Recent Labour Inspectorate investigations found New Zealand employers are taking advantage of schemes such as Willing Workers on Organic Farms (WWOOFers). These schemes generally involve seeking travellers working for free in exchange for accommodation, and sometimes food.
Many employers were incorrectly treating such workers as volunteers in order to save on labour costs, and circumvent the protections and benefits available to employees.
In some situations, workers will genuinely be volunteers, but in many, the lines are blurred and the worker is actually performing work as an employee.
Disingenuous working arrangements exploit workers and unfairly disadvantage businesses that comply with the law. Employers who take advantage of vulnerable workers are liable for penalties and other sanctions.
Volunteer or employee?
Section 6 of the Employment Relations Act 2000 (the Act) defines an employee as “a person of any age employed by an employer to do any work for hire or reward under a contract of service”. In the case of WWOOFers, reward could arguably include accommodation and/or food.
Section 6(2) of the Act states that when the Employment Relations Authority (ERA) or Employment Court is tasked with deciding whether a worker is an employee or volunteer, the determinative question is what is the real nature of the relationship?
In answering this question the ERA or Employment Court will consider the intention of the parties, along with whether;
the worker is paid or rewarded for their work;
the worker expects to be paid for their work;
the business is making an economic gain from their work;
their work is integral to the business; and
the worker’s hours are controlled.
None of these factors are decisive on their own. A decision will be based on whether the relationship, looked at holistically, is more akin to that of an employee or a volunteer.
A worker found to be an employee will be treated as though he/she was an employee from the commencement of the relationship.
This means that the employer will be liable to pay all minimum entitlements, including holiday pay and minimum wage. The employee will also be able to bring personal grievance claims where there are grounds to do so, for example where the relationship is terminated without good cause.
It is therefore important to ensure that the proper distinction is made prior to taking on staff who are intended to be volunteers.
Practical tips to ensure the line isn’t crossed
If you wish to take on volunteer workers and want to ensure that you aren’t exposing yourself to liability as an employer, the following points should be observed:
- Make it clear that there is no mutual intention to enter into a binding, legal relationship;
Use documentation at the beginning of the relationship which clearly states that the worker is a volunteer;
Keep the obligations of the volunteer to a minimum. This means making it clear that the volunteer is free to leave at any time, decline requests to work and is not required to commit for a minimum time period; and
Any money or benefit received by the employee should not be an attempt to reward the volunteer for the work done. Any money given to a volunteer should be for out-of-pocket expenses.
The advice above is useful only as a guide and each situation will depend on its facts. We suggest taking advice if you are unsure of the status of your workers. The Employment Team at Cavell Leitch are happy to assist.
Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.