What are the differences between volunteers and employees?

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 a person undertaking work for charity fits into. In this insight, we look at the distinction between employees and volunteers and what different legal obligations and entitlements apply to them.

Last updated: 15 August 2022

What is a volunteer?

Volunteering Australia provides the following non-legal definition of a volunteer:

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 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

What makes an employee?

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)

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.

LeaveEntitled to receive paid leave such as:annual leave,personal/carers’ leave, long service leave, or receive a loading instead of leave entitlements in the case of casual employees.Not entitled
SuperannuationEntitledNot entitled
InsuranceEmployees are required to take out workers’ compensation insurance to cover their employees and the organisationNot 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 the 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. If an organisation falls within the WHS laws, then it will owe duties to all workers, including volunteers. 
Organisations that are completely run by volunteers (ie with no employees) do not owe duties to their volunteers under 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
TaxationHas 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)
TerminationEntitled to a notice period (or payment instead of notice) before termination of the contract.
Casual employees are not entitled to notice unless their contract of employment provides for one.
A volunteer relationship 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 also to their employees and volunteers who may be vulnerable persons.

ACNC External Conduct Standards also require 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.

Birchgrove Legal is a boutique Sydney law firm that specialises in the not-for-profit sector. Its market-leading practice is at the cutting edge of innovative approaches to serving NFP sector organisations across the spectrum of entity types. Get in touch with one of our authors to discuss your needs further.

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