Let me explain in detail: (Extracted -and updated- from a guide I wrote for LVSC):
Employment StatusFirstly it is important to consider whether the person who is working for the organisation (or the organisation wishes to work for them) is actually an employee of the organisation, or is self-employed (i.e.‘freelance’).If the employer has:• a duty to provide work
• controls when and how it is done
• supplies the tools or other equipment needed to do it
• pays tax and national insurance contributions on the worker’s behalf
then it is likely that the worker is an employee.
If, on the other hand:
• the worker can decide whether or not to accept work
• how to carry it out
• makes his/her own arrangements for holidays or sickness absences
• pays his/her own tax and national insurance contributions
• is free to do the same type of work for more than one employer at the same time
This points towards the person being self-employed.
In simple terms, if the situation is that the organisation is obliged to provide work, and the worker is obliged to do it, then it is likely that an employment situation exists, and all the rules and laws applying to employees operates. An employee has an entitlement to certain rights. Many of these are set out in law, others in a statement of terms and conditions of employment and in other documents and policies.
Another sort of employment status that may apply is that of workers who are employed via an agency. Other workers who are not employees (eg self employed workers, agency workers) still have some rights, such as those related to discrimination law, health and safety (which includes working hours), and minimum wage. Volunteers
Volunteers are not employees, and therefore do not have the same rights as employees. However, some laws still apply to them, such as discrimination and health and safety law as outlined above. The key thing for voluntary organisations is to ensure they do not by mistake create an employment contract with volunteers, by creating the elements of a contract as outlined above. In particular this means
not paying volunteers anything over and above actual legitimate expenses i.e. not a general ‘allowance’ for lunch, or gifts or free access to training with a value (something that gives them a qualification), and
not creating a ‘mutuality of obligation’ – an expectation that a volunteer should turn up to work in exchange for anything.
If this happens they will not be considered a volunteer, and will in law be considered an employee, and therefore have employment rights like any other employee, including the right to a minimum wage (see below). Even if no written contract exists the simple existence of a ‘reward’ could be interpreted as signifying an employment relationship.
InternsInterns are quite simply employees and therefore all aspects if employment law apply, including minimum wage, entitlement to paid holidays, sick pay etc. It may be that an intern falls under the employment law definition of “apprentice”, and this impacts upon their wage entitlement – but on no other aspect of legal entitlement.
There are those within the sector who may be upset by this - a feeling that people should be prepared to be exploited by charities because its "a good cause" - I say charities should set an example and encourage - and promote - good practice as employers.
Worse than this, there are some in the voluntary sector who for unknown reasons believe that charities are exempt from all this legislation - well I have news for you, you are not. When you employ pregnant women they get maternity leave and pay, when people are sick they are entitled to sick leave, when people work, for goodness sake, they are entitled to reasonable reward. The Masters and Servant Act, I am glad to report, was abolished a long time ago. It's about time the voluntary sector realised this.
For further details see here (PEACe at LVSC) here (emplaw.co.uk) or here (NCVO) or here (Sandy Adirondack) .