waiving rights to redundancy pay

katy1000

Hi, Iv just taken over as Chair of our local pre-school committee. It has become apparent that the finances are in pretty poor state. We have the statutory amount in 1 account to cover redundancy. up to now this money has been ring fenced. As we don't have enough money to cover all of the outgoings the staff have agreed to sign a document stating that they will waiver there rights to this money. We can then use this money to finance the pre-school. We are getting conflicting advice so thought i would ask here. Any help will be gratefully received.

getmore4less

Redundacy payments are a statutory right based on service I don't think you can waive that.

Get them all to resign and have a break of at least a week to break continuity of employment.

Funding and outgoings are your issue.

cr1mson

I think you need specialist advice is the preschool a member of the SPPA or the English equivalent? If so I would contact them.

My understanding is that no you cannot waiver rights to statutory redundancy.

However confused why you need to ring fence the amount in a separate account? Not aware that there is a legal requirement to do this or is it in your constitution? If not don't see the need for employees to sign a waiver anyway. You just transfer make it available into the normal funds and if redundancies occur then you cross that bridge when you come to it.

And re the resigning and remploying as an employee I would not be happy to do that as would lose other rights aswell as redundancy.

C

Andy_L

If a business collapes then statuatory redundancy is paid by the taxpayer so there's no need to keep that money ring fenced.

Since things are so bad that you're looking to spend capital on outgoings then the writing is on the wall & they should be looking elsewhere already

getmore4less

I did read somewhere(I think here or may have been the fool) that some organizations the officers are directly responsible for debts.

That why it really important to check the terms of the posts when you take them on.

Jarndyce

katy1000 wrote: »

Hi, Iv just taken over as Chair of our local pre-school committee. It has become apparent that the finances are in pretty poor state. We have the statutory amount in 1 account to cover redundancy. up to now this money has been ring fenced. As we don't have enough money to cover all of the outgoings the staff have agreed to sign a document stating that they will waiver there rights to this money. We can then use this money to finance the pre-school. We are getting conflicting advice so thought i would ask here. Any help will be gratefully received.

It is not possible for an employee to 'sign away' a ststutory right. Any such document would be null and void.

SarEl

getmore4less wrote: »

I did read somewhere(I think here or may have been the fool) that some organizations the officers are directly responsible for debts.

That why it really important to check the terms of the posts when you take them on.

In any organisation, trading whilst insolvent is an offence (and that means conducting your normal business when you know you cannot meet your bills and legal liabilities). In an unincorporated organisation (and yes, you read it here - pretty sure I have posted this a few times on here) then you are personally liable for the debts.

Do not touch your redundancy reserve. If you cannot continue to fund your day to day activities the call in your authorising body (whether that be a national association, the Charity Commission, or your members), tell them and if necessary wind up and make your staff redundant. You cannot lawfully get them to waive their rights to their legal entitlement - but the more pertinant question is why would you want to? No amount of "good works" on your part excuses being appalling employers. Principles start at hiome.

getmore4less

How about this.

If they are prepared to forgo redundancy(which they can't) get them to forgo equivilent wages(or donate them to the cause) now if they believe that will save their jobs

Jarndyce

getmore4less wrote: »

How about this.

If they are prepared to forgo redundancy(which they can't) get them to forgo equivilent wages(or donate them to the cause) now if they believe that will save their jobs

That would still be unlawful if it meant that they were paid less than the NMW for that period. The only way of raising the equivalent amount of money would be to ask for donations. But why are employees being asked to make this sacrifice? Why not the parents of the children for whom the service exists?

I'm sorry but SarEl's advice is the only responsible way forward without leaving yourself open to even more liabilities.

mancitychick

I used to be a committee member of a playgroup. The playgroup had to close due to lack of funds, it was during the closing down process we learnt that we as committee members were personally liable for any debts incurred, including redundancy payments.

katy1000

Thank you every one who has replied. As trustee's of the business we are personally responsible for the redundancy of the staff. We are all aware of this. We have a committee meeting on Tuesday where once explained to the committee we wont be spending the redundancy money. We can try cutting back and have other options we can try yet. we are in a rural location and it would be such a shame if it shut. Its been here for 40 yrs. We are not trying to be awful employers. iv only been doing this for 1 month and have been trying to move things along. Waiving the rights was an idea of the staff and what they where prepared to do to keep our pre-school open. We are rural and a very close community. No one is trying to get anyone to give up anything. I do agree, its their right they worked for it and they should have it.
Just to clarify, if i know there is not enough money to pay December's bills am i breaking the law. We can cut back on staff ect but i dont know if it will be enough. We have a massive advertising campaign going (massive as it gets in a village and surrounding area) to try and get more children to sign up with us. We don't know if it will work but im not prepared to give up without even trying to save it. If it fails then it fails but at least we will have tried. Thanks for the answers everyone. I could well be back for more advice!