Sometimes you may face a willing person who wants to gain experience and you take them on to show them the ropes. Beware, as that person you agreed to bring in for altruistic purposes may turn out to be an employee.
The courts have been called upon to rule about whether a person is a volunteer or employee on a number of occasions. The question arises when someone makes a claim for wages, workers compensation or superannuation after fulfilling a role or task that they ‘volunteered’ to perform.
It is almost impossible to volunteer for a for-profit organisation such as a company or business. People who perform value adding tasks in a business are generally employees and need to be provided appropriate award and National Employment Standards conditions such as annual leave and sick leave.
The legal status of volunteers was recently been considered by the Fair Work Commission in the context of a community organisation for the betterment of children’s lives through outdoor activities.
Mr Pitt and his partner Ms Campione were volunteer campsite caretakers for the Scout Association. Between them, they worked an average of 49 hours per week, but in return, they did not have to pay fees to use the site facilities.
Their membership with the Association was terminated after approximately a year, at which time they each filed an Unfair Dismissal application with the Fair Work Commission.
In the proceedings, the Scout Association submitted that it operated with contracted employees who performed operational, accounting and general office duties, but also relied upon the support of volunteers, including to operate and manage campsites. All volunteers were members of the Scout Association and were under the control of the Chief Commissioner, who was also a volunteer.
The Scout Association lodged a jurisdictional objection to the claim, contending the applicants were volunteers and not employees. Only employees have rights to make unfair dismissal claims.
In finding the applicants were volunteers, the Fair Work Commission held that the parties had not intended to create a legally binding agreement with associated legal consequences. This is important because an essential element of the contract of employment is the intention by the parties to be legally bound to one another. This is a bedrock principle and fundamental to the employment relationship.
The Commission had regard to a 2011 decision (Susan Bergman v Broken Hill Musicians Club T/A Broken Hill Musicians Club  FWA 1143) of Fair Work Australia (as the Commission was then known), in which it was stated:
An agreement to do something is only regarded as a contract if the parties intended the agreement to be legally binding and carry legal consequences. That is, if something goes wrong, if one party failed to act in accordance with the agreement, the other party would be entitled to take legal action to seek performance.
Volunteer work, by its definition does not, in general, involve this element, as the usual motivation for the arrangement is altruism rather than private gain or material advantage. That is, the commitments between parties in such arrangements are moral rather than a legal and formal one.
In determining further whether a contract existed, the question must be asked, can it reasonably be inferred that the parties intended to create legal relations?
In applying this reasoning, the Commission concluded:
This is where the Applicants’ cases must fail. Whatever the Applicants may have thought, there was not a meeting of the minds between the parties concerning an intention for there to be an agreement between them that was legally binding and that carried legal consequences. The Respondent had a clear and consistent approach to circumstances where it intended to offer employment, and a different, and also clear and consistent approach to circumstances where it intended for functions to be performed on a volunteer basis. The approach the Respondent took to making the arrangements it did with the Applicants was consistent with the later, not the former. In those circumstances I cannot be satisfied that the parties intended to enter a contract that was legally enforceable.
The jurisdictional objection was upheld and the unfair dismissal claims were dismissed.
Useful criteria, which can be used in order to determine whether a contract is an employment contract or a contract between a volunteer and an organisation.
When determining whether a contract is an employment contract, the Fair Work Commission will have regard to a number of factors, including:
- Does the individual work solely for the organisation?
- Does the organisation deduct income tax from remuneration paid?
- Is the individual paid by periodic wages or a salary?
- Does the individual’s work create goodwill or saleable assets for the employer’s business?
These factors are not exhaustive and are good questions to ask when you are considering bringing someone into the business that may end up producing product or serving customers that is a profit-making task for the business.