Any organisation needs people to carry out its work. In a voluntary/ community group these will typically be:

• Volunteers
• Committee members/directors/trustees
• Contractors
• Staff

Your organisation will have a duty of care to ensure that they are treated fairly and are kept safe. Once you offer people something in return for their services then you will have extra obligations under the law, they will be workers or contractors.

Volunteers

Although there is no legal definition in common usage they are people who give their time for some project or purpose, without being obliged to do so, and without pay other than the reimbursement of genuine out of pocket expenses.

As a group you need to make sure that you do not stray outside this definition or your volunteers could end up with the extra protections of workers, such as minimum wage, unlawful dismissal, etc. Therefore make sure you:

• Do not have a binding agreement with them
• Do not use the terms disciplinary or grievance procedure (because these are terms used in employment law), call it complaints
• Only pay the expenses they incur because of volunteering
• Do not give volunteers a set amount of money for volunteering.

Do make sure that:

• Your policies include volunteers such as confidentiality
• Your insurance covers them
• You recognise their value (think what you would have to pay someone to do their role) and acknowledge it.

Many groups could not operate without volunteers and so it is vital that they are managed well. Luckily you can get a lot of support and advice from our Volunteer Hub.

Committee members/directors/trustees

Those ultimately running your organisation will usually be unpaid and so will be treated as volunteers. Just like volunteers they need proper support so they can perform to the best of their ability. See our section on Trustees for ideas about how to do this. However if they are also staff then they will also be employees and will have the exact same rights as other staff. If you pay your directors and/or give them a dividend then you should get advice from an accountant about how to do this legally.

Contractors

Sometimes it will make sense to pay someone to carry out a service for you. It may be a specialised administrative one like running your website, doing your accounts or payroll. It could be a service to your users like a trainer. In this case you should have a contact for services. We have a basic template for guidance although you should get professional advice.

Beware though that not all contractors are such in law. There have been a lot of high profile cases, particularly those in the gig economy, where a company argued that people were sub-contractors, not staff but the courts have ignored what was written down in a contract but looked at the reality of the relationship and said they were employees. The courts will look at 

• right of substitution
• degree of control (these first two are primary focus)
• who provides any equipment or materials required
• the worker’s degree of financial risk and opportunity for profit
• whether the worker is part and parcel of the organisation
• whether the worker has a recognisable business infrastructure
• the degree of continuity in the relationship and the length of the engagement
• the number of other similar engagements entered into by the worker
• the way the worker is remunerated (for example inclusion of sick pay and/or holiday pay is usually seen as indicative of employment)
• the intentions of the parties.

HMRC has an online tool to help you decide but make sure you answer it accurately and honestly (don’t play the system to get the answer you want!)

If you get it wrong then like the gig economy cases then contractors will have rights to such things as minimum pay, paid holiday, sick pay and other time off, right to lawful dismissal, etc. Also HMRC may find you liable for tax and NI.

Staff

The law says that an employee is an individual who has entered into or works under a contract of employment and is obliged to provide their service personally to the employer. See our template contract. As a result they will be covered by a lot of employment law with a number of rights and able to go to an Employment Tribunal. See Employing People to understand some of these rights.

Sayer Vincent have a useful summary of the differences and how tax etc needs to be accounted for.

Who is the employer?

You need to be clear who the employer is. If the charity/voluntary group is incorporated (e.g. company limited by guarantee, CIO, CIC, or community benefit society) then the organisation itself will be the employer. However if you are an unincorporated body then it will be the trustees/committee members themselves, even if any contract names the organisation as the employer. Any action to tribunals or in the courts will cite the organisation if incorporated or named individuals for unincorporated. If you are unsure as to your status check with CAN or a lawyer.

Ultimately it is the trustees/committee members who must abide by employment law and good practice but can delegate decision making to others (e.g. hiring and firing, disciplinary, health and safety) but any such delegation should be very clear (i.e. in writing with clear boundaries) and backed up by policies and procedures that have been agreed by the committee. Quite often in larger organisations a chief officer/manager will deal with employees on a day to day basis and usually involve trustees/committee members for senior appointments and appeals.

Last updated: 26th April, 2022