Volunteer or Employee? How Small UK Charities Can Avoid Creating Employment Status by Accident

TL;DR: Calling someone a volunteer does not automatically make them one in law. Small charities should look at how the arrangement works in practice, especially payments, rotas, role descriptions, supervision and expectations. Reimburse genuine expenses, keep attendance voluntary, avoid employment-style language and review arrangements when they change.

Running a small charity often means relying on people who care deeply about the cause and are willing to give their time.

That is a huge asset.

It can also create risk if a volunteer arrangement slowly starts looking like a paid role without anyone noticing. A fixed allowance appears. A rota becomes compulsory. A “volunteer agreement” starts reading like an employment contract. Suddenly, the label says volunteer, but the reality says something else.

And in employment law, reality matters.

This article provides general information about UK employment status. It is not legal advice. If you are unsure about a specific volunteer, trustee or working arrangement, take professional advice.

Volunteer, worker or employee: what is the difference?

The word “volunteer” is not legally defined. There is no magic form, title or sentence that guarantees someone will remain a volunteer.

English law generally recognises three broad categories of people providing services:

• Employees

• Workers

• Genuinely self-employed people

A genuine volunteer sits outside those categories because the arrangement is genuinely voluntary.

The important question is not simply, “What do we call this person?”

It is:

What does the relationship actually look like in practice?

The name on the document is only one piece of the picture. A court or tribunal can look beyond a handbook, policy or role description if the day-to-day arrangement tells a different story.

What makes an arrangement look contractual?

The key markers of a contract include:

• An offer

• Acceptance

• Consideration

• An intention to create legal relations

These do not all need to be written down.

Consideration means something of value is exchanged for obligations. It does not have to be cash. It could include perks, benefits or training that is not needed for the role itself.

That is why a small charity needs to look carefully at what it offers and what it expects in return.

Why the volunteer label is not enough

A recent case involving Coastguard Rescue Officers shows why labels cannot do all the heavy lifting.

In Maritime and Coastguard Agency v Groom, the handbook, code of conduct and remuneration policy described the individuals as volunteers. However, the arrangement also allowed them to claim hourly payments and receive payslips, P60s and P45s. They were expected to follow reasonable instructions.

The Court of Appeal found that a worker contract arose assignment by assignment whenever they attended an activity carrying a right to claim remuneration.

The fact that payment had to be claimed rather than paid automatically did not change the outcome. Neither did the fact that individuals could decline future work.

The court contrasted that arrangement with genuine volunteering, where a person is reimbursed for expenses rather than paid for their time.

The practical lesson is simple:

If you pay people for their time and expect them to follow work-related obligations, calling them volunteers will not necessarily protect the charity.

Courts may also take an assignment-by-assignment approach. Someone might be a worker during a defined activity or period, even if there is no overarching contract covering the whole relationship.

What rights could apply?

If someone is found to be a worker, they may gain rights including:

• National Minimum Wage

• Statutory paid holiday

• Protection under the Equality Act 2010

• Protection from detriment for whistleblowing

• Working Time Regulations protections, including the 48-hour average working week

• Other core employment protections

Employees have further rights, including:

• Unfair dismissal protection, subject to the relevant rules

• Statutory Sick Pay, where the conditions are met

• Trade union rights

There is also a separate category known as a voluntary worker. This is different from an ordinary volunteer.

A voluntary worker provides services without pay but is under a contractual obligation to do so, with the organisation obliged to provide work. Voluntary workers are not entitled to National Minimum Wage, but they do receive certain Working Time Regulations protections, including rest breaks and holiday, as well as Equality Act 2010 protection.

The categories can be technical. That is exactly why small charities should not rely on guesswork.

How small charities can reduce the risk

1. Keep volunteer expenses tied to actual costs

Reimbursing genuine out-of-pocket expenses is consistent with genuine volunteering.

Examples might include:

• Travel

• Lunch while volunteering

• Postage

• Essential equipment

Your expenses process should be clear and evidence-based.

Good practice includes:

• Reimburse receipts where practical

• Set out the process in an expenses policy

• Limit payments to actual costs

• Keep an expenses record

• Avoid flat weekly or monthly allowances

• Avoid paying for time, attendance or availability

A fixed payment per shift can look like compensation for work. So can a regular “thank you” payment that bears little connection to actual expenses.

Calling it a stipend, allowance or honorarium does not automatically change what it is.

2. Use rotas as a planning tool, not a hidden obligation

Charities often need reliable people for time-bound activities. That is understandable. A food bank, community event or support service may need enough people present to operate safely.

The risk appears when a rota changes from a record of availability into a compulsory schedule.

To keep the arrangement genuinely voluntary:

• Allow volunteers to decline shifts

• Allow them to change or withdraw their availability

• Avoid penalties for not attending

• Do not require them to find their own cover

• Keep the language permissive

• Avoid consequences that look like disciplinary action

Mutuality of obligation asks whether the organisation must offer work and whether the person must accept it.

