Employment Law Essentials for Charities in the UK | LegalDocuments.co.uk

Overview

Employment law for charities is the set of statutory rights, common law duties and regulatory obligations that govern the relationship between a charity (as employer) and the people it pays to work for it. The key statutes include the Employment Rights Act 1996, the Equality Act 2010, the National Minimum Wage Act 1998, the Working Time Regulations 1998 and various pieces of secondary legislation covering areas like family leave, pensions auto-enrolment and whistleblowing.

A common misconception is that charities get some kind of special pass because of their charitable status. They do not. If your charity has paid staff, it is an employer in the eyes of the law, with the same responsibilities as a commercial business of the same size.

Volunteers sit in a separate category, they are generally not employees and are not covered by most employment rights, but the line between a volunteer and a worker can be surprisingly thin, and getting it wrong can expose the charity to back pay claims and tribunal risk. Trustees also have fiduciary duties to the charity itself, which can complicate employment decisions that most businesses would make routinely.

Key steps

1. Get recruitment right from the outset. Write job descriptions and person specifications that focus on the genuine requirements of the role. Avoid language that could indirectly discriminate, use structured interviews with consistent scoring, and keep notes. The Equality Act protects candidates from discrimination on grounds including age, disability, race, sex, religion, sexual orientation, gender reassignment, marriage, pregnancy and maternity. Be particularly careful with questions about health or family plans, these can land you in tribunal.
2. Issue a written statement of employment particulars on day one. Every employee and worker is entitled to a written statement covering pay, hours, holiday, notice, job title, place of work and other core terms from their first day. For charities, I'd go further and use a proper employment contract that also addresses confidentiality, conflicts of interest (particularly important given charity governance), probation, and what happens if funding for the post ends. Ambiguity in contracts is where most disputes start.
3. Manage working time, pay and leave correctly. Pay at least the National Minimum Wage or National Living Wage for the employee's age band, check the current rates on gov.uk, as they change each April. Respect the 48-hour weekly working time limit unless the employee has validly opted out, provide statutory rest breaks, and give at least 5.6 weeks of paid annual leave pro-rated for part-time staff. Keep accurate records; HMRC enforces minimum wage compliance and the penalties are significant.
4. Handle performance, conduct and grievances through a proper process. Adopt disciplinary and grievance procedures that follow the Acas Code of Practice. That means written allegations, a fair hearing, the right to be accompanied, a reasoned decision and a right of appeal. Trustees sometimes want to move fast when there's a problem, understandable, but skipping steps is how charities end up facing unfair dismissal claims with uplifts of up to 25% for failing to follow the Code.
5. End employment lawfully and thoughtfully. Employees with two years' service have protection against unfair dismissal, and some dismissals (for example, related to pregnancy, whistleblowing or discrimination) are unfair from day one. Redundancy requires a genuine redundancy situation, fair selection, consultation and, where 20 or more roles are affected, collective consultation duties. Charities facing funding cuts frequently get redundancy wrong because the trustees underestimate how structured the process needs to be.

Common questions