Charity Redundancies - HELP!

I have fairly recently taken on the directorship of a national charity. However, I am very green in the area of employment and certainly know nothing about redundancy. We can no longer afford to pay our key member of staff for the number of hours he is currently doing. He does our accounting, has worked this out and informed us of this himself. He has suggested that we need to make him redundant and then after a certain period re-employ him on shorter hours that we can afford. He is totally trust worthy and knows more about these matters than I do.

I really need some help. Is this legal? I don't even know how to word a redundancy letter! Naturally we can't afford to pay for help therefore any help I can get for free will be gratefully received!

If he's happy to work shorter hours you don't need to (and shouldn't) make him redundant. You'd have to leave a significant gap if you were to reemploy him otherwise HMRC may take a dim view of any redundancy payments you have made.

I'd suggest you simply reduce his hours, if he's happy to do that as it sounds as though he is. Unless you want to make him redundant because you don't need anyone at all for a few months there is no need to do so.

You need to write to him saying that you can no longer afford a full time person therefore propose to reduce his hours to x, and reduce his pay to reflect the new hours. You should say that if he does not want to accept the proposed reduction, he can opt to take redundancy instead, then tell him what the redundancy payment would be should he choose to take that option. Make it clear that if he opts for redundancy that will be a permanent decision, you will not be looking to reemploy him at a later date. You should offer him a few days to consider which option he wishes to take, and also offer him a consultation meeting to discuss it at which he can be accompanied by a colleague or a union rep if he has one, which I doubt.

if he takes redundancy you will need to give him whatever his notice period is, or statutory notice if that's longer, and you can ask him to work it or not.

You are happy that he is trustworthy, which is good. If you were not convinced he is trustworthy I would be suggesting there's a possibility he's taking advantage of your lack of knowledge by suggesting you need to make him redundant first in order to reduce his hours, thereby ensuring he gets a redundancy payment and keeps a job. As you believe he is trustworthy we'll give him the benefit of the doubt and assume he just doesn't know.

Thanks for your help.

This is really complicated. Our employee is naturally part of our leadership team. He IS totally trustworthy and knows more about these things than I do as I've said but he's said redundancy is the best option for him. He is late fifties and has cronic lukemia which makes it necessary for him to pay off his mortgage asap which is why he says that for him to just accept less hours isn't really in his best interests.

We don't want to loose him. He is an invaluable member of our team.

We would make him redundant and the payout would cover him for the couple of months that he would not work which also happen to be our quiet time. He would still do some work during this time but it would be on a voluntary basis.

I appreciate your advice.

"he's said redundancy is the best option for him"

That's slightly different. Your first post implied he'd told you you had to make him redundant then reemploy him, but if he's said it's just that redundancy then reemployment would be better for him, then yes he's right, of course it would.

Doing that will cost you more but if you want to do that to benefit him, then of course you can do so.

However if the payout would cover him for a couple of months and he would continue to work during that time on a 'voluntary' basis how would that be different to keeping him on on a paid basis? I mean what would be the point?

If you do make him redundant he can't continue to work on a 'voluntary' basis then be reemployed again as his redundancy would clearly not be genuine, and HMRC would take a very dim view of any 'redundancy' payment you made to him, as it would say you should have kept him on and he should have paid tax on that money.

The best option for you would be to offer him either reduced hours and keep him employed or redundancy with a clean break as an alternative and if you want to reemploy him in a few months do so.