There are legal rules you must follow if you’re making staff redundant. If you’re planning to make 20 or more employees redundant within 90 days, you must follow ‘collective consultation’ rules.
You must give employees the statutory notice period based on how long they've worked for you. However, your employment contracts might include a longer notice period.
You must allow staff a reasonable amount of time off to look for another job or do training if they've worked for you for two full years (including the notice period). You should consider how this may affect your team’s capacity to carry out your closure plan.
You must inform HMRC immediately if you’re closing. You’ll need to submit a final payroll return and make sure all expenses and benefits have been completed.
It may be possible for staff to transfer to another charity. For example, with agreement of a funder, activities and the staff paid from their funding could be delivered by a like-minded organisation.
When transferring employment there are legal rules you need to follow. These are commonly known as TUPE. TUPE stands for Transfer of Undertakings (Protection of Employment). TUPE ensures continuity of service and the terms and conditions of employment of transferring employees are maintained.
There are also rules which apply if the employer is insolvent. When the employer is insolvent, employment rights and liabilities don’t transfer under TUPE. Employees also aren’t protected against dismissal connected to the transfer.
Read the ACAS guidance on TUPE transfers.
All employers must auto-enrol eligible employees into a pension scheme. The situation can vary if your organisation is insolvent, if you have a defined benefit scheme or a trust-based scheme. Always seek additional advice from your pension provider.
Most commonly individuals are enrolled in a defined contribution pension. This is where their retirement income depends on how much money has been contributed and the performance of those investments.
Defined contribution pension money is held by a provider. You’ll need to contact them to stop your organisation's contributions and provide information to relevant members of the scheme.
While there’s no legal obligation to provide a reference for an employee, the closure of your organisation may cause inconvenience for staff as they take on new roles.
You may want to consider issuing a standard letter per staff member. Any open letter (ie addressed ‘To Whom It May Concern’) should be brief with factual information confirming:
Staff members may consider acting as a professional referee for a former colleague. However, they must be cautious not to share confidential information previously held by the charity.
For example, a former chief executive may offer to be a referee for a former staff member. In this case, your organisation shouldn’t aid or authorise sharing of confidential information on its former staff. This could include health data, disciplinary processes or safeguarding issues.
Read our closure guidance on what to do if your charity holds data.
All staff assets, such as laptops, remain property of the charity.
You should be very cautious of disposing of a charity’s assets in any way which may be seen as unethical.
You should also make sure all assets of the organisation are returned and disposed of before closure.
Read our closure guidance on what to do if your organisation has physical assets.
Last reviewed: 07 July 2023
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