Due to the important distinctions between the CJRS and the New Scheme, charity employers' hands will be forced to some extent, in that from 1 November 2020 it will be necessary to bring staff back to work in some capacity to access the New Scheme. For charities with staff in positions that have become unviable over the course of the pandemic, regrettably now may be the time to make difficult strategic staffing decisions.
Workforce planning exercises may include making voluntary and/or compulsory redundancies, restructures or changing terms and conditions of employment. Depending on the circumstances, any or all of these options might be appropriate, and careful planning will be necessary in order to develop a business case to support the particular action your charity proposes to take.
Avoiding Compulsory Redundancies
There is much in the press at the moment about the rise in redundancies as we near the end of the CJRS. Given the economic climate and wider impact of the pandemic on the UK economy as a whole, employers including charities may be understandably reluctant to make staff redundant.
Before determining a course of action, it may be sensible to consider alternatives to making compulsory redundancies. For example, it may be possible to agree to reduce staff hours and/or pay in order to achieve a cost saving whilst at the same time avoiding making redundancies. It may also be possible to redeploy staff whose roles have become unviable so that they can work in busier areas of the charity either on a temporary or a permanent basis.
If redundancies cannot be avoided, then again charities may wish to consider whether there is scope to agree voluntary instead of compulsory redundancies. If so, charities will need to take care to ensure any voluntary package they offer staff complies with wider charity law requirements on severance payments and complies with the duty to act in the best interests of the charity and its beneficiaries at all times.
In particular, where a charity wishes to make a non-contractual, non-statutory payment (such as a discretionary enhanced voluntary redundancy payment) to staff as part of a workforce planning exercise, legal advice should be sought on whether the proposed payments can be approved by the Trustees or could be challenged by the Charity Commission as being an inappropriate use of charitable funds.
There is now one month before the CJRS closes on 31 October 2020 in order to make way for the New Scheme. If your charity is planning a consultation exercise, there is now a limited window to run that process whilst the CJRS remains in operation. In addition, for larger charity employers, it is also necessary to take into account collective consultation requirements, which apply as follows:
- where there are between 20 and 99
redundancies, consultation must start at least 30 days before the
first dismissals take effect (and ideally 30 days before notice of
redundancy is given) and
- where there are 100 or more redundancies, consultation must start at least 45 days before any dismissals take effect (and ideally 45 days before notice of redundancy is given)
If collective consultation is required, this should take place with a trade union, or if no trade union is recognised, elected employee representatives. We are seeing increasing union activity within the charity sector, including requests for union recognition. It may be appropriate to consider such requests and engage with unions about the charity's financial position in order to encourage a collaborative approach.
It is possible to use the CJRS whilst staff are working out their notice, or taking part in a redundancy consultation. However, any redundancy payment must be financed by the charity itself and not as part of a claim under the CJRS.
In the event your charity's consultation exercise extends beyond 31 October 2020, the rules will be different. It will not be possible to place affected staff on the New Scheme, whilst at the same time making them redundant or giving them notice of redundancy. Affected staff will therefore need to be brought back to work at the end of the CJRS in order for any consultation exercise to conclude and/or in order to work out their notice.
As we now know what governmental support will follow the closure of the CJRS, time is now of the essence to make strategic staffing decisions swiftly and to plan any workforce planning activity in a way that ensuresthe charity's best interests are protected.
Originally published by Veale Wasbrough Vizards, October 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.