When is a volunteer not a volunteer?

(Legal bit: the following is not formal legal advice, and should not be relied on as such.  Legal bit over.]

Riddle me this: when is a volunteer not a volunteer?

The answer is of course simple. When they’re not volunteering.

But of course, life is never quite that simple.

So brace yourself, here’s some law to chew over…

Volunteer or Worker

There is no standard legal definition of volunteer, but the Criminal Records Bureaux defined a volunteer as “a person engaged in an activity which involves spending time, unpaid (except for travel and other out of pocket expenses), doing something which aims to benefit some third party other than or in addition to a close relative.”

An employee is defined as “an individual who has entered into or works under… a contract of employment”, where a contract of employment means “a contract of service… express or implied… oral or in writing.” (section 230(1) and (2), Employment Rights Act 1996).

A worker is defined more widely, as an individual who works under either a contract of employment (as above) or any other contract, express or implied, oral or in writing, where the individual performs personally any work or services for another party but is not a client or customer.

There are a number of important factors that need to be present for an individual to be a worker, being that there is personal service; that the “employer” is not a customer; and that there is a mutuality of obligations.

Volunteer Legal Status Ambiguous

BWB Solicitors, leading charity advisors has published guidance about this.

They note that “the legal status of volunteers and interns is not clear cut, as there is a vast range of different types of relationships, from the purely voluntary to those that are clearly contractual and those in between, which are difficult to define. This ambiguity makes it difficult for organisations taking on volunteers and interns to appreciate any legal obligations that they may owe to them.”

 The Practical Law Company have also provided style volunteer agreements, noting that “where the volunteer is not otherwise entitled to the national minimum wage, organisations should limit payment to volunteers to out-of-pocket expenses only, incurred as part of the volunteer role and evidenced by receipts.”

 The National Council for Voluntary Organisations (“NCVO”) also states in its guidance to charities that “paying ‘expenses’ automatically, without justification, can be seen in tribunals as the equivalent of paying a salary. The safest course is to reimburse only actual expenses, preferably against receipts.

A example from a recent Employment Appeal Tribunal case might also help.  Mrs Chaudri did administrative work with the Migrant Advisory Service for two years and claimed unfair dismissal and sex discrimination when her role was terminated.

She worked four mornings a week and was paid volunteer’s “expenses” of £25 (increased to £40) a week, even though she incurred no expenses. She was also paid when on holiday or sick. The Employment Appeal Tribunal found that the payment was clearly for work and not reimbursement.

National Minimum Wage

Employees and workers are entitled to a number of rights which volunteers are not, including the national minimum wage (“NMW”)and annual leave.  Specifically, the National Minimum Wage Act 1998 requires employers to pay the NMW to all ‘workers’.

Volunteers will only be entitled to be paid the NMW if they are workers. Volunteers will not fall within the definition of ‘worker’ only where they have no form of contract of employment or contract to perform work and provide services and where they receive no financial remuneration or benefits in kind for providing their services.

Volunteer workers are a category of worker who work for charities, voluntary organisations, associated fund-raising bodies and statutory bodies. Voluntary workers (as opposed to volunteers) are not entitled to the NMW only if the following conditions are met (S.44(1)(a)&(b) of the National Minimum Wage Act 1998):

  1. They receive no monetary payment other than reimbursement of expenses actually incurred or reasonably estimated as likely to have been incurred in the performance of their duties; and
  2. They receive no benefit in kind other than reasonable subsistence or accommodation.

The consequences for an organisation of failing to pay the NMW to volunteers or interns who are in fact workers and therefore entitled to the NMW are potentially serious. Not only could the organisation be required to pay up to six years of backdated NMW to the workers, but it may be liable for a criminal penalty if it has wilfully neglected to pay the NMW.

Implications for Charities

A volunteer can be seen as a ‘worker’ only where there are a number of factors present, being: personal service, that the “employer” is not a customer, and that there is a mutuality of obligation.

