The International Journal
of Not-for-Profit Law

Volume 2, Issue 4, June 2000

A quarterly publication of the International Center for Not-for-Profit Law

Table of Contents

Letter from the Editor

Articles

Scottish Charity Law: Proposals for Reform
By Dr. Christine R. Barker

Volunteering-- The Long Arm of the Law
By Debra Morris

Do Czechs Need a New Law on Associations?
By Dr. Petr Pajas

The Freedom to Join an Association: A Principle in Question
By Barbara Rigaud

Structural and Systematic Issues Surrounding the Establishment and Management of Endowments in the Czech and Slovak Republics
By Robert N. Thomas

Report on the Violations Committed in the Course of Registration and Re-Registration of Public Associations in the Russian Federation in 1999
Prepared by the Information Center of the Human Rights Movement and the Center for the Development of Democracy and Human Rights

Reviews

An Introduction to the Not-for-Profit Sector in China
By Nick Young and Anthony Woo
Reviewed by Georgina McCaughan

Las Organizaciones de la Sociedad Civil en el Ordenamiento Legal Argentino
By GADIS and Foro del Sector Social
Reviewed by Fernando Latorre

Hacia un Desarrollo con Ciudadania
By La Sociedad Internacional de Investigación del Tercer Sector
Reviewed by Antonio Itriago

Entidades Sin Ánimo De Lucro - Regimen Tributario Especial
By Juan Carlos Jaramillio Diaz, Vargas Ballen, Jenny & Fabio Andres Duran Acosta
Reviewed by Antonio Itriago

Case Notes

North America:
the United States

South Asia:
India

Country Reports

Asia Pacific:
Australia

Central and Eastern Europe:
Regional
| Bulgaria | Croatia | Czech Republic | Estonia | Kosovo | Macedonia | Montenegro | Romania | Slovak Republic | Yugoslavia

Latin America:
Belize
| Chile | Colombia | Nicaragua | Venezuela

Middle East and North Africa:
Egypt

Newly Independent States:
Armenia
| Moldova | Russia

North America:
Canada | Mexico | the United States

South Asia:
India

Sub-Saharan Africa:
Ghana
| South Africa | Tanzania | Uganda

Western Europe:
France
| Germany | the United Kingdom

International:
CIVICUS Diamond Project | G4+1 Accounting Standards

International Grantmaking

Determining Whether to Make an Equivalency Determination or to Excercise Expenditure Responsibility
By Derek J. Aitken

Supporting Microfinance Abroad: Introductory Legal Issues for U.S. Grantmakers
By Timothy R. Lyman

United States International Grantmaking (USIG) Project Unveils New Web Site
By Derek J. Aitken

Community and Corporate Philanthropy

The Enabling Environment for Community Philanthropy

Changemakers.net

German Publication

Partnerships

Survey of the Current Legislative Framework for NPOs to Perform Social Services in Bulgaria

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Editorial Board

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Volunteering-- The Long Arm Of The Law*

By Debra Morris
Charity Law Unit, University of Liverpool

Introduction

Expansion and increased professionalism in the voluntary sector, together with changes in funding patterns have all had their effect upon volunteers. As the emphasis on good management and effective organisation within the voluntary sector has grown, a knock on effect has been increased formalisation and tighter management control over volunteers. Tighter job descriptions, formal review and appraisal systems, and even disciplinary procedures are all now becoming commonplace for volunteers.[1] It is even becoming accepted in some circles to pay ‘volunteers’.[2] This carries potential for legal implications, which could change the face of volunteering. In 1996, the Commission on the Future of the Voluntary Sector warned:

in the eyes of the law, volunteering may be becoming indistinguishable from paid work and thus subject to the full panoply of employment legislation.[3]

This piece will consider some areas in which the law may have an effect upon volunteering.

The Status of Volunteers in the Context of Employment Law Rights

For many years, voluntary bodies have taken advantage of the services of their volunteers, generally without fear of such workers being able to claim any employment protection rights. However, there have been several developments which may suggest that changes are under way. For example, in 1994, an industrial tribunal (now re-named employment tribunals) held that a Relate marriage guidance counsellor was in employment within the meaning of the Race Relations Act 1976.[4] She had volunteered on the understanding that Relate would provide her with training and supervision, in exchange for her working a minimum number of hours. There was also provision in the agreement for the recoupment of training expenses from counsellors who did not fulfil their obligations. In addition, the agreement foresaw that counsellors could effectively be ‘dismissed’. Finding that the individual concerned was an employee meant that she was able to brig her claim to the tribunal under the Race Relations Act.

