Tribunal ruling to cost charity £250,000

Wednesday, 02 March 2011 00:00

Both organisations had applied for funding from Darlington Borough Council to ensure that their facilities could remain open. The 700 Club were successful and the Salvation Army were forced to close their service.

But the 700 Club were obliged, under the Transfer of Undertakings ('TUPE') Regulations, to either retain the 18 staff currently employed by the Salvation Army or pay their redundancy costs. TUPE protects the terms and conditions of employees when a business is transferred from one owner to another.

The contract with the Council is worth £190,000, significantly less than the organisation had previously been receiving to provide the same service.  A spokesperson for the charity confirmed that they would have to consider cutting their own 27 staff to cover the costs of making the Salvation Army staff redundant.  A further hearing will take place this month to decide how much the charity will have to pay to the Salvation Army employees.

This case highlights the need for charities to consider all legal aspects when making decisions concerning funding. Our specialist charity and employment lawyers are able to give advice on all matters relating to transfers and tenders such as these.