OTHER CHAPTERS
I. SETTING UP AN ORGANISATION
Ch.1: Trusts & unincorporated associations
Ch.2: Companies & other incorporated structures
Ch.3: Charitable status, charity law & regulation
Ch.4: The objects clause
Ch.5: The governing document
Ch.6: Setting up an organisation
Ch.7: Registering as a charity
Ch.8: The organisation's name
Ch.9: Branches, subsidiaries, partnerships & mergers
II. GOVERNANCE & MEMBERSHIP
Ch.10: Members of the organisation
Ch.11: Members of the governing body
Ch.12: Officers, committees & sub-committees
Ch.13: Duties & powers of the governing body
Ch.14: Restrictions on expenses, remuneration & benefits
III. RUNNING AN ORGANISATION
Ch.15: The registered office and other premises
Ch.16: Paperwork requirements
Ch.17: Meetings & decision making
Ch.18: Legal agreements
Ch.19: Organisational & personal liability
Ch.20: Insurance
Ch.21: Financial difficulties & winding up
IV. EMPLOYEES, WORKERS, VOLUNTEERS & OTHER STAFF
Ch.22: Employees and other workers
Ch.23: Rights, duties & the contract of employment
Ch.24: Model contract of employment
Ch.25: Equal opportunities in employment
Ch.26: Taking on new employees
Ch.27: Pay & pensions
Ch.28: Working time & leave
Ch.29: Disciplinary matters, grievances & whistleblowing
Ch.30: Termination of employment
Ch.32: Employer-employee relations
Ch.33: Employment claims & settlement
Ch.34: Self-employed workers & other contractors
Ch.35: Volunteers
V. SERVICES & ACTIVITIES
Ch.36: Health & safety
Ch.37: Equal opportunities in provision of goods & services
Ch.38: Confidentiality, privacy, data protection & freedom of information
Ch.39: Intellectual property
Ch.40: Publications & publicity
Ch.41: Campaigning & political activities
Ch.42: Public gatherings & entertainment
Ch.43: Food & drink
VI. FUNDING & FUNDRAISING
Ch.44: Funding & fundraising: General rules
Ch.45: Fundraising activities
Ch.46: Tax-effective giving
Ch.47: Trading companies
Ch.48: Contracts & service agreements
VII. FINANCE
Ch.49: Financial procedures & records
Ch.50: Annual accounts, reports & returns
Ch.51: Auditors
Ch.52: Corporation tax, income tax & capital gains tax
Ch.53: Value added tax
Ch.54: Investment & reserves
Ch.55: Borrowing
VIII. PROPERTY
Ch.56: Land ownership & tenure
Ch.57: Acquiring & disposing of property
Ch.58: Business leases
Ch.59: Property management & the environment
IX. BACKGROUND TO THE LAW
Ch.60: How the law works
Ch.61: Dispute resolution & litigation
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UPDATED INFORMATION FOR CHAPTER 31:
VOLUNTARY SECTOR LEGAL HANDBOOK
This page contains information that has appeared on Sandy Adirondack's legal update website for voluntary organisations at www.sandy-a.co.uk/legal.htm. For current updates, including potential changes that are in the pipeline, see the legal update website.
These websites for each chapter update
the 2nd edition of The Voluntary Sector Legal Handbook by Sandy Adirondack and James Sinclair Taylor (Directory of Social Change, 2001). The websites are not intended as a comprehensive update and should not be treated as such.
To order a copy of The Voluntary Sector Legal Handbook, print out the order form at www.sandy-a.co.uk/bookserv.htm or send an email order by clicking
. It costs £50 for voluntary organisations or £80 for others, plus 10% p&p. We expect the third edition to be published in 2007.
The information here covers the law applicable to England and Wales. It may not apply in Northern Ireland and/or Scotland. These news items are not a full or definitive statement of the law and are not intended as a substitute for professional legal advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be taken by the author.
Chapter 31
REDUNDANCY
ACAS GUIDANCE ON REDUNDANCY HANDLING
Added 11/11/06. This information adds to chapter 31 in The Voluntary Sector Legal Handbook 2nd edition.
