A recent Fair Work Commission decision in a dispute between the coach of a children's sporting team and a state sporting organisation has led to some analysis on the important distinction between employee and volunteer relationships at sporting organisations.
It is important for sporting organisations to be aware of these differences to avoid problems or unexpected consequences if the Fair Work Commission or a court characterises the relationship as one of employee and not volunteer.
The decision is a useful reminder of the factors that are relevant in determining whether a person is engaged as a volunteer or employee, in the context of a sporting organisation.
The coach of an under 13 junior sport team was suspended in August 2016, two months before the end of the season. In response, the coach filed an unfair dismissal application with the Fair Work Commission (Commission).
The sporting organisation objected to the application on the grounds that the coach was a volunteer and not an employee (volunteers are not covered by Australia's unfair dismissal laws).
What indicates whether an individual is an employee or volunteer?
The Commission set out criteria that will generally indicate that a person is an employee rather than a volunteer, including whether the:
- individual works solely for the sporting organisation;
- sporting organisation exercises (or has the right to exercise) control over the manner in which work is performed, the location and hours of work;
- sporting organisation deducts income tax from the remuneration paid to the individual;
- individual is paid by periodic wage or salary;
- sporting organisation provides paid holidays or sick leave to the individual; and
- individual's work creates goodwill or saleable assets for the sporting organisation's business.
In this case, there was a written document called a "voluntary services agreement" that had been signed by both parties. Under the terms of that agreement, the coach received an honorarium of $6,000. The agreement explicitly said that the honorarium was payable to assist with the coach's travel, accommodation and other out of pocket expenses. It was not a payment in exchange for his coaching services and no tax was deducted.
The Commission concluded that the contract between the parties showed a mutual intention to form a volunteer relationship, rather than a relationship of employer/employee. The fact that the sporting organisation was a not-for-profit entity that organises team sport was an important consideration in this regard.
Why does it matter?
If an individual is an employee rather than a volunteer, they will be entitled to a number of statutory entitlements that volunteers are not entitled to, including:
- payment of a minimum wage;
- leave entitlements;
- superannuation contributions; and
- notice of termination.
Volunteers are an integral part of many not-for-profit sporting organisations. If you intend to engage coaches or staff as volunteers, it is critical to ensure that the individual is not unintentionally engaged as an employee. The existence of a written "voluntary services agreement" in this case was important because it captured the mutual intention of the parties. Regardless, it is also important to keep in mind that if the relationship is actually one of an employee rather than a volunteer, then the organisation will be bound by law to provide them with employee entitlements.
If you are unsure whether your coaches or other staff are engaged on a volunteer basis, it may well be worth reviewing your current volunteer service agreements.