Is your charity making a good job of employment law?

Third Sector Promotion Ansvar

It’s all too easy for charities to trip up over the complex business of Employment Practices Liability (EPL). Sarah Cox, Managing Director of Ansvar Insurance, explains why – and what you can do about it.

In many ways, a charity is a business like any other. The moment you engage directors and staff, you enter the complex and ever-changing world of employment law. Everything from paternity leave to harassment needs to be carefully and professionally managed. For charities, having trustees and volunteers in the mix adds an extra twist.

With many charities being run by small teams simply looking to impart some good to the world, it can be overwhelming once they realise just how many laws and regulations they must comply with simply to be able to help those who need it.

Good employment practices are crucial to the success of a charity. Without your people, you don’t have an effective charity. While most people know little about areas of law like conveyancing and probate, they tend to be much more clued up about their rights as an employee. Which means you can end up in litigation faster than you can say discrimination grievance.

The consequences for your charity can be costly and time-consuming – and not just in staff time and legal fees. Being dragged through courts, tribunals and the press can damage your reputation and have a knock-on effect on donation income. If it’s serious enough, the future of the organisation could even be at risk.

So what can you do?

A good first step is to make sure every employee understands their role, the terms of their contract and what’s expected of them, right from the word go. And make sure you stick to what their contract stipulates! If the nature of their role changes, ensure this is reflected in their contract. It pays to invest in clear contracts and policies, expert training and a comprehensive handbook that covers everything they need to know. 

It doesn’t always go without saying

Never assume. For instance, it may seem obvious to you what discrimination is. But if it happens in your organisation and nothing has been done to define and prevent it, your charity may find itself on the wrong side of a claim. On the other hand, if your staff and volunteers have been trained to understand exactly what’s acceptable in the workplace and what isn’t, you have happier people – and a stronger defence if things go wrong.

Prevention is always better than cure

Proper training goes a long way when it comes to prevention, especially for sensitive areas such as whistleblowing. The law protects employees who speak out to expose what they see as wrongdoing. Once the issue has been raised, it’s vital the employee isn’t penalised for having done so, or more legal action can follow. Staff need to be very clear about how to navigate potential minefields like this.

It’s a question of good practice

Having strong HR practices in place is essential. It’s also important to have a system for dealing with any disputes quickly and effectively. It is especially easy for a small team of people who work well together, to think you’ll never need to deal with this but it’s not unheard of for trustees to claim against each other over a dispute in the boardroom, and the risk will only increase as your charity (hopefully!) grows.

With a good internal dispute-handling system in place, you can prevent issues escalating and ending up in court – and the public eye.

It’s worth remembering that if donors become aware of damaging claims against your charity the fallout for your reputation could discourage further donations. So you could be dealing with double trouble. 

The sooner the better

Getting good HR and legal advice early on can save a great deal of heartache and money in the long run. Small charities are especially at risk: with smaller, fragile budgets, HR is often the last thing they add or the first thing to go, which can be a big mistake.

Scrimping on human resources can prove a false economy. The task of managing a charity’s workforce is a complex one; there are often staff, volunteers and trustees, each with their own rights and needs. It can be a real minefield, and not one you can just ‘muddle through and figure out.’ You need professional advice and guidance to ensure you have covered everything you need.

If you can’t afford to have the expertise you need to manage employment issues in-house, it pays to outsource. Experts can help you get the HR systems you need in place – and provide legal guidance if things go wrong – to help prevent a situation escalating. 

You might also want to consider Employment Practices Liability insurance to help cover the legal costs of handling employee grievances. A good specialist broker can advise you on the best choice for your needs.

It’s easy to let employment practices slide when you’re focused on the pressing job of pursuing your charity’s mission. But it’s worth the investment. A sound and happy ship is much better at weathering storms.

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