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NFP Update: when might unfair dismissal law apply to volunteers?

Chris Mills
Solicitor

17 February 2017

Unfair dismissal of volunteers?

Does paying a volunteer an honorarium or reimbursing travel expenses mean they are a worker at law?

Brief Summary

In a recent case of Grinholz v Football Federation Victoria Inc [2016] FWC 7976, the Fair Work Commission (‘the Commission’) was required to consider whether a volunteer coach for a girls’ soccer team was an employee protected from unfair dismissal by the Fair Work Act 2009 (Cth) (‘the Act’). The decision will be of interest to charities and not-for-profits that rely on the assistance of volunteers. The significant factor in this case was that the claimant had entered into an agreement to receive a $6,000.00 honorarium paid in two $3,000.00 instalments; one at the beginning of the season and one at the end. He claimed this honorarium should properly be understood as payment for the work he performed, and that therefore he ought to be considered an employee who could not be unfairly dismissed.

The Commission worked through a number of significant facts to reach the conclusion that the relationship was voluntary rather than an employment relationship. In the following we discuss the background to the case and why it was so unique, the reasoning applied by the Fair Work Commission and some of the lessons that can be learned from the case.

Background to the Case

Mr Grinholz was engaged as a junior soccer coach by the Football Federation of Victoria (‘FFV’) for the 2016 season. The terms of his engagement were set out in a document described as ‘a contract’, signed by Mr Grinholz and a representative of FFV.

The ‘contract’ provided that Mr Grinholz would receive a $6,000.00 honorarium for volunteering to coach the girls, and that he would receive half at the beginning of the season and half at the end. It also required that Mr Grinholz report and provide regular updates to the ‘Technical Director’, attend meetings, participate in personal development, comply with directions given by FFV and ‘satisfy performance criteria’.

Part-way through the season Mr Grinholz forfeited a match without the approval of FFV. Upon learning of this outcome, FFV ended Mr Grinholz’s engagement and refused to pay him the second instalment of his honorarium.

Though none of the documents identified an employment relationship and Mr Grinholz had never been described by any representative of FFV as an employee, Mr Grinholz alleged that he had entered into a contract with FFV and that contract was for the performance of work. He alleged that he was therefore an employee for the purposes of the Act and was protected from unfair dismissal.

Complicating Factors

In our view, the factors that seem to have given rise to this dispute seem to stem from the way the relationship was structured. The fact that Mr Grinholz’s engagement took the form and style of a contract opened the way for him to allege that the relationship was one of employment because logic would have it that the consideration for that contract would be payment in return for work.

In this respect, charities, not-for-profits and sporting clubs are not the same as commercial organisations. It is common for individuals who identify with their purposes and activities to want to make a voluntary contribution, and while it is necessary to manage the risks inherent in engaging and managing volunteers, it is neither necessary nor, in our submission, desirable to structure volunteer appointments as you would a services or employment contract. We will return to this issue when considering the lessons to be gleaned from the case.

Reasoning of the Commission

To determine whether there was an employment relationship, the Commission largely followed the modern multi-factor approach developed by common-law courts and refined under the present industrial relations framework. It therefore considered:

- The degree of control FFV exercised over the manner in which Mr Grinholz performed his work;
- Whether Mr Grinholz was engaged solely to work for FFV;
- The extent to which FFV, and not Mr Grinholz, was responsible for promotional activities;
- The extent to which FFV provided tools and equipment to enable Mr Grinholz to perform his work;
- The extent to which FFV had control over what work could be delegated or subcontracted out;
- Whether FFV had the right to suspend or dismiss Mr Grinholz;
- Whether FFV provided a uniform or business cards;
- Whether FFV withheld an amount for income tax from Mr Grinholz’s pay;
- Whether payment was by way of periodic wage;
- Whether FFV provided Mr Grinholz sick and holiday leave;
- Whether the work involved a distinct trade, profession or calling;
- Whether the employee’s work created goodwill or saleable assets for FFV; and
- Whether Mr Grinholz’s pay was significantly dedicated to paying for expenses.

The Commission noted that the factors fell on both sides of the line, but it is common for amateur sporting coaches to volunteer their time for the love of the game. Further, the Commission considered it significant that, the honorarium was a reasonably close estimate of Mr Grinholz’s travel and food costs for the number of attendances he made during the season.

Lessons from the Case

The Commission observed that the terms of the contract were necessary to protect the standard of coaching performance and reputation of FFV, and that this may be a reasonable objective for charities and not-for-profits who engage volunteers to perform work.

In light of the decision, it may be preferable to avoid using contracts or contract-style documents to manage volunteer relationships. It is possible to restructure the relationships in a way that reflects the community-focused nature of charities, not-for-profits and sporting clubs while preserving high standards. You could consider relying on club rules, risk management procedures and other methods making the nature of the relationship more participatory and voluntary rather than contractual.

This case nonetheless reveals that the Commission is prepared to look beyond the form and structure of the relationship to recognise that people are inclined to voluntarily engage in charitable, community and sporting activities because they are, in and of themselves, good. It arguably suggests a degree of leeway for the third sector.

If you have any questions about your volunteer arrangements or how this case might apply to your organisation, please do not hesitate to contact Chris Mills via cmills@ntlawyers.com.au or on (07) 3837 3600.

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