ACAS issued an updated version of its advisory booklet on redundancy handling on 9 October 2006. The booklet is at www.acas.org.uk/index.aspx?articleid=747.
REDUNDANCY POOL WHEN FUNDING ENDS
Added 18/12/04. This information adds a new s.31.1.3 in The Voluntary Sector Legal Handbook 2nd edition.
A particular redundancy issue could affect organisations that have multiple grants or contracts for similar work. If a grant/contract for a project or piece of work ends and there is no more funding available, it is not a simple matter of making those staff redundant. If other staff in the organisation are doing the same or similar work (even in other projects or other parts of the organisation), those other staff may need to be included in the pool of employees to be considered for redundancy. So if, for example, an organisation has two similar advice projects each with its own manager, administrator and advice workers, and the funding for one project comes to an end, the proper pools for deciding who will be made redundant may be both managers, both administrators, and all the advice workers.
Failure to consider the appropriate pool could make a redundancy dismissal unfair. In general, an employer can decide which pool to use for redundancy, provided the choice is sensible. But in a case in January 2003, the employment appeal tribunal said that it was unfair to limit the choice to employees in one division. While the case may not be directly comparable to voluntary sector situations, it raises complex issues about the choice of pool. Before making staff redundant, employers should take specialist advice about the proper pool to be considered.
The case is Kvaerner Oil and Gas Ltd v MG Parker and others, at www.bailii.org/uk/cases/UKEAT/2003/0444_02_2801.html.
STATUTORY DISMISSAL PROCEDURE AND REDUNDANCY
Added 26/8/06. This information updates s.31.2 in The Voluntary Sector Legal Handbook 2nd edition.
The statutory dismissal and disciplinary procedure (see above) applies to virtually all dismissals, including redundancy. The timing of collective consultation (where required), individual consultation and the DDP stages of written statement/meeting/appeal can be convoluted, and it is important to get advice to ensure everything is done in the correct order.
It is also essential to provide all required information to affected employees and, where applicable, their trade union(s) or employee representatives. In a case in April 2006, the employment appeal tribunal made clear that as part of the statutory dismissal procedure, the employer must tell the employee the reason for the redundancy, the selection criteria, and where a scoring system is used, the employee's score. However the employer is not obliged to tell the employee the threshold (the score beyond which his or her job would be safe) or the scores of other employees.
The employer only has to give the broad reason for dismissal--in this case, redundancy--as part of the stage 1 written notice. The reason for the redundancy, the selection criteria and if applicable the employee's score have to be given before the stage 2 meeting, in enough detail so the employee can respond. This information does not have to be in writing but it is generally sensible to provide it in writing to ensure the employee has it, and to have evidence that it has been provided. Failure to provide the necessary information means that the dismissal is in breach of the statutory procedure and is therefore unfair.
The decision in Alexander & Hatherley v Bridgen Enterprises is at www.bailii.org/uk/cases/UKEAT/2006/0107_06_1204.html.
REDUNDANCY INDIVIDUAL CONSULTATION
Updated 11/10/04. This information updates s.31.2.1 in The Voluntary Sector Legal Handbook 2nd edition.
Case law has established that in the vast majority of redundancies employers have a duty to consult the individuals who are or might be affected, and there is a statutory duty to consult a recognised trade union or unions or workplace representatives where the employer proposes to make 20 or more employees redundant in a 90-day period. A tribunal case in 2002--which does not set a precedent, but seems to follow the general drift of recent employment law--has indicated that even where fewer than 20 employees are to be made redundant, the employer should inform and consult a recognised union or unions or workplace representatives where these exist.
In a further case in early 2003, Grant v BSS Group, a dismissal was held to be unfair because even though the employer had consulted the person chosen for redundancy, it had failed to consult with all of the potential redundancy pool. These cases illustrate the importance of taking advice at an early stage in any potential redundancy situation.
And of course since 1 October 2004, there is a duty to comply with the statutory dismissal procedures--which involve written notice, a meeting with any person who is going to be dismissed for any reason, including redundancy, and right of appeal..
