Employees v contractors v volunteers - understanding the spectrum

Transcription

1 Employees v contractors v volunteers - understanding the spectrum October 2014 Facilitator: Kate Fazio Presenter: Liz Morgan PO Box Melbourne VIC Tel Fax justiceconnect.org.au/nfplaw

2 About Justice Connect Not-for-profit Law service Website: Phone: (Victoria) (NSW) Our services: Legal information factsheets on common legal issues Legal training for community groups Law reform work aimed at reducing unnecessary NFP regulation Phone advice to answer quick legal questions** Referral to a lawyer to assist with complex legal issue** ** These are very limited services, available for eligible organisations only: see 2

3 Introduction

4 Introduction the infinite variety of human affairs means that work relationships present as a spectrum, some of which are clearly relationships of employment and others of which are clearly relationships of independent contract [and some of which are clearly volunteer relationships] but some of which are less clear cut French Accent v Do Rozario [2011] FWAFB 830 (with colour emphasis and words in italics added by me!) 4

5 Introduction Spectrum Potential or spontaneous volunteers Traditional volunteer Mutual obligation volunteering / work (related to government payment or court order) Unpaid work Employment relationship Contract of service Contractor relationship Contract for services Member of public Spontaneous Volunteer Volunteer Voluntary work under Court Order Work activity for Govt. payment Work for the dole Work experience Voluntary work Green Corps Vocational placement or Internship / work experience or Unpaid work trial Casual employee Fixed-term contract employee Permanent employee Independent contractor or consultant 5

6 Introduction What we will cover today Part A: Employee, contractor or volunteer: a 3 step test Part B: Why the differences are important Part C: The implications of other forms of unpaid work Please ask questions along the way!! 6

7 A. Employee, contractor or volunteer?

8 Employee, contractor or volunteer Step 1 Is there a contract? Step 2 Yes If yes, what kind of contract is it? Step 3 Contract of service? Contract for services? Volunteer Employee Independent consultant No Other? Member of public 8

9 Employee, contractor or volunteer Step 1 Is there a contract? Step 2 Yes If yes, what kind of contract is it? Step 3 Contract of service? Contract for services? Volunteer Employee Independent consultant No Other? Member of public 9

10 Employee, contractor or volunteer Step 1: Is there a contract? A few preliminary points: A written document is not necessary a contract can be verbal or inferred from conduct You do need consideration, but it doesn t have to be money Substance is more important than form Court will look at the whole relationship over time 10

11 Employee, contractor or volunteer Step 1: Is there a contract? 3 things are needed to show a contract Intention to create legal + Consideration + relations Mutuality of obligation = contract 11

12 Employee, contractor or volunteer Step 1: Is there a contract? Some case examples: Case example: the volunteer and the horseriding camp Teen Ranch Pty Ltd v Brown (1995) 87 IR 3068 NSW SCA Case example: the camp caretakers Morris v Anglican Community Services (2000) SA IRC 24 12

13 Employee, contractor or volunteer Step 1 Is there a contract? Step 2 Yes If yes, what kind of contract is it? Step 3 Contract of service? Contract for services? Volunteer Employee Independent consultant No Other? Member of public 13

14 Employee, contractor or volunteer Step 2: If a contract exists, what kind of contract? The ultimate question: In determining whether a worker is an employee or an independent contractor, the ultimate question is whether the worker is the servant of another in that other s business (= employee) or whether the worker carries on a trade or business of his or her own behalf (= independent contractor) French Accent v Do Rozario [2011] FWAFB

15 Employee, contractor or volunteer Indicia E IC Indicia E IC Work performed under supervision/ control of employer Right to suspend or dismiss Worker is presented as a representative of NFP Periodic wage or salary Holiday and sick leave Superannuation treatment Tax treatment Runs own business or enterprise Does work for others Work can be delegated or contracted Own tools and equipment used / separate workplace Agree set hours and invoice for completed work Remuneration spent on business expenses Goodwill / profit / risk 15

16 Employee, contractor or volunteer Step 2: If a contract exists, what kind of contract? A few case examples Case example: the hospital bed fixer Tsolacis v St Vincent's Hospital (Melb) Ltd [2013] FWC 5221 IC Case example: the off-site interpreters and translators On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366 E 16

17 Employee, contractor or volunteer Step 1 Is there a contract? Step 2 Yes If yes, what kind of contract is it? Step 3 Contract of service? Contract for services? Volunteer Employee Independent consultant No Other? Member of public 17

18 Employee, contractor or volunteer If contract of service, what does this mean? If the indicia reveal a contract of service, then the person has been engaged as an employee The Fair Work Act 2000 (Cth) applies to employees ** Further analysis may be required to determine whether the employment is casual, fixed term, or ongoing Under the Fair Work Act, employees have a legal right to various entitlements (to be discussed in next part). 18

