The International Journal
of Not-for-Profit Law

Volume 2, Issue 4, June 2000

France

The Freedom to Join an Association: A Principle In Question*

“The association is an agreement through which two or more people can join their knowledge or activities, in a permanent way, with an objective other than to share profits.

Its validity is ruled by the general principles of the law on contracts and obligations.”[1]

Therefore, the association is a contract, ruled by the constitutional principle of freedom of association, by which each person is free to join or not to join an association of his choice and also, each association is free to accept or reject new members.

The modern times and, more particularly, the requirements of the associations’ economic activities have brought a breach to this fundamental principle. In fact, today it can be compulsory to join certain associations. Also, the refusal to accept a member can be unjustified in certain legal clauses.

These restrictions on the freedom of association seem, nevertheless, open to criticism.

Conditions of Adherence

Joining an association implies the respect of any contract’s conditions of validity: the new member’s capacities, the real and lawful objective of the organization and, most importantly, mutual consent.[2]

In fact, as the relationship between an association and its members is a contractual one,[3] the validity of the relationship depends upon the conjunction of two wishes: an application from the candidate and an acceptance from the organization, which is usually formalized by an approval.[4]

As a result of the condition of mutual consent, only the conjunction of the application and the approval forms a valid adherence.

Thus, particular attention must be paid to « legal members » of an association. These are generally private or business entities that the association solicits for support or guarantees and are, by their simple existence, members of the organization without prior approval.

One must nevertheless remember that they do not become members until having accepted this position. This is generally the case with any territorial community, which cannot become members until due deliberation by the deliberating organ.[5] The principle is the same for each member of the organization wishing to be admitted.

The member’s freedom to join

As a rule, nobody is forced to join an association.[6]

Nevertheless, certain associations benefit from a legal monopoly to manage an activity.

This way, any person who wishes to engage in the activity in question must join the association in charge of managing said activity.

This concerns organizations which include:

• Sport federations delegated by the Minister in charge of sports to organize competitions delivering international, national and regional titles;
• fishing and fish breeding associations;
• pigeon-fanciers’ associations;
• associations in regard to employment, commerce and industry (ASSEDIC), for any companies in the field of the UNEDIC.

For the most part, anyone refusing the mandatory membership is sanctioned by a ban to carry on the relevant activity.

Only a law can create such an obligation.[7]

Nevertheless, the European Convention of Human Rights and fundamental freedom establishes the right not to belong to an association or to leave it.[8] The only exception permitted to this liberty concerns the obligations accepted by law and that are necessary measures in a democratic society, for national security, public security, crime prevention, protection of public health and moral or protection of the rights and liberty of others.” Only a law fulfilling the above-mentioned objectives can impose the membership to an association. If no such law applies, no one can be forced to join an organization.

It is within this framework that certain members of the Community Hunting associations (ACCA) dispute their membership made mandatory by the law called “Verdeille law (loi Verdeille)” from 10 July 1964.

This law forces the owners of a piece of land or forest smaller than 20 hectares to bring enjoyment of their land to the Community Association. The association’s goal is to “favor the development of game and the destruction of detrimental animals in the territory, suppress poaching and educate its members of the respect of property and harvest, and, in general, to ensure an excellent technical organization of the hunt in order to give the hunters the best possible enjoyment of the sport.”[9]

After noting that the creation of ACCA incurred in only 29 out of 93 regions and that the membership was mandatory only for one out of four land owners in a community, the Court decided that the restriction brought on the freedom of association by the French legislation cannot be considered proportionate to its legitimate goal.[10]

It is, in fact, difficult to defend the position that the destruction of detrimental animals would be a necessary measure to maintain national security and that the suppression of poaching would be a step forward in crime prevention.

The organization has the freedom to accept or refuse membership to an applicant. This a priori overall freedom (because of the contractual nature of the association contract) also has exceptions.

The Principle of the Approval

• As a rule, an association has the right to freely choose its members, even if it has been advertising to attract applications.

The association by-laws determine liberally the conditions of admission for the members. For example, they can stipulate:

• • sponsoring of new candidates by members of the association;
  • a test period before attaining the status of member;
  • a majority or unanimous vote by the founder members.

The by-laws can also include a clause stipulating that a refusal of membership does not have to be justified.[11]

It is also possible for the by-laws to have no prior condition for admission, except the payment of a membership fee.

