Managing and involving people

People are a valuable part of community organisations. There are various ways people can be involved with your organisation, such as being on the committee, a member, employed by the organisation, a volunteer, funder, or an independent contractor.

The people involved

People are a valuable part of community organisations. There are various ways people can be involved with your organisation, such as being on the committee, a member, employed by the organisation, a volunteer, funder, or an independent contractor.

Special legal obligations and rights apply to each of these relationships. It can sometimes be hard to identify which of the relationship applies, and in some cases one person may be engaging with your organisation in several ways.

Employee, contractor or volunteer?

It is important for your community organisation to know which category of worker (pdf, 749KB) is undertaking work in your organisation. This is because different legal entitlements and obligations apply. The legal distinction between a worker who is an 'employee' and a worker who is an 'independent contractor' or ‘volunteer’ is not always easy to make.

Definitions relating to the differences between employee, independent contractor and volunteer are listed below.

Employee

Not-for-profit community organisations have the same legal obligations as any employer to their workers. There is a lot of information available on employment law, but it can be hard to know what is useful and where to start - especially when you have a question you need addressed urgently.

Information on employment law is available through the Justice Connect website and is designed to assist organisations to understand the legal framework and identify issues when they arise. The law surrounding employment is complex and it changes sometimes, so the information in these pages shouldn't replace advice from a lawyer who specializes in employment law.

As a general rule, the level of control exercised over the worker by the organisation will be the most important factor. If the worker is directed and supervised in their duties on a day-to-day basis, then it is more likely that the worker is an ‘employee’. However, this not a determinative test.

A 'worker’ will normally be found to be an ‘employee’ when the following elements exist:

Type of work  Payments and benefits 
Performs ongoing work under the control, direction and supervision of the employer. Is paid for time worked.
Must perform the duties of their position. Is paid regularly (ie. weekly, fortnightly or monthly) and has income tax withheld from their salary by their employer.
Provides their personal services and cannot delegate their work to ‘outsiders’ (ie. arrange for their work to be done by someone else who is not another employee). Is entitled to have superannuation contributions paid into a nominated superannuation fund by their employer.
Works hours set by the employer, a workplace agreement or an industrial award. Is entitled to paid and unpaid leave (eg. sick leave, personal/carers' leave, annual or recreation leave, or long service leave).
Is recognised as a part of the employer's business and/or holds themselves out to the public as being part of that business (eg. wearing a uniform, using a business card). Is covered by professional indemnity, public liability and workers compensation insurance premiums paid by the employer.
Does not take commercial risks and cannot make a 'profit' or 'loss' from the work performed. Generally has all 'tools of the trade' provided by the employer to carry out the work (eg. desk, computer, stationary).

Volunteer

Volunteers are important to not-for-profit organisations. Many not-for-profits are run entirely by volunteers. While the definition of a ‘volunteer’ may vary a little depending on who you ask, Volunteering Australia defines volunteering as an activity with the following characteristics:

  • to be of benefit to the community and the volunteer,
  • of the volunteer’s own free will and without coercion,
  • for no financial payment or gain, and
  • in designated volunteer positions only.

From these definitions, we can work out some generally accepted attributes of volunteers:

 Type of work Payments and benefits 
Works or provides services on an ‘ex-gratia’ basis, which means that they do so voluntarily, without a legally enforceable obligations to do so. Generally, has no legally enforceable right to receive payments such as honoraria, allowances or expenses.
The agreement between the volunteer and the organisation (whether verbal or written) does not contain any evidence that the parties intended to enter into a legally binding contract. May be reimbursed for out-of-pocket expenses.
The volunteer arrangement can end at any time, either by the volunteer or the organisation. May receive payments like an ‘honoraria’, or allowances, or non-cash benefits such as free use of facilities or free or reduced price entry into an event. However, such payments or benefits may attract taxation obligations, and if regularly received and/ or of considerable value, may add weight to an argument that the ‘volunteer’ is an employee or contractor.

Independent Contractor

There are many circumstances where a community organisation may wish to engage an independent contractor or consultant to provide services to the organisation. This may be when the organisation has a short term project which it requires someone with specialist skills to complete, such as an independent evaluation of the organisation’s services or programs.