Needing reliable volunteers is not automatically a problem. But an immovable obligation to attend can make the relationship look more contractual.

3. Write role descriptions carefully

A volunteer role description can be useful. It helps people understand the activity, support available and boundaries of the role.

But be careful with employment-style language.

Instead of using phrases such as:

• Duties

• Required

• Mandatory attendance

• Probation

• Disciplinary action

• Line manager reporting

Consider describing:

• The activity the volunteer may support

• The type of guidance available

• The charity’s hopes and expectations

• The practical information needed to volunteer safely

• Who the volunteer can contact for support

This is not about pretending volunteers have no responsibilities. Safeguarding, health and safety, confidentiality and data protection may still need to apply.

It is about making sure the documents reflect a voluntary, non-binding relationship rather than a job with a different label.

4. Keep supervision supportive

You can support and guide volunteers. In fact, you should.

Volunteers may need training, instructions and oversight so that services are delivered safely and consistently.

However, constant control over how and when someone works can be a risk factor. So can formal performance management, mandatory targets and employment-style disciplinary processes.

Use separate volunteer procedures where appropriate. Make it clear which organisational policies apply to everyone, such as safeguarding and health and safety, and which processes are specifically for employees.

5. Be careful with perks and training

Benefits and training can count as consideration if they are offered in exchange for commitments.

Ask yourself:

• Is this training genuinely needed for the volunteer activity?

• Is the benefit offered at the charity’s discretion?

• Does the person receive it because they have agreed to stay for a fixed period?

• Could an outside observer see it as payment for services?

This does not mean you cannot train volunteers or thank them for their contribution. It means you should understand what is being offered and why.

What should a volunteer agreement include?

A written volunteer agreement can be helpful if it reflects the reality of the relationship.

It should be clearly non-binding and state that it is not intended to create a legal relationship or contract.

It can explain:

• The voluntary nature of the arrangement

• The type of activity involved

• The support and training available

• How genuine expenses are reimbursed

• That the volunteer can stop volunteering

• That the charity is not obliged to provide ongoing opportunities

Avoid wording that creates contractual-sounding obligations.

And do not treat the document as a magic shield. If the day-to-day arrangement looks like employment, a statement saying “this is not a contract” may not settle the matter.

Review the agreement when the role changes. A volunteer who starts with occasional flexible support may later become a regular part of service delivery. That change deserves a fresh look.

What about trustees?

Unpaid trustees are volunteers in most cases.

However, paid trustees or trustee expenses handled incorrectly need careful review. Conflicts of interest, payments and expenses should be considered properly, with clear records and appropriate governance.

The Charity Commission’s guidance on charity staff and paid workers also highlights the importance of clear responsibilities between trustees, management and staff.

Common mistakes to avoid

Small charities should watch out for these warning signs:

• Assuming the label in the handbook settles the question

• Paying a fixed allowance or amount per shift

• Requiring attendance with penalties for not turning up

• Using job adverts and employment-style role descriptions for volunteers

• Giving volunteers contractual-sounding documents

• Using volunteering to fill what is really a paid role

• Failing to review arrangements when they change

If the work needs set hours, regular attendance, close supervision and payment for time, it may be time to consider whether the role should be paid.

That is not a failure of your volunteer programme. It is good governance.

FAQ

Can volunteers be given expenses?

Yes, genuine out-of-pocket expenses can be reimbursed. Keep payments connected to actual costs and avoid flat allowances that could look like pay.

Can a volunteer refuse a rota shift?

A genuinely voluntary arrangement should allow the person to decline or change their availability without a penalty. A rota should not quietly become a compulsory schedule.

Does calling someone a volunteer protect the charity?

No. Employment status depends on the reality of the relationship, not just the label used in documents.

Can volunteers receive training?

Yes, where training is needed to carry out the activity safely or properly. Be careful if training or another benefit is offered in exchange for a commitment to stay or work for a set period.

The takeaway

A volunteer agreement is not a substitute for a genuinely voluntary arrangement.

Look at the whole picture:

• Are you reimbursing actual expenses rather than paying for time?

• Can the person decline work without penalty?

• Do role descriptions describe expectations rather than contractual duties?

• Is supervision supportive rather than controlling?

• Do your documents match what happens in practice?

• Have you reviewed the arrangement since it changed?

If the answer is no, do not ignore it.

For more guidance on involving volunteers, see NCVO’s guidance on avoiding an employment contract and the UK government’s employment status and employment rights guidance.

For practical HR support with volunteer arrangements, policies and people processes, get in touch with Phare HR Consulting. We help small organisations put clear, workable HR structures in place before small gaps become bigger problems.