Another case, which has caused some concern in the voluntary sector is that brought at the end of 1997 by Mrs Chaudri, who worked for the Migrant Advisory Service (MAS), and who sought to challenge her volunteer status.[5] She worked four days per week from 10am to 1pm undertaking general typing and office administration duties. She had done so since 1994. She was originally paid £25 (later increased to £40) which was stated to be weekly ‘travel and subsistence expenses’ by MAS. However, Mrs Chaudri lived near to the office where she worked and finished work by lunch-time each day, and therefore incurred no travel or subsistence expenses. The payments were also made when Mrs Chaudri was off work, either on holiday or due to sickness. The termination of her arrangement with MAS followed her announcement that she was pregnant. Relying on the fact that she was an employee,[6] she then commenced an application in the employment tribunal claming unfair dismissal,[7] sex discrimination,[8] and breach of contract of employment.[9] MAS argued that she was not an employee because: she did not receive a salary; she did not have a written contract of employment; there was no intention on the part of MAS to create a contract of employment; and, she was not treated as an employee. The employment tribunal, and later the Employment Appeal Tribunal, did not accept these arguments. Looking behind the ‘label’ placed upon the relationship, the tribunal was influenced by the fact that ‘expense’ payments were made to her at a flat rate, even though her expenses were negligible. In effect, the payment was merely a disguised form of wages. Other influencing factors were that she worked regularly and for a substantial period of time. The result of this finding was that she was free to pursue all her claims.

To balance this decision, another must be mentioned. A subsequent employment tribunal[10] found that a ‘genuine’ volunteer of St John Ambulance had no legal remedy against the organisation when she complained of persistent sexual harassment by a fellow volunteer, and this decision was upheld by the Employment Appeal Tribunal.[11] Since 1992, when she had joined, the volunteer in question had worked a minimum of 50 hours per year and had attended a minimum of 12 first aid training meetings per year. She received payment for expenses for undertaking her duties and payment for the training courses which she attended and professional qualifications that she attained. The argument, put on the volunteer’s behalf, that ‘employment’ in the Sex Discrimination Act 1975 should be construed widely so as to include voluntary activity, was rejected. This meant that she could not bring her claim, alleging sexual harassment to the tribunal and there was therefore no remedy available to her.

Paying for Voluntary Work

The decision in the case concerning Mrs Chaudri and MAS makes it clear that voluntary organisations making payments to their volunteers may be creating a relationship of employer and employee. If that is the case, the individuals concerned will have all the normal statutory employment rights. Nevertheless, all volunteers should be able to claim back any money spent (for example, on travelling, postal and telephone expenses, occasionally secretarial expenses or protective clothing and sometimes even child-care) in the course of their voluntary work. No one should be out of pocket through volunteering or discouraged from undertaking voluntary work because they can not afford to do it. Non-reimbursement of expenses is often stated as one of the barriers to volunteering by under-represented classes.[12]

The dividing line between payment of expenses and payment for service is very fine, and care must be exercised to ensure that reimbursement is made only of actual expenses which have been incurred. As well as the Employment Law considerations that have been discussed, other problems can arise if volunteers are paid a fixed flat rate sum ‘to cover expenses’. Sessional payments, pocket money, subsistence payments, honoraria or lump sums to cover possible expenses may all be indistinguishable from a payment for service and may then lead to problems relating inter alia to: taxation; welfare benefits; and minimum wage.

1. Taxation Problems

Whilst reimbursement of expenses should not be taxable, problems may arise with flat rate allowances, commonly given by voluntary organisations using a large number of volunteers. It may be appropriate to get prior approval for such a practice from the Inland Revenue. The payment of a genuine honorarium, i.e. a single gift as a mark of gratitude for services as a volunteer, should not be classed as income and will not be taxable. However, lump sums and frequent honoraria can be classed as taxable earnings. A survey on the extent of paying volunteers in the 1990s[13] found that 81% of groups surveyed had not put their ‘paid volunteers’ on the payroll for PAYE. However, volunteer expenses paid without tax and national insurance deductions which are later found to have been wages could mean that the voluntary body will have to pay the tax bill. The same survey reported that the Volunteer Centre UK had received several requests for assistance from local voluntary groups faced with large fines imposed for non-registration of employees for taxation purposes.