• The associations’ liberty to accept or refuse the application of a new member is due to the intuitu personae character of the association contract. It implies that the association always reserves itself the right of refusal for any new member application, even in the case of by-laws without prior conditions.[12]

As an example, this liberty was acknowledged when an association published an ad in a tourist guide saying that it was admitting new members. The goal of the ad was to solicit new members but did not in any way mean that the association had to accept all applications.[13]

An association can reject an application without having to justify itself and without engaging its responsibility.[14]

Nevertheless, if the refusal is connected to offensive or harassing circumstances with regard to the candidate, this refusal can be considered abusive and could give the candidate right to damages. However, even in these circumstances, the principal of refusal cannot be challenged.

The Courts do not have the power to control the motives of a membership refusal; the rejected applicants have no means to appeal and cannot obtain damages.

• Nevertheless, this liberty of admission is not absolute. If the by-laws institute an admission process, the judges can then ensure that these formalities are followed: the competence of the authority making the rejection decisions, summons of the candidates, etc.

It is the same if the by-laws state that a rejection of an application must be for a particular motive. The judges can then control the reality of the motive indicated or sanction a discretionary decision, but the person whose application has been rejected in accordance with the by-laws cannot obtain restitution for the damage suffered.

Exceptions to Membership Refusals

A priori, it seems that an association can freely refuse a new member. However, in some areas such a refusal can be sanctioned.

This is particularly the case when it is mandatory to belong to an association in order to practice certain activities (Sport federations, pigeon-fancier’s associations, employment associations, commerce and industry (ASSEDIC)).

An association with legal monopoly has to accept all membership applications when being a member of said association is a condition to engage in a certain activity. It can only refuse the application when there is a legitimate motive.[15]

Also, an association has to accept all membership applications when a refusal could have an anti-competitive objective or effect.[16]

The association can be called to appear at the Competition Council in case of anti-competition practices.[17]

Consequently, the question can be asked whether an association is allowed the ability to refuse a membership application without being criticized with regard to the legislation prohibiting the refusal to sell. In fact, how is it possible to distinguish between an association’s refusal to give a future member access to the properties and services offered within the scope of the association’s objective and the refusal to sell goods or services to a client/consumer?

Certain associations address themselves to anyone interested in the activities they offer. They intervene directly in areas in competition with trading companies, to the point that the Tax Administration considers them normal companies and taxes them accordingly. These members are considered more like clients or consumers than real members lead by the wish to be part of the association. In fact, one no more joins an association in order to engage in certain activities (except in the case of legal monopolies) but to participate in the General Meeting.

Therefore, would it not be possible to sanction an association, not on the grounds of non-respect of a contract offer, but on the incrimination of a refusal to sell or assist?

The High Court previously rejected the incrimination on these grounds in a case where an association had refused the application of a new member stating that “the association agreement is a private law contract subject to the principle of contractual liberty, except in case of restrictions in accordance with the law or in the actual by-laws.” The Court rejected the incrimination, noting the principle of contractual liberty, the absence of proof of discrimination and the fact that the ad at the origin of the application did not constitute a pre-contractual offer.[18]

Yet, in our opinion, this case law will probably be subject to evolution.

Due to the fact that associations direct themselves more towards consumers or clients than to real members, they could be sanctioned for refusal to sell as a criminal offense.

This was the case for a private health insurance company who was sentenced due to such incrimination even though it was a non-profit organization, managed free of charge.[19]

An organizer of a professional show was sentenced on the same grounds, due to a rejection of an application from a company among the exhibitors.[20]

To the effect that associations today are considered professionals (see juris associations n°154/1997 p. 20) and they become obligated to pay commercial tax due to their competitive activities, it will very likely be possible to sentence an association, on the grounds of a refusal to sell, which is a criminal offense, for a refusal of admission.

A case law evolution to follow….

Notes

* Article originally published in the bi-monthly magazine juris associations, n° 204 and 205.

[1] Article 1, Law from 1 July, 1901

[2] Article 1108 of the Civil Code

[3] Article 1, Law from 1 July, 1901

[4] Cour de cassation, 1 st Civil Chamber, 7 April 1987, Bull. Civ. I, n°119

[5] Circular n°2010 from the Prime Minister, 27 January 1975

[6] European Court of Human Rights, 30 June 1993

[7] Conseil d’Etat, 21 October 1988, Association of the parents to students in public schools and the National Confederation of free groupes to the public school system, req. N°78462 and 82881,

[8] The European Court of Human Rights, 30 June 1993, Sijurjonsson c/Islande, ref. « the taxi chauffeur », juris association n°101/1994, p.6.

