Out-Law Guide 4 min. read
06 Jan 2023, 12:32 pm
The extent of the rights that volunteers or interns may acquire is dependent on their legal status, meaning whether they are an 'employee' or a 'worker' or a genuine volunteer.
Employees obtain all employment related rights including full protection in relation to time off and the right to claim unfair dismissal on the termination of their contract of employment and rights in relation to family and pregnancy. Workers do not share all these rights, although increasingly statutory rights are also being granted to workers. For example, workers are entitled to be protected under the discrimination legislation and from unlawful deduction from wages. They are also entitled to receive the National Minimum Wage (NMW), be paid annual leave and take rest breaks. However, those who are genuinely self-employed – that is, in business on their own account – have no such rights.
Employment status is determined according to factors such as the level of control that the employer has over the way the individual carries out their activities; the requirement that the individual carry out work themselves and not send a substitute; a mutual obligation for the employer to provide work and the individual to accept that work, and other factors pointing towards an employment relationship such as financial dependence, exclusivity of the arrangement and payment during holiday or sickness absence.
Worker status is increasingly afforded to individuals providing personal services due to the simplicity of the statutory test. In a landmark decision, the Supreme Court in Uber v Aslam and Others decided that two Uber drivers were 'workers' rather than self-employed subcontractors. It described the statutory definition of worker as having three elements:
Whether a volunteer is an 'employee' or a 'worker' will therefore depend on these factors. Merely labelling an individual as a 'volunteer' or 'intern' will not prevent them from acquiring employee or worker status. The Supreme Court also endorsed a purposive approach of looking beyond the terms of any written agreement to the parties’ ‘true agreement’. Employment status of volunteers and interns is therefore not clear cut and will often turn on each individual's circumstances.
Where there is payment or 'benefits in kind', the volunteer or intern will be considered a worker who is entitled to be paid at least the NMW.
HMRC advises that for NMW purposes a genuine volunteer will typically:
Employers may reimburse volunteers and interns for expenses actually incurred, or reasonably estimated as likely to be or to have been incurred. Care should be taken to avoid estimates which are greater than could realistically be incurred. HMRC guidance on charity volunteers cites travel to and from volunteering and the cost of care for dependents whilst volunteering as examples of such expenses. HMRC guidance also states that a one-off gift or reward of a reasonable amount which was unexpected is unlikely to establish NMW entitlement, but regular gifts and rewards should be avoided.
Employers should also note that the promise of a future job offer will also be considered as sufficient consideration to establish that the individual is a worker who is entitled to be paid at least the NMW.
HMRC's charity volunteers guidance states that training is not a 'benefit in kind' if:
However, training outside of this scope may well be considered a benefit in kind for NMW purposes.
It is important to know if, based on the reality of the relationship, the individual is a 'worker' and therefore entitled to the NMW. The consequences of non-payment of the NMW can be serious: the employer could be required to pay six years backdated pay and could face criminal charges if found to have wilfully neglected to pay the NMW. They could also be 'named and shamed' as part of the NMW Naming Scheme.
Some individuals doing work experience are not entitled to the minimum wage because there is a specific exemption in the NMW rules. Details of these are available in government guidance.
It is also important that interns are not confused with apprenticeships, which are covered by separate rules for NMW purposes.
To help with social mobility issues, the UK government now encourages employers to pay interns the NMW rate, regardless of whether they would qualify as a 'worker' for the purposes of the NMW. The Social Mobility Commission has lots of useful resources and ideas for employers and others. Steps are being taken to target the abuse of internships and non-payment of the NMW
Genuine volunteers who are not 'in employment' for the purposes of equality legislation will not be protected from discrimination and will therefore not be able to bring discrimination claims against the organisation they are volunteering for. However, again this is determined by their employment status, which in turn is based on the reality of the relationship.