For volunteer car drivers, the Inland Revenue determines annually how much a volunteer can claim in expenses per mile, without incurring any liability to taxation. Annual tax free rates vary according to the size of car and the number of miles travelled.[14]

2. Welfare Benefits Problems

Unemployed volunteers can find that their receipt of welfare benefits is under threat.[15] A 1997 study of unemployed volunteers found evidence that Job Centre staff had dissuaded some individuals from pursuing voluntary activities.[16] The relevant regulations are complicated and the study found that knowledge of the impact of voluntary work on benefits was generally sparse. There was considerable confusion, by both claimants and staff, about the amount of time a person could spend on voluntary activities and the amount of notice that volunteers would be required to give to their ‘voluntary employer’ if they were offered a job. There was also a fear of being wrongly reported for undeclared paid work.

Volunteer claimants should not suffer due to the ignorance Job Centre staff or their misinterpretation of rules. However, volunteering may affect a person’s entitlement to jobseeker’s allowance (JSA).[17] Undertaking voluntary work will not necessarily affect JSA, as long as a person remains available to take up paid employment and is actively seeking it.[18] This means that volunteers must: continue to look for employment as agreed with their employment adviser; be contactable while doing voluntary work if a job opportunity arises; be willing and able to start a job or to attend a job interview, at 48 hours notice; and, not get any payment apart from reimbursement of expenditure.

There is no stated limit as to the number of hours per week that a claimant can volunteer, provided the conditions outlined above are met. In practice, however, it will probably be unusual for someone volunteering full-time to meet the requirement to be actively seeking work. Also, volunteers who give a commitment to volunteer for a minimum period may lose their right to JSA because they are no longer available for work. Environmental charities, whose projects often need full-time volunteers based in remote areas away from home, may have particular difficulty retaining volunteers who are claimants. For example, in July 1998, it was reported[19] that a full-time National Trust volunteer warden who was working in an isolated location had been refused JSA on the basis that the rent-free accommodation amounted to a payment in kind. This is despite the fact that the volunteer’s predecessor had received JSA following an appeal decision. This case clearly highlights the inconsistencies that can occur in this area.

Volunteers are deemed[20] available for work if they are volunteering at a residential work camp for up to two weeks once per year, or if they are engaged in staffing or launching of a lifeboat or in the performance of a duty as a part-time member of a fire brigade or engaged during an emergency in duties for the benefit of others.

Volunteers should inform the employment officer at the Job Centre that they are undertaking voluntary work. Voluntary work is not considered to be a step taken to satisfy a jobseeker’s duty actively to seek work. However, in considering whether the steps a volunteer has taken are reasonable, the Employment Service must consider all the circumstances of the individual case including time spent in voluntary work and the extent to which it may improve prospects of finding employment. Employment Service internal guidelines now recognise the beneficial role voluntary work can play in getting people back into paid employment. Nevertheless, staff have considerable discretion in applying regulations. While local interpretation can make the system more flexible, it may also lead to inconsistencies.

3. Minimum Wage Problems

The National Minimum Wage Act 1998 sets up a legislative framework for a national minimum wage expressed as an hourly rate. Although volunteers are excluded from the provisions of the Act,[21] the original definition used was narrow and required volunteers, in order to be exempt, to be working for a charity or voluntary organisation only and to be receiving expenses only. After much intense lobbying by voluntary organisations, the original clause in the Bill was amended and the definition has been extended. The exempt category now includes volunteers in the state sector as well, so that those who volunteer in schools, hospitals and social services departments are not within the scheme. The definition of allowable expenses has also been widened to include an element of subsistence. It ensures that volunteers receiving ‘benefits in kind’, such as meals, travel expenses or, where the volunteering activity warrants it, accommodation, will continue to be classed as volunteers for the purposes of the Act. One type of volunteering which would have caused problems under the original provisions is that of full-time placements away from home for young people. These volunteers usually get their board and lodging, plus a small weekly allowance or ‘pocket money’ of around £25. Under the Act, it seems that if a volunteer is working away from home, accommodation and food are reasonable expenses, together with an allowance for necessary extra clothing. Also, any training provided with the sole or main aim of enhancing a volunteer’s ability to do their voluntary work is not to be considered as a benefit in kind.