COLLECTIVE REDUNDANCIES NOTIFICATION
Added 13/10/06, link updated 4/5/07. This information updates s.31.2.3 in The Voluntary Sector Legal Handbook 2nd edition.
From 1 October 2006 the rules on collective redundancies changed slightly. Where an employer proposes to make 20 or more employees redundant in a 90-day period, notification must be given to the Secretary of State (through the Redundancy Payments Office) before notice of termination is given to any employee. The notification must be given at least 30 days before the first dismissal takes place if 20-99 employees face redundancy, or 90 days before if more than 100 employees face redundancy. The date of notification is the date on which the Redundancy Payments Office receives the notification.
For further information go to tinyurl.com/mgdk7.
The Collective Redundancies (Amendment) Regulations 2006 are at www.opsi.gov.uk/si/si2006/20062387.htm.
REDUNDANCY COLLECTIVE CONSULTATION
Updated 25/8/05, links updated 14/5/06. This information updates s.31.2.3.1 in The Voluntary Sector Legal Handbook 2nd edition.
Where 20 or more employees at one establishment are to be made redundant within a 90-day period, the employer must consult recognised trade unions or elected employee representatives before the redundancies take place. The definition of "redundant" for these purposes is very wide, and includes any dismissal not directly related to an individual employee's competence or conduct. This could include, for example new working arrangements or restructuring, where employees are in effect dismissed and hired on new contracts.
In a German case, Junk v Kuhnel, the European Court of Justice looked at whether "redundancy" in the context of the consultation rules means the notice of termination, or the termination itself. In a decision on 27 January 2005, the ECJ said that redundancy means the notice to terminate--and that consultation must take place before redundancy notices are issued. This is because the purpose of the consultation is to avoid or minimise redundancies, which realistically is unlikely to happen if notices have already been issued.
Before Junk, the consultation had to start and the DTI had to be notified at least 30 days before the first dismissal took place if 20-99 redundancies were proposed, or 90 days before if 100 or more redundancies were proposed. But as revised guidance issued by the DTI on 16 August 2005 makes clear, consultation now has to be completed before the dismissal notices are issued.
On a related matter, in Hardy v Tourism South East the employment appeal tribunal confirmed on 29 November 2004 that even where the employer is restructuring and proposes to offer alternative work--thus bringing the number of people actually being dismissed to below 20--the duty to consult still applies. This decision has important implications for any employer carrying out a restructuring where more than 20 employees' contracts could be changed. The EAT's decision is at www.bailii.org/uk/cases/UKEAT/2004/0631_04_2911.html. This decision is reflected in the DTI's revised guidance.
For the DTI's Redundancy consultation and notification click here (the address is too long to show on screen).
REDUNDANCY "BUMPING"
Added 25/8/05. This information updates s.31.5 in The Voluntary Sector Legal Handbook 2nd edition.
When an employee is being made redundant, the employer has a duty to offer suitable alternative employment if any is available. "Bumping" is when the redundant employee is offered another person's job--usually someone who has been there a shorter time, or is in a more junior position--and that person is then made redundant. In Lionel Leventhal Ltd v Mr J North, the employment appeal tribunal ruled in October 2004 that the employer's failure to consider whether North, a senior editor, could be bumped into a junior editor's job constituted unfair dismissal. The tribunal said that an employer should not assume that an employee would not be interested in a more junior position, and bumping should be considered in every potential redundancy case. This case is at www.bailii.org/uk/cases/UKEAT/2004/0265_04_2710.html.
In a decision on 5 August 2005, another employment appeal tribunal ruled that a failure to consider bumping does not necessarily make a redundancy dismissal unfair. In particular, if a potentially redundant employee might be willing to take a junior position, the EAT said the employee should make this clear to the employer at an early stage. The decision in Alvis Vickers Ltd v Mr D B Lloyd is at www.bailii.org/uk/cases/UKEAT/2005/0785_04_0508.html.
ONLINE REDUNDANCY PAY CALCULATOR
Added 25/3/03. This information adds to s.31.6.1.7 in The Voluntary Sector Legal Handbook 2nd edition.
In February 2003 the DTI put a redundancy calculator on its website. It is at www.dti.gov.uk/er/redundancy/ready.htm.
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