01/08/2012

By Carol Smith, Senior Employment Consultant at Croner

There are many benefits to introducing volunteers, interns and apprentices into the workplace. However, it can be a minefield for SME employers.

Volunteers

There is no formal legal definition of a volunteer, but it is generally thought that a volunteer is someone who spends time, unpaid, doing something for the benefit of a third party. It is important to note that genuine volunteers do not have any employment rights and protections.

If a volunteer claims at tribunal that they are a worker or employee they will need to establish entitlement to any of these rights. They will need to do this by showing that they have a contract with the organisation concerned. This does not need to be in writing.

There are a number of areas that an employer could trip up on:

- Volunteers are always paid expenses (in which case they are more likely to amount to pay and the volunteer may be an employee or worker)

- They are obliged to volunteer at specific times for a specific period and is entitled to give and receive notice of termination (in which case there may be control and/or mutuality of obligation)

- Volunteers are provided with training as part of their role (this could amount to a benefit in kind)

- Any standard guidelines exist that create mutuality of obligation

- Reimbursement for loss of earnings for time spent volunteering creates an obligation personally to perform the work

- Gifts are given that could amount to consideration (which is a factor in a binding contract)

- A uniform or equipment is provided (this could lead to worker status).

Wrongly categorising an individual as a volunteer, and therefore not according him or her their rights and protections, could have serious consequences. For example, if the individual is found to be a worker, an organisation could be liable for up to six years’ backdated NMW. If the individual is, on the other hand, found to be an employee, he or she will then potentially have the employee rights referred to at the beginning of this article, such as the right to claim unfair dismissal, rights in relation to statutory redundancy payments, and so on.

If you use volunteers it may be helpful to draw up a “letter of understanding” which states the intended arrangement, confirmation that there will be no pay, and uses flexible, non-contractual sounding language like “suggested”.

Interns

As with volunteers, there is no legal definition of an “intern” and the term is used to cover many types of work experience arrangements. In general, though, the term describes graduates entering the labour market who want to gain some experience of a particular profession. However, in terms of legal status, “interns” can be employees, workers or volunteers.

A good rule of thumb is that interns will generally be at least workers (if not employees) and therefore entitled to the NMW unless they are volunteers or students undertaking work placements of up to a year as part of a further or higher education course. As stated above, failure to pay interns the NMW could have serious and expensive consequences.

Organisations should document their arrangements with interns using either a short-form fixed-term contract of employment (for interns paid the NMW or more) or a work experience letter of understanding (for volunteers).

Apprentices

Apprenticeships are fixed-term working arrangements involving on-the-job training under certain “frameworks”. There are two types of contracts under which an apprentice may be engaged: a common law “contract of apprenticeship” and an “apprenticeship agreement”.

Both types of apprentice are entitled to a special NMW (£2.60 per hour at present, rising to £2.65 from 1 October 2012) if they are under 19 or 19 and over but in their first year of apprenticeship.

The definition of a “contract of employment” in the Employment Rights Act 1996 includes a contract of apprenticeship, so apprentices working under them (which can include “modern apprentices”) are employees. Apprentices engaged under these contracts also have a number of extra protections such as:

- protection from premature termination

- a higher threshold for misconduct

- a restricted definition of “redundancy”

- the right to enhanced damages.

Apprenticeship agreements are the same as ordinary contracts of employment but do not bring with them the enhanced protections of the contract of apprenticeship. All apprentices have protection from discrimination.

As the modern workplace continues to evolve we are likely to see more tribunal cases involving volunteers, interns and apprentices. In the meantime, though, to avoid problems, SME businesses should conduct thorough audits of their current practices and make any necessary adjustments.