Despite some clarification in the legislation, there are still many grey areas. People are sometimes referred to, and regard themselves, as ‘volunteers’ who are certainly not voluntary workers. For example, those who have offered to assist in a service, and then receive payment from a voluntary organisation, which is comparable with that earned by regular employees in a similar field. On the other hand, some young volunteers, many of whom have no paid employment, may receive a token payment in respect of the service which they give as members of voluntary organisations.

Clearly, paid employees of voluntary organisations are covered by the legislation. Some charities are finding solutions to this problem - they are asking staff to give some of their work time voluntarily. An advert for a part-time job with a salary of £2495 for 12 hours paid and 4 voluntary hours means that the worker gets £4 per hour. The ‘real’ wage is £3 per hour. Will it fall foul of the minimum wage provisions? Some workers in voluntary organisations do genuinely have dual roles, part volunteer and part paid staff. Their voluntary effort should not be discouraged, but at the same time, their paid work should be properly rewarded.

Volunteers and Police Checks

Many volunteers undertake work involving regular contact with children, young people or vulnerable adults. Volunteers are treated in the same way as employees for the purpose of police checks. When part V of the Police Act 1997 comes into force, there will be a legislative framework for the disclosure of criminal records through the creation of a Criminal Records Bureau. Currently, criminal record checks are carried out by the police and mostly limited to the employees of statutory bodies, for example, health and local authorities, schools and probation services, who work with under-18s. When the provisions of the Police Act 1997 come into force, there is to be much wider access to criminal record information, particularly to the private and voluntary sector. Undoubtedly, once the system is in place, those who insure voluntary organisations will insist that these checks are carried out. In effect, since employers will have wide access to police records, police checks will become de facto obligatory for some types of voluntary work. This may deter volunteers who do not wish to subject themselves to such checks. It may also cost volunteers money. It is expected that an enhanced criminal record certificate will cost around £10. At present, there is no provision for free checks for volunteers. Plans for the Criminal Records Bureau were announced by the Home Secretary, Jack Straw, in December 1998.[22] It is estimated that it will take two years to establish the Bureau during which time there will be wide consultation with user groups, such as the voluntary sector and trade unions, to ensure that its operation will meet the needs of the community it will serve.

Insurance

This is another grey area for volunteers. There is no obligation on employers to take out employer’s liability insurance to cover claims from volunteers if they become ill or are injured as a result of the ‘employers’ negligence, but it is good practice either to extend an employer’s liability insurance to cover them, or to cover them under a public liability policy. In relation to claims brought against volunteers by third parties, voluntary bodies should ensure that their public liability insurance, professional indemnity insurance and product liability insurance (or any other relevant insurance) indemnifies volunteers (as well as employees) if any claim is brought against them.

Conclusion

One of the unique features of voluntary activity has always been its informality, flexibility and innovative nature. The more this versatility and autonomy are stifled through the increased bureaucracy and professionalisation of voluntary organisations, the less unique and different voluntary activity becomes. This short piece has considered several areas in which legal intervention may regularise and formalise the previous informal activity of volunteers. In some respects, this is beneficial. For example, the discussion in parliament of the National Minimum Wage Act and its effect on volunteers reveals some acknowledgement and understanding of the nature of volunteering. The legislation provides the first attempt at a definition of a volunteer and this is to be welcomed as it should make such relationships clearer.

To be certain that volunteers remain just that, there should be no obligation on volunteers to attend and, if any payments are made, they should be to cover genuine expenses only. Organisations that fail properly to assess the working relationships that they have with those who undertake work on a voluntary basis could find that they are vulnerable to claims for compensation, if it is held that their volunteers were in reality, employees.

As well as possibly converting volunteers into employees in the eyes of the law, a further effect of paying volunteers is to undermine the voluntary ethic of the voluntary sector, compromising the very qualities that distinguish it from business and government.