[9] Article 1, Law from 10 July, 1964.

[10] CEDH, 29 April 1999, n°25088/94, 28331/95 and 28443/95, Ref. Chassagnou and others c/France and Juris associations n°202/1999, p.10.

[11] Lyon’s Court of Appeal, 2 July 1985, juris associations n°22/1985, P. 48

[12] See B Clavagnier, Rédiger les statuts de votre association, éd. Juris Service

[13] Cour de cassation, 1 st Civil Chamber, April 7 1987, juris associations n°30/1987, p.41.

[14] Appelate Court of Lyon, 2 July 1985

[15] Cour de cassation, 1 st Civil Chamber, 15 November 1994, n°1500 D, Mémento pratique Francis Lefebvre Associations et Fondations 1999-2000 § 243.

[16] Conseil de la concurrence, 18 May 1993, Dalloz 1997

[17] See juris associations n°197/1999 P. 8 and 9 and juris associations n°198/1999 p.17

[18] See juris associations n°30/1987 p.41, Cour de cassation, 1 st Civil Chamber, 7 April 1987, ruli ng n°432 P.

[19] Court of Appeal, Agen, 16 January 1989, Gazette du Palais, 22 June 1989.

[20] Court of Appeal, Paris, 13 July 1990, Lettre de la distribution 1990, n°10.

Germany

Tax legislation:

The process of enacting various legal and fiscal reforms for the not-for-profit sector in Germany has had its first real success with the passage, on June 8th and 9th, of provisions reforming the tax laws applicable to foundations. As discussed in the last issue of the Journal, the reforms include the following:

1. The existing deductibility allowances of 5% to 10% of taxable income found in the personal income tax and the corporate tax will remain unchanged, but individuals and corporations will also be able to deduct up to 40,000 DM per year without regard to the percentage restrictions.
2. It will now be possible to create a foundation up to two years after the death of a decedent, and for a wide range of public benefit purposes (Gemeinnützige Zwecke).
3. The reserve allowance for foundations will be increased to one-third of income; this rule presently permits a German foundation to retain up to 25% of its income from investments and use that amount use for investment purposes.
4. There will no longer be a capital gain tax on the increase in value of corporate stock donated to foundations.

In addition, a new reform was added, which surprised most observers – a founder of a foundation in Germany will now be able to deduct up to DM 600,000 over the course of ten years, in addition to the other limits.

For further discussion of these changes, please see the discussion in Maecenata Actuell, No. 22, for June 2000 (pp. 2-3), which can be obtained by contacting Dr. Rainer Sprengel at rsp@maecenata.de. IJNL will continue to follow developments in Germany and report on them over time.

the United Kingdom

Scottish Charity Law: Proposals for Reform

By Dr Christine R. Barker*

Charity law is an area of increasing importance, and its reform is a subject in which the recently (re-)formed Scottish Parliament has expressed interest. Although the present members of the Scottish Parliament were elected as recently as 1999, Scotland was a separate kingdom until the seventeenth century and has its own legal system whose separate existence was guaranteed by the Act of Union in1701. It is not surprising, therefore, that charities in Scotland are regulated differently from those in other parts of the UK, and that the Scottish Parliament is considering proposals to change the law which governs them.

In recent years reform of the law in England and Wales has been proposed in the report of the Commission on the Future of the Voluntary Sector in England and Wales (Deakin 1996), and in Scotland by the report of the Commission on the Future of the Voluntary Sector in Scotland (Kemp 1997) and in the recently published reports of Dundee University’s Charity Law Research Unit, of which I am a member (CLRU 2000).

The first major evaluation of the statutory supervision of charities in Scotland, conducted by Dundee University’s Charity Law Research Unit, was published on 12th June 2000 by the Scottish Executive Central Research Unit. The evaluation examined the implementation of the principal legislation governing Scottish charities, namely Part I of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (“the 1990 Act”), and two other sets of provisions which are relevant in this area, Part VI of the Education (Scotland) Act 1980 (relating mainly to educational endowments) and section 119 of the Civic Government (Scotland) Act 1982 (relating to public charitable collections). This paper provides a summary of our proposals for reform of the Scottish system.

Three separate reports have been published by the Scottish Executive Central Research Unit as a result of this research. Scottish Charity Law: An Evaluation is the main report; Public Trusts and Educational Endowments examines, at an exploratory level (1) the regulation of public trusts and educational endowments and (2) the reorganisation of public trusts and endowments (both educational and non-educational); Public Charitable Collections, examines some of the problems associated with collections of cash from members of the public, either in the street or from house to house, in aid of a particular charitable cause.

