When is a Volunteer not a Volunteer?

Why is this an issue?

A “true” volunteer is someone who does not have worker or employee status, and thus no obligation to receive or benefit from things like:

• Pay;
• National Minimum Wage (“NMW”); or
• Statutory obligations like:
  • sick pay,
  • holiday pay, etc.

If the relationship is not a voluntary one within the law, that person or people may be entitled to several such legal rights, most importantly, of course, the National Minimum Wage (NMW).

If you have people working in your organisation who you consider to be volunteers and who are not being paid as a result, it is vital that you understand and implement the correct system and terms to avoid mistakenly creating very costly legal obligations and breaches of the same.

What is a true volunteer?

There is no simple statutory definition.

We can find a definition in the Police Act 1997 (Criminal Records) Regulations 2002 (legislation used to check criminal records) 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"

The Department for Trade and Business has produced guidance which describes a volunteer as someone who:

• Has an arrangement with an organisation which does not entitle them to a financial reward or benefit in kind for work they perform under the arrangement.
• Does not have to turn up for work if they do not want to (even if they are expected to or they generally work to a regular pattern).
• Cannot be dismissed, sued for breach of contract or have payment or reward withheld if they fail to do the work or perform the services they were providing.

Key factors in all the legal tests are whether there is a contract between the parties; an intention to create legal relations and then, how that actually works in reality and the court will look at both.

What do employers need to know?

Where the relationship has been described as voluntary, but this is incorrect, this opens up the organisation to potential claims of many different types, including:

• Unfair dismissal
• Discrimination
• Failure to pay the National Minimum Wage
• Holiday pay and more

It is, therefore, very important if your business uses voluntary staff, that you understand this legal status and the ramifications of getting it wrong.

Tips to avoid creating a legally binding relationship:

• Avoid making any payments for their services – only actual expenses should be paid, and these should be clearly identified and ideally reimbursed against receipts. They MUST represent actual expenses incurred, and not be some sort of allowance towards potential costs.
  
  
• Minimise any “perks” which could be seen as being compensation for the agreement.
  
  
• Reduce obligations on your volunteers, giving them real choices about what tasks they do, and when.
  
  
• Avoid using “contractual” language – especially avoid referring to them as workers or employees or using similar language to your employment contracts.
  
  
• Ideally try to have different policies and documents for volunteers, covering the basics necessary, but not moving further than necessary and treating them as employees.
  
  

Key Pitfalls to be aware of

The biggest pitfalls are when organisations try to make volunteering appealing by offering incentives and/or requiring the volunteers to do certain things, creating mutual obligations and thus tipping the arrangement into a contractual one.

Voluntary Worker status

If you are a charitable organisation, you may need to use a subset of worker – the “voluntary worker” as you may find that the control required over your volunteers to function as a business means that they are not, in fact, true volunteers.

Voluntary staff being rostered on a Rota and required to turn up and do the agreed tasks on those days, for example, may be necessary in order to function but is likely to move away from the true volunteer status.

A charity shop, for example, may require volunteers to attend on certain days and times, in order to be able to run the business effectively.

A “true” volunteer would not be bound to attend on certain days and times, so this means that this sort of arrangement is in danger of becoming a worker arrangement, and thus requires the full National Minimum Wage, which would not be sustainable.

S44 of the National Minimum Wage Act 1998 therefore created the voluntary worker status to allow such arrangements to be operated.

Charity shops may have both true volunteers – who turn up when they feel like it and are simply slotted into the existing arrangements – and voluntary workers, who agree to work certain times and undertake certain tasks, enabling the shop to be reliably open and operate effectively.

A voluntary worker is not a volunteer in the normal or legal sense of the word.  A voluntary worker does not work voluntarily but is under a contractual obligation to provide the services for which they are engaged. 

To be a voluntary worker, they must be:

• Unpaid
• Providing services to a charity, voluntary organisation, associated fundraising body or statutory body

They will:

• Have a contract with mutual obligations – such as assigned to a particular shift or duty;
• Have possible subsistence expenses and/or training to carry out their duties – but no further than required and not to the extent that it becomes “pay”;
• Not be paid “wages” and do not qualify for the NMW;
• Not qualify for employment law protections;

If you are uncertain about the status of your staff, we highly recommend contacting us for a free review: enquiries@bridgeehr.co.uk.

The longer an arrangement continues which is incorrectly labelled, the bigger the ramifications are likely to be should this be challenged in law.