Even without payment, volunteering may be subject to legal regulation. The example of the vetting of volunteers, and the fact that this practice is only going to increase in the future, has been considered. Clearly a balance has to be maintained in areas such as this; the benefits of screening do not need to be rehearsed, and yet, at the same time, if volunteers are deterred, voluntary organisations may find themselves with less volunteers. The bureaucracy associated with volunteering has been mentioned as a factor against deciding to volunteer in the 1997 national survey of volunteering.[23] It is to be hoped that the long arm of the law does not stretch too far into the realms of volunteering. If it does, what may be left in the future is a very different (and possibly depleted) ‘voluntary’ workforce.

Notes

* This article first appeared in Volume 4 Issue 4 of the International Journal of Nonprofit and Voluntary Sector Marketing, which is a publication of Henry Stewart Publications. Click here to visit Henry Stewart online- www.henrystewart.co.uk.  

[1]  See, for example, Davis Smith, J, The 1997 National Survey of Volunteering, 1998, London: National Centre for Volunteering.

[2]  See, for example, Blacksell, S and Philips, D, Paid to Volunteer. The Extent of Paying Volunteers in the 1990s, 1994, London: Volunteer Centre UK.

[3]  The Commission on the Future of the Voluntary Sector, Meeting the challenge of change: voluntary action into the 21st century, 1996, London: NCVO, p 76.

[4]  De Lourdes Armitage v Relate and ors, IT Case Number: 43438/94 (11 October 1994).

[5]  Chaudri v Migrant Advisory Service, IT Case Number: 2201678/96. (2 September 1997). Later upheld in the Employment Appeal Tribunal - Migrant Advisory Service v Chaudri, Appeal Number: EAT/1400/97 (28 July 1998).

[6]  Defined in Employment Rights Act 1996, s.230 as an individual who has entered into or works under a contract of employment.

[7]  Under Employment Rights Act 1996, s.94.

[8]  Under Sex Discrimination Act 1975.

[9]  Under Industrial Tribunals (Extension of Jurisdiction) Order 1994, SI 1994 No. 1623, reg. 3.

[10] YU v St John Ambulance , IT Case Number: 2901522/97 (27 February 1998).

[11]  Uttley v St John Ambulance, Appeal Number: EAT/635/98. (18 September 1998).

[12] See, for example, Joseph Rowntree Foundation, Involving Volunteers From Underrepresented Groups (Social Policy Research Findings 105), 1996, York: Joseph Rowntree Foundation.

[13] Blacksell, S and Philips, D, Paid to Volunteer. The Extent of Paying Volunteers in the 1990s, 1994, London: Volunteer Centre UK.

[14]  See Volunteer Drivers Inland Revenue Leaflet IR122.

[15]  See, for example, Joseph Rowntree Foundation, Involving Volunteers From Underrepresented Groups (Social Policy Research Findings 105), 1996, York: Joseph Rowntree Foundation.

[16]  Elam, G, and Thomas, A, Stepping Stones to Employment: Part-time Work and Voluntary Activities Whilst Claiming Out-of-Work Social Security Benefits (DSS Research Report No. 71), 1997, London: TSO. See also, Blacksell, S and Philips, D, Paid to Volunteer. The Extent of Paying Volunteers in the 1990s, 1994, London: Volunteer Centre UK, p 19, to the same effect.

[17]  See Leaflet FB26 - Voluntary and part-time workers: your benefits, pensions and National Insurance contributions, April 1998, UK: Benefits Agency.

[18]  Jobseekers Act 1995, s.1 and The Jobseeker’s Allowance Regulations 1996, SI 1996 No. 207. See also Leaflet JSAL7 Voluntary Work When You’re Unemployed Employment Service.

[19] Third Sector 9 July 1998.

[20]  The Jobseeker’s Allowance Regulations 1996, SI 1996 No. 207, reg. 14.

[21]  National Minimum Wage Act 1998, s.44.

[22] Home Office Press Release 494/98 ‘Criminal Records Bureau To Strengthen Child Protection Safeguards’ 14 December 1998.

[23]  Davis Smith, J, The 1997 National Survey of Volunteering, 1998, London: National Centre for Volunteering.

 

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