Ben Doherty on why social care charities need to be careful they don't fall foul of employment law
The tough financial landscape for social care charities has intensified their need to tread carefully when it comes to employment law.
Get it wrong on a host of topical issues – from minimum wage to transferring care contracts – and the consequences could be grave.
These go beyond legal penalties and costs; they can also impact charities’ reputation and ability to win contracts, and ultimately their sustainability.
Get it wrong on a host of topical issues – from minimum wage to transferring care contracts – and the consequences could be grave.
Ben Doherty
National Living Wage
The usual focus on wages is financial – how can social care charities afford to pay National Living Wage or Scottish Living Wage when their finances are already stretched? But just as important as considering the strategic picture is to navigate the intricacies of minimum wage, living wage, and what does or does not constitute working time.
It cannot be over stressed just how fluid an area of law of this is, with Employment Tribunal cases continually highlighting the complexities around wages for staff on standby, sleeping in, or on rest breaks.
Taking over contracts
Another employment law issue for charities to grapple with is TUPE (Transfer of Undertakings (Protection of Employment) Regulations) which protect employees’ terms and conditions of employment when an organisation or service provision changes hands.
In the current climate – with numerous social care providers handing back contracts to councils and others tendering to take them over – this is more relevant than ever. It’s critical that charities understand which transfers and employees are covered by TUPE and their obligations around notice and information provision.
Consider the wider context
On both issues – living wage and TUPE – our own experiences of advising social care charities emphasise the importance of seeing the bigger picture when handling the legal issues. Depending on the circumstances, this wider context could include their reputation, HR policies, or negotiating strength with councils or NHS trusts.
Take contract transfers from one care provider to another. Traditionally, councils and NHS trusts have not been prepared to consider warranty and indemnity protection for the new care provider, leaving them exposed to financial and legal risks around employer liability.
However, some councils - especially in rural areas – now have a dwindling choice of care providers. As a result, the respective bargaining positions have changed, and charities may be better positioned to seek warranty and indemnity protection. The more providers that ask for this in contract negotiations, the stronger their collective position.
Or take the living wage. The requirement to pay Scottish Living Wage to adult workers in social care has, in some cases, removed the pay differential between providers’ lowest paid workers and the next tier up.
Employers therefore have a dilemma – should they raise the pay of all workers to retain the differential (perhaps making their pay costs unsustainable)? Or should they do the legal minimum but risk resentment among the higher tiers, or remove the incentive for promotion? Thus, the legal requirements provoke wider ripples around HR policy.
The lessons to learn
The lessons for charities are threefold. First, when resources are tight and the financial environment difficult, it’s more important than ever to pay attention to employment law and seek advice.
Secondly, don’t consider employment law in isolation. Its links into reputation, HR management, and contract negotiations mean it is best integrated with all other aspects of governance and strategy.
And thirdly, don’t just look on employment law as an obligation, but as an opportunity. Good practice on employment practices and contract negotiations could improve your recruitment and retention rates and your long-term financial position. Beware of false economies on this.
Ben Doherty is partner and head of employment at Lindsays
