Thank you for attending our recent webinar.
Following the end of the webinar, several questions have been submitted to our Panel of experts. Those questions, along with their answers can be found below. To reveal the answer simply click on the + symbol at the start of each question.
If you have any further questions regarding the webinar or would like to keep up to date with future webinars or events, please contact Jason McAuley by e-mail [email protected] who will be happy to get in contact with you when our next date is announced.
The Event Team
Griffiths & Armour Insurance Brokers
“If an Honorary Treasurer missed out on claiming a discretionary government or local authority grant because he/she was unaware or did not claim in time, could he/she be held responsible for any financial losses incurred by the organisation?”
In a word, yes. Although the Charity Commission guidance stipulates that the trustee board are collectively responsible for the charity in question (including its finances), invariably the Honorary Treasurer will often be at the centre of financial decision making and management. Therefore, the office of Treasurer will often (although not always) be the focus for any financial complaint since their role is instrumental in the board’s duty to ensure that financial resources are properly controlled and accounting records kept in line with legal and regulatory requirements. Part of that duty would extend to being aware of how the organisation could financially benefit from discretionary schemes and if that opportunity was missed then the Treasurer, as well as other trustees, may in principle be held personally liable for any financial loss caused as a consequence of their failure to act.
The law generally protects trustees who have acted honestly and reasonably from personal liability to their charity and both the Commission and the courts have shown a reluctance to hold those to account who have not only behaved honestly and reasonably but who have also not benefited from their actions. At the same time, the Courts have rarely enforced liability on an unpaid trustee/Treasurer who has made an honest mistake. However, there are notable and significant exceptions which should not be underestimated. It is important to note that the Commission and the Court expect higher standards from trustees including Treasurers who act in a professional capacity or who are paid for their role. For those Treasurers who are experienced financial professionals who fail to access a discretionary scheme or grant either by lack of knowledge or mismanagement then the greater the likelihood that the Court/Commission will pursue that individual and hold them personally responsible for any loss that the organisation suffers as a consequence.
"The question of ‘when is a volunteer an (unpaid) employee’ seems unclear, and it would be useful to have some definitive guidance on this. On the one hand, there is the argument that everyone who acts under the control and direction of an organisation (i.e. almost all volunteers) is an employee (albeit maybe unpaid), but the post webinars notes refers to volunteers and employees as separate, and by implication not all volunteers are employees, so what is the criteria by which a volunteer might be considered not an employee, but still be covered by the organisation’s relevant insurance policies?"
The team at BLM have looked at this from both an employment law and claims perspective respectively.
From an employment law perspective the legal status of a volunteer is not clear-cut. There is a vast range of different types of relationships, from the purely voluntary to those that are clearly contractual and those in between, which are difficult to define. This ambiguity often makes it difficult for organisations taking on volunteers to ascertain with certainty any legal obligations that they may owe them.
It is possible that for legal purposes, a volunteer could be considered:
- A volunteer
- An employee
- A worker
- In employment
Employment status will essentially depend on the facts of the case. Depending on their status, the volunteer may be afforded different legal protections as follows:
For a volunteer to be considered an employee under the Employment Rights Act 1996 and therefore have rights such as unfair dismissal and the right to a redundancy payment then they need to be engaged under a ‘contract of service’ which can be either oral or in writing
Case law has established the following factors as key indicators of an employment relationship:
- An agreement exists to provide the servant’s own work or skill in the performance of service for the master (personal service) in return for a wage or remuneration (mutuality of obligation).
- There is control of the servant by the master (control).
- The other provisions are consistent with a contract of service.
Even if this test cannot be satisfied the volunteer could still have worker status if they work under a contract whereby the individual undertakes to do or perform personally any work or services for your organisation. This will afford them rights such as entitlement to the national minimum wage and under the Working Time Regulations.
Case law has established that the following factors are necessary to establish that an individual is a worker:
- Personal service. Essentially there is a requirement for the worker to perform work personally.
- The status of the “employer” under the contract is not that of a customer of a business undertaking carried on by the individual.
- Mutuality of obligation i.e. an obligation of the organisation to provide work and for the worker to carry it out essentially.
The volunteer may also have protection against discrimination, victimisation or harassment in the workplace if they are ‘in employment’ for the purposes of the Equality Act 2010 (‘the EA 2010’).
The definition of “employment” to afford protection under the EA 2010 is wider and includes:
- A wider category of individuals who are genuinely self-employed, provided that their contract obliges them to perform the work personally: in other words, if they are not permitted to sub-contract any part of the work or employ their own staff to do it.
The volunteer does need to have a legally binding contract at least therefore to be afforded protection as ‘in employment’ and therefore afforded rights under discrimination law. The contract would need to create obligations on the part of the volunteer and/or organisation (e.g. the volunteer agrees to volunteer to perform certain tasks, at specific times or for a minimum period; the organisation agrees to repay expenses or training) for the volunteer to ‘be in employment’ for discrimination purposes.’
From a claims perspective, in order for the statutory “employer” obligations to apply there has to be a contract of employment – even if there is only one. That doesn’t mean that H&S obligations don’t exist because there isn’t a technical employer as the HSE guidance is clear that even where there is no technical “employer”, ie for volunteers, the same level of care should be taken.
However, if your organisation is an “association” it makes your status unique. There are complex and specific rules which have been subjected to Court of Appeal decisions regarding unincorporated associations. We would need to establish if the volunteer is classed as a member of the association or whether they are a third party.
Generally a member of an unincorporated association cannot sue the association but an analysis needs to be undertaken of the constitution to determine whether it truly falls within that definition. We would need to consider the written constitution together with minutes of meetings and AGM’s and understand the committee structure and whether there are co-opted members to advise further. It is not uncommon for associations to be made up entirely of volunteers and they can be either members or not.
Subject to analysis of the constitution’s construction and effect, we would need to consider if it creates a special class of rule or responsibility to detract from the usual rule of liability between an unincorporated association and its members (whether or not elected members on the executive or ordinary members).
So in essence, arguably there is no “employer” as there is no separate legal identity for an association. However, each case needs to be considered on the facts taking into account the above. This rule does not detract from liability of the association to a third party and a volunteer could fall into either category.
We understand that this is not a straightforward answer and will be happy to discuss further with any delegates that wish to do so.
Please contact one of our Panel members, Donna Rawling via e-mail [email protected] who will be happy to assist further.