Employment law issues pose challenges for charities
The charity sector continues to face a number of challenges and pressures relating to the cost of living crisis and economic outlook generally. As employers, charities need to be certain that they are aware of changes to the law and best practice to ensure high levels of staff retention and to avoid potentially costly disputes.
Here is a summary of recent and proposed changes in law and best practice and areas of potential conflict that are likely to be of particular importance to charities.
Side hustles
As a result of more flexible working practices, together with the cost of living crisis, increased technology, and the gig economy, workers are increasingly looking for ways to earn extra income. This can range from running a full-blown business to trading on e-commerce sites or social media work.
Some employers allow employees to pursue side hustles, with or without permission. Others take the view that side jobs will never be acceptable. If consent needs to be sought, including a contractual term to this effect is recommended, together with a disciplinary policy that taking second jobs without consent may be considered misconduct.
Primary employers are in theory liable for a breach of the 48-hour working week limit (applicable to all jobs worked) and productivity may dip if an employee is working too long, so visibility of side hustle work undertaken is important, both legally and practically. Charities in particular may also need to consider reputational damage if an employee is involved in a side hustle which creates a conflict of interest or if they are involved in activities which could attract negative publicity.
There are numerous instances of side hustles, e.g. an individual who was running her events planning business during her working hours; an employee who was posting explicit content on a subscription website. Having a clear policy around this issue and informing staff is key to avoiding disputes and reputational damage.
Making redundancies properly
With many charities facing a perfect storm of increased running costs and reduced income from donations, redundancies may be necessary. This may simply be to reduce costs or it may be that you have identified that the charity could work more efficiently due to a reorganisation resulting in reduction of headcount.
Prior to considering redundancies you should consider whether alternatives can be explored to reduce costs such as recruitment freezes, banning overtime or requesting volunteers.
In the event that you consider redundancies may be necessary there are number of important issues to consider such as the number of redundances that may be needed, which roles will be impacted and the timings. The timing and duration of any consultation period with staff will be impacted by the number of redundancies being made.
To reduce the risk of claims, including unfair dismissal, you will need to go through a reasonable consultation process, consider ways in which the redundancies could be avoided and whether any redundant staff could be redeployed.
Redundant staff will be entitled to notice or notice pay and (if they have two or more years continuous service) a statutory redundancy payment calculated based on their age, length of service and weekly pay (subject to a statutory cap). Therefore a redundancy process can represent a large financial cost particularly if the redundant employees have long periods of service.
If charity employers want to reduce the risk of potential claims they can consider offering enhanced redundancy packages in exchange for employees signing settlement agreements in which they would waive their right to pursue claims. Offering enhanced packages can increase the overall costs dramatically.
Having a clear business case and reasonable process will ensure that any disruption to the charity’s work is reduced and that any impact to staff morale is minimised.
Due to the complex legal issues and procedural requirements it is advisable that you seek legal advice in the event you think redundancies may be necessary.
The menopause issue
With around two thirds of people employed in the charity sector being women it is somewhat surprising that it has taken so long for the menopause and its impact to be discussed openly. The menopause has become an increasingly prominent issue in the last 18-24 months with an explosion in media coverage. Whilst this has been broadly welcomed as a positive development for women’s rights it has increased the risks for employers who may not be adequately prepared.
The impact of the menopause can be severe with symptoms severely effecting a woman’s life. In the event that the physical and/or mental effects of the situation are sufficiently severe, it is likely that this will be considered a disability under the Equality Act 2010. As such any unfavourable treatment from employers due to menopause could lead to potential dispute and claims.
In the event that a woman is struggling to perform her role due to menopause an employer is likely to be obliged to consider if they could make any changes (adjustments) to her role to help overcome the impact of menopause. For example, if an employee is suffering with night sweats and insomnia and therefore having hugely disrupted sleep, an employer could consider offering home working or flexible start times by way of an adjustment.
Charity employers should take a proactive approach to the issue of the menopause and should consider:
- Introducing menopause training to all staff.
- Introducing a menopause policy.
- Appointing menopause champions to help support vulnerable staff.
- Proactively considering and suggesting possible adjustments.