A variety of research techniques were employed for our research, both desk-based and empirical. The desk research involved a legal analysis of the regulatory system in Scotland and comparative studies of the legal position in other jurisdictions, including England and Wales. The empirical study involved a postal survey of 2500 Scottish charities; interviews with 45 advisers to charities; an analysis of the work of the Scottish Charities Office (the main regulatory agency in Scotland), including in-depth scrutiny of 7 cases taken to the Court of Session (Scotland’s principal civil law court); and discussions with the other regulatory institutions.

While recognising that the provisions of the 1990 Act have greatly improved the supervision of charities in Scotland and that the allocation of certain tasks to a number of different regulatory agencies has, on the whole, worked well, we discovered that a significant number of charities were unclear about their legal responsibilities, and small charities without an infrastructure of “umbrella” support had difficulty in implementing some of the legislation. We also consider the current system of providing information to the public about Scottish charities to be unreliable. Charities themselves also expressed a desire for more readily available information and guidance on charity law and regulation.

Concluding that there is a lack of cohesion between the provisions in the different pieces of legislation and that a fresh start is required, we recommend that the existing provisions should be repealed and replaced by a single Act of the Scottish Parliament governing (1) the regulation of Scottish charities and public trusts; (2) the reorganisation of Scottish charities and public trusts; (3) fund-raising by means of public charitable collections; and (4) the provision of information and advice to organisations which are subject to the system and to members of the public.

Specific recommendations include the following:

• a definitive public register of Scottish charities should be established, to be maintained by a new official, the Registrar of Scottish charities
• standards set for charities should be harmonised so as to apply equally to charities of all legal forms, but should make appropriate allowance for small charities
• standards set for charities in Scotland should so far as possible be harmonised with those set for charities elsewhere in the UK
• the Scottish Executive should authorise the terms of general guidance to charities on their responsibilities under charity law
• rationalisation should ensure that all charities, and benevolent organisations seeking to raise funds, are subject to a co-ordinated system of monitoring
• all Scottish charities (and benevolent organisations seeking to raise funds) should be required to submit accounts annually to the Registrar of Scottish charities
• the Registrar of Scottish charities should deal initially with charity-related enquiries and should disseminate general guidance from the Scottish Executive

In a little more detail, our proposals for improvement of the current legislation for charities in Scotland may be summarised as follows:

Definition

• A new definition of “Scottish charity” is proposed: a body which is established under the law of Scotland, or managed or controlled wholly or mainly in or from Scotland, and which has exclusively “charitable” purposes in the sense of UK taxation law – irrespective of whether the body has in fact been recognised as charitable for tax purposes by the Inland Revenue. Scottish charities with educational purposes should be treated in the same way as other Scottish charities.
• Public trusts which are not “charitable”, in the sense that their purposes do not meet the definition of charitable in UK taxation law, should be defined as “non-registerable public trusts” and should be subject to a “light touch” version of the main statutory regime for Scottish charities.
• A new definition of “benevolent organisation” is proposed: a body which is established under the law of Scotland, or managed or controlled wholly or mainly in or from Scotland, and whose purposes are “charitable, benevolent or philanthropic” (within the meaning of the existing legislation governing public charitable collections) but not “charitable” (in the sense of UK taxation law). “Benevolent organisations” seeking to raise funds should be subject to an adapted version of the main supervisory regime for Scottish charities.

Public Information

• A definitive public register of Scottish charities should be set up, to be maintained by a Registrar of Scottish Charities, with all Scottish charities being obliged to register, regardless of size.
• “Benevolent organisations” should be obliged to register with the Registrar of Scottish Charities as a precondition of participating in the proceeds of a public charitable collection.
• Annual accounts and reports of Scottish charities (and of registered benevolent organisations) should be made available to the public via the register.
• The Registrar of Scottish Charities should maintain a register of persons removed by the Court of Session from positions of management or control.

Standard-setting

• Detailed standards should be set by regulation of the Scottish Executive rather than by primary legislation and should so far as possible apply to all organisations subject to the system, with a minimum of exceptions (other than for small charities).
• In all appropriate areas specific standards, such as accounting requirements, should be harmonised on a UK-wide basis.
• General guidance for charities should be authorised by the Scottish Executive in addition to the general and specific standards set by primary and secondary legislation.

