Ensuring volunteers don't become employees - as Published in Charity Finance


4 mins

Posted on 11 Jul 2016

The employment status of volunteers has once again become a hot topic after the former National Chairman for the Federation of Small Businesses (FSB), John Allan, claimed that he lost his voluntary position over false allegations of inappropriate conduct. According to press reports, Mr Allan is planning to take the FSB to an employment tribunal for unfair dismissal. It is understood that his voluntary position came with a £55,000 honorarium. While we are not privy to the facts in Mr Allan’s matter, it does serve to illustrate the types of issues that charities and other not for profit organisations need to consider to avoid inadvertently giving employment and wider workers’ rights to their volunteers. To pursue his unfair dismissal claim, Mr Allan will need to demonstrate that he was an employee with a minimum of two years’ continuous service.

Every day, charities rely heavily on the generosity of volunteers to deliver their services. Indeed, it has been estimated that over 90 per cent of charities are run solely by volunteers. However, charities need to ensure that such relationships are entirely voluntary, otherwise they could easily find themselves in front of an employment tribunal on the basis that the individual is in fact classed as an employee, a worker or “in employment” for discrimination purposes. True volunteers are currently outside the principal protections offered by unfair dismissal and anti-discrimination legislation. 

In most cases the employment status of an individual will be obvious. However grey areas emerge when charities start to impose obligations on and/or provide rewards to their volunteers in return for them providing their services. The imposition of mutual obligations points towards the formation of a contract under which work is performed, which is the foundation stone of all employment and workers’ rights. The difference between whether it is an employment or workers’ contract will largely be determined by the level of control exercised by the charity and the level of integration.

The lack of clarity is not helped by the fact that there is no statutory definition of what a volunteer is under the main employment and workers’ legislation. The only legal definition of what a volunteer is, is contained in the Police Act 1997 (Criminal Records) Regulations 2002. This definition nevertheless highlights two crucial elements:

  1.  That the activity is unpaid (except for travel or out of pocket expenses); and
  2.  That the activity has some form of public benefit.

As such, there are a number of practical steps that organisations can take to minimise the risk of a volunteer acquiring employment, worker or discrimination rights: 

  1.  The charity must ensure that there is no intention to create a legally binding contract with their volunteers. All services should be provided on the basis of good will or honour only. It is nevertheless good practice to capture the flexible nature of this relationship in writing. This does not prohibit charities from imposing requirements which are otherwise required by statute, such as vetting and safeguarding in respect to work with children or vulnerable adults and/or dealing with an individual’s data protection or safeguarding their health and safety.
  •  Only genuine out of pocket expenses should be reimbursed. There should be no financial incentive provided in return for the volunteer’s services. In one case, the payment of very modest “expenses” was sufficient to be considered payment for work done as they were not by way of reimbursement and as a result the individual was deemed to be an employee. If Mr Allan pursues his claim he will rely on his substitutional honorarium to support his claim that this is in fact a salary in return for his services and as such he has employment rights;
  •  The charity needs to carefully review any ‘perks’ offered to volunteers, such as discounts/subsidies, and/or the offer of training that is not necessary for the volunteer’s role and should remove these; and
  •  The charity needs to maintain an active distinction between volunteers and its employees. This means having separate policies in place to deal with volunteers, which are consistent with the flexible arrangements between the volunteer and the charity. In particular, volunteers should not be subject to disciplinary processes. 
  • Volunteers provide an invaluable service for which charities and the wider public they serve are hugely appreciative. However, charities and volunteers need to ensure that this remains an honourable arrangement and does not unintentionally give rise to legal rights and obligations. 

    This article, written by David Evans, was originally published in Charity Finance at  http://www.civilsociety.co.uk/finance/indepth/technical_briefing/content/21971/ensuring_volunteers_dont_become_employees

    The articles published on this website, current at the date of publication, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your own circumstances should always be sought separately before taking any action.