The legal test to determine whether a worker is an employee or an independent contractor requires consideration of a number of different elements of the working relationship. Unlike employees who are seen to be subject to the control and direction of their employer, independent contractors are often perceived as running their own business and provide services under commercial, rather than employment, contracts.

A worker will normally be found to be an 'independent contractor' when the following elements exist:

 Type of work Payments and benefits
has control over how to carry out their work and has the expertise to do so  is paid for results achieved (for example, submits an invoice for work completed or is paid at the end of a project)
also provides services to the general public and other businesses pays their own superannuation and GST and holds own insurance policies
is contracted to work for a set period of time or do a set task and can decide what hours of work are required to complete that work may have their own registered business and Australian Business Number (ABN)
is free to accept or refuse work beyond the requirements of any current contract with the organisation  provides all or most of the necessary materials and equipment to complete the work (for example, uses their own tools)
is usually free to delegate work to others  is in a position to make a profit or loss from work

Screening and engaging volunteers

Recruiting and engaging volunteers raises a number of important legal issues for organisations.

When recruiting workers of any sort for your organisation, there may be some legally required background checks (pdf, 149KB), as well as other checks that are recommended as part of the organisation's duty of care. For example, if you have not completed background checks the organisation may be liable for damage incurred by someone working for your organisation. Screening workers appropriately for their position is critical, such as by running Working with Children Checks (WWC Checks) where applicable, National Police Record Checks, as well as other reference and qualification checks.

Each state and territory has a different regime in place in relation to WWC Checks and many funding agreements may also require particular checks to be obtained for all volunteers.

Working with Children Check

A Working with Children Check is a legal requirement for workers who will have contact with children during the course of their work with your organisation. The Working with Children Check is administered by the Department of Justice (DOJ).

Employees, volunteers and independent contractors who will be undertaking 'child-related work’ must not commence in that role without a Working with Children Check (WWC Check).  The Victorian Working With Children Act 2005 defines what is 'child-related work’.

National Police Record Check

If your organisation wants to require an applicant to provide a National Police Certificate, you need to contact Victoria Police. Victoria Police will not provide information about an individual's criminal history without that person’s written consent.

While screening is important, it is also important to not discriminate in the recruitment of volunteers based on screening. There are legal protections against discrimination on the basis of particular protected attributes such as age, sex, marital status, disability and race and also an irrelevant criminal record.

Volunteer agreement and role description

volunteer agreement (pdf, 172MB) is an important part of engaging volunteers, helping to make sure the volunteer understands their rights, role and responsibilities. It is also important from a risk management perspective – it can help your organisation show when a volunteer is acting within their role or outside their role.

There is no legal requirement for a written agreement with a volunteer, however you may find that a written agreement, clearly defining roles and responsibilities so that the organisation and the volunteer understand what both parties expect of each other will assist if there is a dispute or may help prevent disputes taking place.

Managing disputes

Your association’s rules should set out the grievance procedure for resolving disputes between members or between the association and any of its members. If your rules do not include a grievance procedure then the grievance procedure set out in the model rules for incorporated associations will automatically apply.

Internal disputes

Internal disputes are the disputes that occur between management, between the board and members, between members, and even between employees.

External disputes

External disputes are where your organisation as a whole is in a conflict situation with another person or organisation, such as a service provider, a landlord, a client, a partner or someone who believes they have suffered loss because of your organisation (such as through negligence or defamation). It is very important to take proper steps when disputes arise, and this site can only provide information. In disputes and conflicts, especially where there are significant risks or your organisation is being taken to court, you may need the assistance of a lawyer.

Mediation

If you can't sort out a disagreement or conflict among the people involved, mediation is a useful way to try to resolve disputes, without resorting to legal action. Mediation allows for parties to be heard by a mediator, who can that conciliate the dispute. A mediator cannot make a binding determination, but parties can agree to resolve a dispute after mediation.

Handy links

Volunteering Victoria:

Justice Connect:

Department of Justice and Regulation:

Last updated: Tuesday, 2 August 2016, 4:00 AM