Monitoring

• The Scottish Charities Office, as the main dedicated monitoring agency, should be sufficiently resourced to enable full use to be made of the Lord Advocate’s powers under the legislation.
• All Scottish charities (and registered benevolent organisations) should be required to submit accounts annually to the Registrar of Scottish Charities.
• Only local organisers authorised by a registered benevolent organisation or registered Scottish charity should be entitled to apply to a local authority for permission to collect. Central exemptions from local authority permission for national organisations should be discontinued.
• The provisions for the sharing of information between supervisory institutions should be strengthened.

Facilitation

• The Registrar of Scottish Charities should act as the first point of contact for charity enquiries, should facilitate access to the other supervisory institutions as appropriate, and should disseminate authorised general guidance for charities.
• Those responsible for the management or control of a Scottish charity should be entitled to apply to the Court of Session by an informal, “fast track” procedure for definitive directions on how to proceed in situations of difficulty.
• A rationalised system for the reorganisation of Scottish charities and non-registerable public trusts should be provided, and should make due allowance for the needs of small organisations.

The Diagram outlines a revised institutional structure for the legislative and administrative supervision of charities in Scotland.

Diagram Revised Institutional Structure (new or reallocated tasks in italics)

Scottish Executive Legislation Co-ordination Responsibility for Registrar of Scottish Charities Prescription of information to be held on registers Prescription of accounting/reporting standards (including exemptions) Designation of religious bodies Prescription of standards for public charitable collections Authorisation of general guidance Promoting reorganisations Registrar of Scottish Charities Determination of status for registration as Scottish charity Determination of status for registration as “benevolent organisation” Maintenance of registers: Register of Scottish Charities Register of Benevolent Organisations Register of Persons Removed Provision of public access to registers Management of statistical data Reorganisation of dormant accounts Information/advice on reorganisations   Registration of reorganisations Dissemination of general guidance Facilitating access (1st point of contact) Function-related information/advice Reference of misconduct to Lord Advocate

Lord Advocate Investigation Intervention (provisional) Applying to Court of Session for intervention Monitoring disqualifications Opposing/proposing reorganisations Consent to re-organisational resolutions Cross-border monitoring Function-related information/advice Court of Session Appeals on status for purposes of registration Intervention Approval of schemes for reorganisation Provision of definitive directions Cross-border monitoring Local Authorities & Police Permissions for public charitable collections Monitoring of conduct/results of collections Function-related information/advice Reference of misconduct to Lord Advocate Inland Revenue Administration of tax reliefs Monitoring of non-charitable activities/use of funds and reference to Lord Advocate Function-related information/advice

I should emphasise that these recommendations are those of our research team, and not those of the Scottish Executive. Our research reports are currently being considered by the Scottish Charity Law Review Commission which has been established by the Scottish Parliament to examine how charity law might be modernised to meet the needs of both the charitable sector and the general public in the 21st century.

Publications to which reference is made

• Charity Law Research Unit, University of Dundee: Scottish Charity Legislation: An Evaluation (Edinburgh: Scottish Executive Central Research Unit, 2000). Obtainable from The Stationery Office Bookshop, 71 Lothian Road, Edinburgh EH3 9AZ. (CLRU 2000)
• Charity Law Research Unit, University of Dundee: Public Trusts and Educational Endowments (Edinburgh: Scottish Executive Central Research Unit, 2000). Obtainable from The Stationery Office Bookshop, 71 Lothian Road, Edinburgh EH3 9AZ. (CLRU 2000)
• Charity Law Research Unit, University of Dundee: Public Charitable Collections (Edinburgh: Scottish Executive Central Research Unit, 2000). Obtainable from The Stationery Office Bookshop, 71 Lothian Road, Edinburgh EH3 9AZ. (CLRU 2000)
• Deakin Commission: Commission on the Future of the Voluntary Sector, Meeting the Challenge of Change: Voluntary Sector into the 21st Century (London: National Council for Voluntary Organisations, 1996). (Deakin 1996)
• Kemp Commission: Commission on the Future of the Voluntary Sector in Scotland, Head and Heart. The Report of the Commission on the Future of the Voluntary Sector in Scotland (Edinburgh: Scottish Council for Voluntary Organisations, 1997). (Kemp 1997)

*Dr Christine Barker is Senior Research Fellow in the Department of Law at the University of Dundee, Scotland, and for the past four years has been Director of the University’s Charity Law Research Unit. She played a key role in the Unit’s recently published evaluation of Scottish charity legislation, and has written a number of articles on charity law related subjects.

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.