Managing Redundancies In Charities

Like many organisations this year, charities have had to look at their resources and staffing levels in the context of financial stability during the global pandemic, which has hugely affected service provision in many charity sectors and, in some cases, threatened the continuing viability of the charity itself. Unfortunately, this has and continues to result in redundancies being made.

Redundancy is a potentially fair statutory reason for dismissal. However, in any claim for unfair dismissal, an Employment Tribunal will decide whether a redundancy dismissal is fair by looking at whether the employer’s decision to dismiss for that reason falls within the band of reasonable responses of a reasonable employer in those circumstances.

It is not enough to simply want to save money and pick people at random to go. Under s139 Employment Rights Act 1996, a redundancy situation can arise in a charity if it:

• Has ceased or intends to cease to carry on the charity;
• Has ceased or intends to cease to carry on the charity in the place where the employees are employed; or
• Can show the requirement for employees to undertake work of a particular kind has ceased or diminished.

Redundancy consultation for charities

It is important when making redundancies that charities comply with employment protection legislation. The aim of a redundancy consultation process is to minimise the risk of breach of contract, unfair dismissal and discrimination claims, but also to maintain good relations with all staff, whether they are selected for redundancy or not, and to minimise any adverse impact on the charity.

Failure to follow a fair procedure will normally render the dismissal unfair. In the context of redundancy, a fair dismissal will usually comprise the following stages:

• Warning and consultation;
• Fair basis for selection, including determining the pool for selection and the criteria to be applied;
• Consideration of alternative employment; and
• An opportunity to appeal the outcome.

If a charity is proposing to dismiss, as redundant, 20 or more employees at one establishment the duty to collectively consult with their employees’ representative will be triggered. The rules relating to collective consultation are fairly onerous and you can read a little more about them in this recent blog we wrote.