By Ted Besley

Recently the coach of a children’s soccer team attempted to claim unfair dismissal in the Fair Work Commission.  The case highlighted the need for organisations to be clear about their worker’s volunteer and/or employee status.

Recent Decision of Fair Work Commission (‘FWC’)

The FWC’s decision in Grinholz v Football Federation Victoria Inc [2016] 7976 (‘Grinholz’) underlines the need for organisations, particularly not-for-profits, to clearly characterise the arrangements under which people work for them. Grinholz also gives further guidance over the indicia which the FWC look at in determining whether or not the relevant work arrangements point to an employment relationship.

In Grinholz, the FWC found that the relationship did not amount to employment and therefore the worker was not entitled to protections afforded by the Fair Work Act (‘FWA’) such as unfair dismissal, adverse action and enforcement of entitlements.

The facts in Grinholz

Mr Grinholz was a coach for a girls’ soccer team whose club operated under the Football Federation of Victoria Inc. Under a document styled as a voluntary agreement, he was paid an honorarium for his services. The agreement also covered matters such as Mr Grimholz’s obligations to attend team training, matches and competitions as well as meet with other coaches and club administrators. Mr Grinholz’s honorarium was paid in two instalments – one at the beginning and the other at the end of each season.

Towards the end of the 2016 season, and prior to the payment of the second instalment of his honorarium, the club terminated Mr Grinholz’s role. He brought an unfair dismissal application under the FWA which the club opposed on the basis that he was merely a volunteer and not employed by them.

The FWC’s consideration

The FWC considered indicia of employment enunciated in Abdalla and followed in Jiang Shen Cai, including:-

• The degree of control, or right to control, the employer has over the manner in which work is performed by the employee;
• Whether the employee only works for that employer;
• Whether the employee is required to promote the employer’s business;
• Whether the employee is required to observe the employer’s policies and procedures;
• Whether the employee is paid by wage or periodic payment;
• Whether the employee is afforded leave and other entitlements; and
• Whether GST, income or other taxes are withheld by the employer.

Having regard to the above, the FWC found that Mr Grinholz’s circumstances had characteristics of both employment and voluntary work. On one hand, the club exercised a degree of control over him, required him to wear its uniform and abide with employment policies such as its code of conduct. On the other hand, he did not receive leave entitlements, tax wasn’t withheld from his honorarium and this was found to be roughly equivalent to his out of pocket expenses in performing the work.

The FWC’s decision

Weighing up the factors for and against characterising the situation as employment or voluntary work, the FWC found that it was more like a voluntary arrangement than it resembled employment. In reaching its conclusion, the FWC found that the purpose of the services agreement was intended to maintain coaching standards, the club’s reputation and protecting the interests of participating players. Importantly, level of control the club exercised over him was “not inconsistent” with a voluntary arrangement. Another important factor was the level of Mr Grinholz’s honorarium. If it had been significantly more than his out of pocket expenses, the FWC indicated that it may have found that the relationship was “more like” employment.

Implications for employers and not-for-profits

All organisations, especially those who have both employees and volunteers working for them, must ensure that the arrangements that underpin their work clearly depict the character of the relationship.

For clubs, societies and other not-for-profits, it appears that a degree of control can still be exerted over a worker and yet they can still be found to be a volunteer. One caveat is that any payment made to them must be commensurate with their role.

Just Us Lawyers act for employers, employees and incorporated bodies within the not-for-profit sector. If you find yourself involved in an employment dispute or unfair dismissal matter, our team of employment experts will get you through the system, whatever side you are on.