19 Employee, contractor or volunteer Step 1 Is there a contract? Step 2 Yes If yes, what kind of contract is it? Step 3 Contract of service? Contract for services? Volunteer Employee Independent consultant No Other? Member of public 19

20 Employee, contractor or volunteer If contract of service, what does this mean? If the indicia reveal a contract for services, then the person has been engaged as a contractor The Independent Contractors Act 2006 (Cth) applies to independent contractors Independent contractors can enforce terms of the contract and may also have entitlements under common law, Fair Work Act and other legislation (we will discuss in next part). 20

21 Employee, contractor or volunteer Step 1 Is there a contract? Step 2 Yes If yes, what kind of contract is it? Step 3 Contract of service? Contract for services? Volunteer Employee Independent consultant No Other? Member of public 21

22 Employee, contractor or volunteer Step 2: If no contract, what s the person s status? If there is no contract and the person is undertaking voluntary tasks for the NFP they are probably a volunteer No set definition of volunteer in law or legislation Will generally be found to be a volunteer relationship if: The parties did not intend to create a legally binding relationship The person is under no obligation to attend the workplace or perform work The person doesn t expect to be paid for their work 22

23 Employee, contractor or volunteer Step 2: If no contract, what s the person s status? It is possible that the person may have some other kind of status - such as an intern or work experience student we will discuss these further later in session Because your organisation may be legally responsible for the actions of your volunteers, it is also important to distinguish a volunteer from a member or the public (who may spontaneously volunteer) 23

24 Employee, contractor or volunteer Top tips: Be clear about the basis on which your organisation is engaging someone: analyse the role and the work required and determine the best fit Documentation is not enough, but is good evidence: have written contracts for employees, independent contractors; and consider a volunteer agreement Be clear and consistent in use of language: use volunteer reimbursement, we would be pleased if you would instead of pay, salary contract or you must 24

25 B. Why the differences are important

26 Why the differences are important Mr Bell says Mr de Castella owes him $100,000 in wages for 20 months work but Mr de Castella says Mr Bell was a volunteer and declined to accept money so as not to affect a disability pension Alice Springs News Online 18 June

27 Why the differences are important Legal rights of various people engaged Issue Contractor Employee [ongoing or fixed term] Casual employee Volunteer Payment for work National Employment Standards /award etc. Superannuation possibly 1 Workers compensation possibly 2 Paid sick and annual leave Paid long service leave 3 Termination rights Contractual Redundancy / Unfair dismissal Unfair dismissal 4

28 Why the differences are important Further issues In addition to entitlements, there are other legal issues which will turn on status of person engaged: Insurance Occupational / worker health and safety laws Vicarious liability for actions of worker Equal opportunity laws Other benefits (Government payments / visas) 28

29 Why the differences are important Top tips: The law applies differently to different categories of people: being clear about status helps protects the rights and safety or people involved in your NFP Wrongly classifying someone is a financial risk for your organisation: seek advice early if you are unsure about the basis on which you engage a person to do work Think carefully about insurance: workers comp. covers employees only; you may require contractors to have their own; do you have volunteer personal accident insurance? 29

30 C. The legal implications of other forms of unpaid work

31 Other forms of unpaid work Step 1 Is there a contract? Step 2 Yes If yes, what kind of contract is it? Step 3 Contract of service? Contract for services? Volunteer Employee Independent consultant No Other? Member of public 31

32 Other forms of unpaid work Spectrum Potential or spontaneous volunteers Traditional volunteer Mutual obligation volunteering / work (related to government payment or court order) Unpaid work Employment relationship Contract of service Contractor relationship Contract for services Member of public Spontaneous Volunteer Volunteer Voluntary work under Court Order Work activity for Govt. payment Work for the dole Work experience Voluntary work Green Corps Vocational placement or Internship / work experience or Unpaid work trial Casual employee Fixed-term contract employee Permanent employee Independent contractor or consultant 32

33 Other forms of unpaid work Student placements (vocational) Unpaid work trials Internships / work experience Refer Fair Work Ombudsman factsheets: 33

34 Other forms of unpaid work Mutual obligation volunteers Work for the dole / Green Corps etc 34

35 Other forms of unpaid work Top tips: Consider having a people engagement policy : to guide your NFP about what the law says about the people you might want to do work for your NFP Again, think carefully about insurance for unpaid workers: workers compensation insurance only covers employees - ensure others are covered Expect a rise in government-required volunteering and unpaid work: this appears to be an emerging trend and if your NFP is interested - it needs to have the legals clear! 35

36 Summary, questions and evaluation

37 Summary and questions What we have covered today Introduction Part A: Employee, Contractor or Volunteer: A 3 step test Part B: Why the differences are important? Part C: The implications of other forms of unpaid work Summary, questions, close 37

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39 Not-for-profit Law 39

40 NFP Law Info Hub: 40

41 Summary and questions Stay online for an interactive Q&A chat session with Kate and Liz Type your questions into the question panel 41