Volunteers and employees play an integral role in the charitable and not-for-profit (NFP) sector in Australia. As a member of a charity’s governing body, you need a thorough understanding of which category of a person undertaking work for charity fits into. In this insight, we look at the distinction between employee and volunteer and what different legal obligations and entitlements apply.
Firstly, who is a volunteer?
Volunteering Australia provides the following non-legal definition of a volunteer as a person whose ‘time [is] willingly given for the common good and without [expectation of] financial gain.’ More typically, a volunteer is defined as an individual who carries out work without the expectation of, or legal requirement of, payment or reward. The Fair Work Ombudsman (FWO) has identified the following characteristics of a genuine volunteering arrangement:
- a volunteer is someone who does work for the main purpose of benefiting someone else
- the organisation and individual did not intend to create a legally binding employment relationship
- a volunteer is under no obligation to attend the workplace or perform work, and
- a volunteer doesn’t expect to be paid for their work
The FWO has also determined an employee’s ongoing working relationship, by the following indicators:
- performs ongoing work under the control, direction and supervision of the employer and is paid for the time worked
- must perform the duties of their position and usually as an ongoing expectation of work
- work hours set by the employer, an enterprise agreement or modern award
- paid regularly (for example weekly, monthly or fortnightly)
What are the different legal entitlements owed to volunteers and employees?
As a responsible person for a charity you need to be aware of the different legal entitlements owed to employees and volunteers and take reasonable steps to ensure your organisation manages its staff and volunteers accordingly.
|Leave||Entitled to receive paid leave (for example, annual leave, personal/carers’ leave, long service leave) or receive a loading in lieu of leave entitlements in the case of casual employees. Fair Work Act 2009 (Cth) sets out 10 minimum standards of employment to which employees are entitled.||Not entitled|
|Superannuation||Entitled to have superannuation contributions paid into a nominated superannuation fund by their employer||No legal entitlement to superannuation|
|Insurance||Employees required to take out workers’ compensation insurance to cover their employees and the organisation||Not typically covered by workers’ compensation insurance. Employers should consider taking out personal accident insurance to cover volunteers for out of pocket medical expenses. The organisation’s public liability policy should cover organisation for loss caused by negligent acts or omissions of your volunteers|
|Work health and safety (WHS)||There is a legal duty under common law to take reasonable care to avoid exposing employees to likely risks of injury. All states and territories except Victoria and Western Australia have adopted Commonwealth WHS legislation||If an organisation falls within the WHS laws, then it will owe duties to all workers, including volunteers. There is a ‘volunteer association’ exception whereby organisations which are completely run by volunteers (ie with no employees) do not owe duties to their volunteers under model WHS laws. However, if an organisation has at least one employee, it will owe WHS duties to all workers.|
|Industrial Instruments (such as awards)||Entitled in certain industries and occupations to minimum entitlements depending on the type of industrial instrument||Not covered by the terms of industrial agreements or determinations of the Fair Work Commission|
|Taxation||Has income tax deducted by their employer||Do not have to pay tax on payments or benefits they may receive in their capacity as a volunteer (some exceptions apply)|
|Termination||Entitled to a notice period (or payment instead of notice) before termination of contract. Casual employees not entitled to notice unless their contract of employment provides for one.||No notice period or other requirements to terminate a volunteer relationship. It can be ended by either party at any time.|
ACNC Governance Standards also require charities to have policies in place to safeguard when working with vulnerable persons. This applies not only to charity clients or beneficiaries but includes its employees and volunteers who may be vulnerable persons.
ACNC External Conduct Standards also requires the charity to identify and have adequate arrangements in place to manage the risk of its staff and volunteers when working overseas
Are you aware of these challenges to working with staff and volunteers?
If not, we can help with:
- Reviews of volunteer/employer agreements
- Policies and strategies aimed at risk management
Please get in touch for a confidential discussion with the Birchgrove Legal NFP Team today on (02) 9055 8348.