Not within a MAT, but I have done similar work in charities.

The subsidiary company is a wholly-owned but otherwise independent entity which means that contractual relationships are with the company, not with the charity and, yes, that means that Ts&Cs can (and sometimes should) be different. For example, you may need the company to work on different hours to the MAT (unlikely to be much TTO business in a commercial enterprise, after all), and you may want to offer something like performance-related pay, bonuses or other rewards for exceeding commercial targets, depending on the nature of the business.

It is important at the outset to recognize that the commercial subsidiary business has the objective of making a profit, whereas the owning business does not. This presents two dilemmas: the first is the cultural one - an institution seeking to make a profit makes its decisions on very different grounds to an NPO, which can create tension between the leaders of the business and the leaders of the charity. It is a good idea to clear up where decision-making authority lies and to set ground rules on the constraints you intend to place on the business leaders. The second is more technical: charities are naturally constrained in the extent to which they turn a profit and the use to which such profits are put, so you need to make sure that the necessary infrastructure is in place to ensure that both organizations can continue to be legally run. This will mean some Chinese walls and some structural distinctions (the obvious one being separate bank accounts, but less obvious ones will pertain to the degree of access the owning charity has to the bank accounts of the subsidiary business).

Otherwise, a well-run commercial subsidiary can be a terrific asset to a charity. I wish you the best of luck!

In reply to Robey:

Many thanks, this is really helpful. The one T&C which will probably be different is pension (LGPS is a great benefit but high cost). Other than staff noticing a difference (which can create engagement issues sometimes) as long as we are not discriminating we can do this, I think.

In reply to Isabel Stirling:

Yes, absolutely you can. The issues of engagement can be addressed through simple transparency - making it clear who works for whom and that different Ts&Cs apply to each. That way, no one should be surprised.