Despite women making up a large percentage of the workforce and the fact that all women will go through the menopause at some point many employers still have no clear policy around dealing with matter. A survey of organisations in Hertfordshire (including a number of charities) showed that only 25% had implemented a menopause policy and only 15% had provided menopause training.
If charity employers want to retain staff going through menopause, maximise productivity and avoid claims, they need to take positive steps to consider the condition and its impact on their charity.
Carer's Leave Bill
As part of the government’s focus on ensuring more people are supported to remain in employment, it is looking at various measures to support workers. There is currently no dedicated right for carers of long term sick, disabled or elderly people, to take time off work; carers often rely on other leave rights, including annual leave.
The proposed Carer’s Leave Bill will give eligible employees an additional right to time off work. The right is for at least one week’s unpaid leave in any 12-months. It is proposed that carer’s leave can be taken “flexibly”, in individual or half-days and that carers will have protection from dismissal or detriment.
Flexible working changes
The government is also supporting the proposed Employment Relations (Flexible Working) Bill currently going through the House of Commons, which contains the following provisions:
- Flexible working requests will now be a “day one” right.
- Two formal requests can be made in a 12-month period.
- Employers must consult with employees before rejecting.
- The period to consider and decide will be reduced to two months.
As women are statistically still more likely to have family caring responsibilities and to submit flexible working requests, changes to the rules of flexible working requests and introducing carers leave is likely to have a significant impact on charities due to the large numbers of women employed in the charity sector, as already mentioned.
Hybrid working
Some recent commentary has suggested that hybrid working may have “failed” with performance levels potentially dipping now that the novelty of working from home has become the new norm. A recent article in the Daily Telegraph has reinforced this view by reporting that 1 in 7 firms were looking to increase office hours to no less than four days a week for full timers.
A recent Microsoft survey has revealed that 80% of bosses think that workers are less efficient when working from home, in stark contrast to 87% of the workers themselves, who believe that they are more so. Microsoft’s CEO termed management concerns as “productivity paranoia”.
A 2020 ONS Survey demonstrated that those who worked from home to any degree worked more hours (32.3 on average per week) than those who never worked from home (27.7) and had a lower sickness absence rate.
Whether hybrid working has been a success or failure is likely to be highly personal to your charity. It does seem clear however that recruitment and staff morale may be negatively impacted if this option is not offered. If you have already introduced hybrid working and this has not been successful it is important to seek advice on how to withdraw or vary this arrangement as it may be considered a breach of contract to do so.
Maternity leave protection
A recent report by the Women and Equalities Committee has found that large numbers of women still feel that they suffer some form of disadvantage at work due to being pregnant or taking maternity leave. The report has therefore recommended enhanced protection for both new and expectant mothers.
The Maternity and Parental Leave Regulations 1999 already provides that an employer must offer a woman on maternity leave a suitable alternative vacancy (where one is available with the employer or an associated employer), in preference to a suitable non maternity leaver, before making a woman redundant during maternity leave.
The new Bill proposes that redundancy protection applies from the point the employee notifies the employer of her pregnancy, whether orally or in writing. The government will also extend the redundancy protection for six months once a new mother has returned to work.
There will be consequences for the employer for failure to comply with the regulations, including liability for unfair dismissal.
A four-day week
The UK pilot programme for a four-day week being run by business community campaigning platform 4 Day Week Global has now concluded and the results published. The campaign aims to shift the norms of work culture from a 40-hour five-day week to a 32-hour four-day week with no loss of pay. Comprising 61 companies and running from June to December 2022, the results from the UK pilot appear to be overwhelmingly positive. In particular:
- 92% of organisations who participated are continuing with a four-day week.
- Revenue rose by an average of 1.4 % over the trial.
- The number of staff leaving fell by 57% over the trial period.
- 15% of employees who participated in the trial said that no amount of money would make them accept a five-day week schedule in their new job.
4 Day Week Global is continuing to try and persuade companies to adopt the four-day week so we can expect a considerable increase in coverage around this issue moving forward.
Many HR issues
Like all organisations, charities face a plethora of HR issues to grapple with including new legislation but with the right planning and policies, legal risk can be minimised while at the same time enhancing the workplace for employees.
