed for less than a month no longer applies – all workers now have the right to receive a statement, regardless of how long their employment lasts.
- The details to be included in the statement were increased and in addition to the previous list of requirements, employers must now also cover:
- Days of work (and if these vary, how they are determined);
- Terms and conditions relating to paid leave (other than holiday or sick leave);
- Any benefits not covered elsewhere in the statement;
- Details of any probationary period (including trial shifts); and
- Training – details of any entitlement provided by the employer, whether any training is compulsory and whether there is any compulsory training which the employer does not pay for.
Employee vs worker
In employment law, a core of legal protection is given to those that are employed by an employer. Beyond this, the Employment Rights Act 1996 (ERA) also recognises the category of “worker”. This includes all employees and also those who have entered in to or work under:
“any other contract…whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.”
There are two elements to this definition:
- The obligation to do the work personally; and
- That the person is not on business on their own account.
Those with worker status do not have the full protection of employment law and were not previously entitled to receive a statement of terms under section one ERA.
Workers may not have a written contract with the recipient of their work or they may be engaged under a consultancy agreement or contract for services. Any documentation is unlikely to meet the requirements of section one ERA. For workers engaged after 6th April 2020, new documentation will be required.
Since 6th April 2020, existing employees now have the right to request an updated statement (covering the new requirements and any update to the employee’s previous statement). Employers have a month to comply with such requests.
In addition, where there is a change to any of employee’s particulars of employment (including the new requirements) (referred to as a ‘trigger’), the employer must provide the employee with a statement of the changes “at the earliest possible opportunity” and not later than one month after the change.
There is no right for existing workers to request an updated statement, and the trigger provisions for an employer to provide one do not seem to have been drafted to apply to workers (although this could yet be clarified).
For existing workers then, it seems that they will only need to be provided with a section one statement if their engagement is terminated and then renewed.
What to do?
Whilst recent research by the charity leaders body Acevo and the Centre for Mental Health suggests that seven in 10 charities could make redundancies in the next year, we are aware of many charities who continue to recruit new staff to manage their services. Those staff should be furnished with the correct documentation at the outset to avoid disputes later on.
How Nelsons can help
Document reviews and changing terms and conditions can be a daunting prospect but our team specialise in making these things as pain free as possible. We have experience in helping charities to identify the correct status of their staff and volunteers and providing assistance with documenting the relationship in the correct legally compliant format.