Whilst organisations typically operate based on hiring staff and remunerating them for their work, charities often function differently, relying on the goodwill and commitment of volunteers. This can, however, create uncertainty when distinguishing whether an individual for a charity is a volunteer, a worker, or an employee. The distinction is crucial, as each category carries different rights and responsibilities. So, how can charities navigate these classifications, and what are the risks of getting it wrong?
Charity Employment Status Explained: Volunteers, Workers and Employees
Under employment law, volunteers, workers and employees each have their own obligations and rights. It is therefore important to ensure that you are clear what status an individual has.
There is no legal definition of a volunteer but the Department of Business and Trade’s guidance describes a volunteer as someone who:
- Has an arrangement with an organisation which does not entitle them to a financial reward or benefit in kind for work they perform under the arrangement.
- Does not have to turn up for work if they do not want to (even if they are expected to or they generally work to a regular pattern).
- Cannot be dismissed, sued for breach of contract or have payment or reward withheld if they fail to do the work or perform the services they were providing.
A casual worker is typically engaged on an ad‑hoc, as‑needed basis, with no obligation on the organisation to offer work and no obligation on the individual to accept it. There is usually no ongoing contractual expectation of work, and they are only paid for the assignments they actually complete. Casual workers do not generally benefit from the full range of employment rights that employees have, although they are still entitled to basics such as holiday pay and national minimum wage.
A casual employee (under a zero hour contract), by contrast, still works irregular or flexible hours but has a clearer, more consistent employment relationship. Even if the work pattern is variable, there is usually some form of ongoing mutual obligation (for example, the organisation regularly offers work and the individual is expected to perform it). As a result, casual employees have the full range of statutory employment rights, including protection from unfair dismissal once qualifying service is reached, statutory notice, and family‑related leave and pay rights.
How the Law Determines Status: Personal Service, Control and Mutuality
For a contract of employment or service to exist, there must be the presence of three fundamental factors:
Personal Service
The individual providing their contribution has to perform the work themselves. They cannot send in another party to complete the work for them. This is perhaps self-explanatory, as employers would not usually expect an employee to ask a friend or family member to complete their shift on their behalf whereas a volunteer serving tea and cake at an open garden event might be able to send along someone in their place if they cannot make it.
Control
The organisation must have some sufficient degree of control as to how the individual completes the work for them. One way of exerting such control is by implementing disciplinary proceedings in the event of non-or-poor-performance.
Mutuality of Obligation
Not only must the individual be obligated to provide their own work or skill, but the organisation must also be obliged to pay a wage or other remuneration.
In the absence of these conditions then an individual will most likely be a volunteer and not an employee or worker. Should you wish to reduce the risk of volunteers establishing employment status, our article here provides some practical tips to define the lines.
Volunteers and Expenses: Avoiding National Minimum Wage Risks
If a volunteer receives any payment (aside from genuine expenses) in return for their volunteering then there is a substantial risk that they will be deemed to be worker or employee.
In order to avoid the risk of an individual losing their volunteer status it is important that any expenses paid to them represent the actual costs legitimately incurred, such as travel and food, supported by evidence like receipts. Expense payments must also be reasonable and therefore not any higher than would realistically be spent.
If any expense payments exceed what might be a reasonable amount, or if payments are made for expenses that were not actually incurred, they could serve as evidence that the volunteer is actually a worker or employee. In this event, they would become entitled to the national minimum wage, which could end up being significantly higher than the amount paid as an expense in the first place.
To avoid these risks, it is recommended that recognised practices are followed such as making use of HMRC approved rates for expenses like mileage. In addition, expenses should be identifiable as an expense – this means avoiding fixed payments or allowances which do not represent the actual cost incurred and obtaining receipts.
Equality and Safeguarding: When Do Discrimination Protections Apply?
Under the Equality Act 2010, individuals who are in ‘employment’ are protected from discrimination, victimisation and harassment in the workplace. Much like the ERA 1996, to be in employment, the Equality Act 2010 requires an individual to work under a contract of employment or a contract personally to do work – protecting both employees and workers.
Volunteers do not fit under this description and are therefore not directly protected. Furthermore, both the UK and European Council have rejected proposals to amend the position to encompass volunteers. As a result, the position is that volunteers cannot bring a claim under the Equality Act 2010 for discrimination, victimisation or harassment. Although they might have protection under the Equality Act 2010 in line with the protection afforded to all individuals engaging with a business.
With respect to sexual harassment, the Labour Party committed to legislate to protect volunteers back in 2024 when it ran in the general election. However, this has not yet come to fruition. In any case, volunteers who are victims of sexual harassment may still have recourse under the common law duty of care and personal injury law, as well as under the Health and Safety at Work etc Act 1974. This is in addition to the Protection from Harassment Act 1997 and Sexual Offences Act 2003.
Whilst the law itself may fail to adequately protect volunteers from discrimination, the National Council for Voluntary Organisations (NCVO) imposes safeguarding provisions onto charities to support a safe working environment. Although they cannot override legal obligations, they set a high standard with a means to protect those who volunteer.
From October 2026, under the Employment Rights Act 2025, employers will be liable for harassment from third parties unless they have taken ‘all’ reasonable steps to prevent this. Third parties typically include individuals who receive an organisation’s services, as well as contractors carrying out work on an employer’s premises, suppliers and volunteers. Charities will therefore be liable for harassment by volunteers. A greater responsibility is therefore placed onto charities to ensure all reasonable steps are taken to prevent volunteers carrying out harassment.
Governance and Documentation: Getting Status Right and Keeping it Under Review
To reduce any risk of misclassification, which could have serious financial consequences, it is crucial that charities clearly document the separation between employees, workers and volunteers.
Not only could this protect the charity against a volunteer who is claiming statutory employment protection, but it may also evidence that any activities carried out are for public benefit and not for private profit.
Charity regulators also expect charities to maintain records as part of good governance. Documenting volunteers therefore supports accountability and transparency, and shows that the charity is well-run and responsible.
Funding opportunities may also be dependent on the ability to evidence a certain number of volunteers and volunteer hours contributed.
When to Seek Legal Advice
Charities should seek legal advice proactively whenever there is a real risk that a volunteer role could become employment or worker status. This could be at the start when new volunteer roles are created, or even at various checkpoints in a charity’s development, such as when certain responsibilities are expanded, or where a charity is undergoing a review or applying for funding.
Where a charity intends to provide volunteers with anything that goes beyond basic expenses, even if only a ‘thank you’ bonus, this can become extremely high-risk and so legal support will be key.
Furthermore, if a volunteer role starts to resemble a paid role, or even where a dispute or complaint arises, legal support will be invaluable to avoid further implications.
At Stephens Scown, our Employment team have vast experience with charitable organisations and can support with employee and volunteer matters, in addition to any other employment and HR queries you may have. For more information, please contact us by calling 0345 450 5558 or by emailing [email protected].
This article was co-written by Hazel Sanders, senior associate and Joey Medway, solicitor apprentice in our Employment team.