There are a number of practical suggestions given by BWB Solicitors to reduce the risk of volunteers being a classified as ‘workers’.

Firstly, get a volunteer agreement in place confirming that the relationship is based on mutual understanding and is not a contract of services or employment.

Secondly, avoid making payments to volunteers that could be construed as wages, with payments to cover actual expenses being clearly identified as such and ideally reimbursed against receipts.

Conclusion

If you have any questions let me know: bettercharityblog[at]gmail.com or @BetterCharity.

And if you got this far without falling asleep, well done!..

 

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6 thoughts on “When is a volunteer not a volunteer?

  1. John Clarke says:

    I find little of what you say worthy of presentation as ‘new’ given that most of it is (or should be) well known to any competent volunteer manager.

    Further, I find that many of these issues are only likely to arise if your organisation indulges in coercive practices such as the rising recent trend of the ‘volunteer intern’ (for which I read young person exploited on a full-time basis for an unreasonable length of time) or various flavours of work experience/workfare.

    I genuinely believe that if you engage volunteers for the right reasons, taking on people who are keen to donate their time to your cause and give them a meaningful role to make a contribution you will always do well. Of course, a big part of this is to treat them with respect and dignity whilst following best practice advice such as only reimbursing out-of-pocket expenses, and not initiating any overly formal working contracts or obligations.

    As for describing Bates Wells & Braithwaite Solicitors as ‘leading charity advisors’, I must protest. This is a firm which recently suggested that volunteers should be denied formal rights because, “…if a volunteer is discriminated against, they can leave and volunteer for another charity…” This kind of offensive and uninformed advice is something I could well do without.

  2. Hi John,

    Thaks for the interesting perspective. Really appreciated.

    This post was written in response to a recent question raised about the distinction between volunteers and workers – you’re right that none of it is especially ‘new’ (I don’t think I was claiming that?), but I’m just trying to help smaller charities by sharing my experiences and hopefully some helpful information!

    I’m sure you are a very competent volunteer manager, and I’m sure many people will have no issues with their volunteers, but this is a post designed to help smaller charities in a potentially problematic area.

    Indeed, there have been some interesting employment cases recently where volunteers have tried to argue they are workers, so its not just a theoretical issue for charities.

    I would agree that charities should treat their volunteers honourably and fairly, and that’s what I’ve tried to suggest in this post.

    BWB are listed in the top tier for charity law of both of the major legal rating websites, Legal 500 and Chambers UK, so objectively I think calling them ‘leading’ is fair, although there are of course other very good law firms for charity advice.

    I’m understand you have strong feelings about these issues, but thanks for the comments – it’s alway good to dialogue!

    All the best,

    Andrew

  3. Tim says:

    I read your article with interest as I am trying to understand the difference between a worker and a volunteer. Does the above apply only to Charities or can a Limited Company use volunteers without having to comply with NMW?

    • Thanks Tim, great question.

      The National Minimum Wage Act 1998 and the National Minimum Wage Regulations 1999 require employers to pay the National Minimum Wage (“NMW”) to all workers, with certain exceptions, including ‘voluntary workers’.

      For the purposes of the NMW, ‘voluntary workers’ are defined as those individuals who work for charities, voluntary organisations, associated fund-raising bodies and statutory bodies.

      Volunteer workers therefore cannot by definition work for private for-profit companies; any workers who are working for for-profit companies will generally be entitled to the NMW.

      Hope that helps,

      Andrew

      • Tim says:

        Thanks for your reply. The company I am concerned for operates outdoor adventure holidays around the world with goal of promoting Christian faith through its evening Bible teaching and uses volunteers to staff the holidays. Could the company in question be exempt under either sec 44 as a “voluntary organisation” using volunteers for benevolent or philanthropic purposes, although not a charity, or sec 44A “Religious and other communities: resident workers” where the purpose is to practice and advance belief of a religious nature?

      • Tim, I’d suggest that we take this discussion offline. Why don’t you email me at: andrewkmackay[@]gmail.com and we can explore this question further? Cheers, Andrew

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