Volunteer or employee? –Employers, beware of misclassifications of volunteers – Employee rights/Labour relations

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Are you an organization that relies on volunteers? Many not-for-profit corporations such as charities, social clubs, service clubs (e.g. Lions and Rotary) and sports clubs rely on the contributions of their volunteers given limited operational funds to “endow staffing” their organizations. This volunteering is known as “good volunteering” and exempts from the provision of the minimum statutory rights granted to “employees” under various employment laws. However, there are times when organizations may be exposed to liability as “employers“.

What is a volunteer or employee for Ontario purposes Employment Standards Act 2000 and its regulations (collectively the “ESA“) is not however defines the ESA Policy and Interpretation Manual (there “Manual“) indicates that the ESA does not apply to volunteers because they are not considered “employees” under the ESA. However, the manual notes that the Employment Standards Program must always investigate whether someone is a “true volunteeror an employee. This happened in the class action lawsuit filed against S-Trip, discussed below.

What is a volunteer is defined in Ontario Regulation 385/9d 6 of the Occupational Health and Safety Actas “a worker who performs work or provides a service but who does not receive any monetary compensation for it other than an allowance for expenses or fees. “This means that organizations may very well find themselves obligated to provide volunteer safety in the same way as it provides for its employees, unless the volunteer is a member of a”voluntary strength“as defined in the
Workplace Safety and Insurance Act(“WSIA“) (i.e., volunteer ambulance brigade or services; municipal volunteer firefighters or firefighters; first aid teams; or auxiliary police forces), they are unlikely to qualify for WSIB coverage under the WSIA.

Moreover, although section 5 of the Ontario Act human rights code (there “Coded“) offers protection to persons in employment, it does not define what “employeest” is or is not. In application, the Human Rights Tribunal of Ontario (OHRT) has determined that the Code applies to “volunteer job“.

In the Undress case notwithstanding the capacity of this
for profit student travel agency to pay employment standards fees, she used “volunteersas destination staff and had them work up to 14 hours a day. In support of its classification of destination staff as volunteers, S-Trip had destination staff sign a standard agreement acknowledging that he is not entitled to any benefits under the ESA (despite the fact that employees cannot subcontract their rights under the ESA.) In addition, S-Trip has encouraged volunteers to enter into such agreements in the hope of obtaining full-time employment with its continued advertising of full-time employees S-Trip Leader positions on their “job board” supported by regular internal and external communication which “80% of its full-time staff started as destination staff“.

As part of this action, the 1,170 volunteers asserted that they should be classified as employees and entitled to wages and benefits under the ESA and relied on the following supporting contextual factors:

  1. They are the main point of contact between customers and S-Trip (i.e. they are essential to the operations of S-Trip’s business);

  2. S-Trip’s operations and functions do not serve any civic, religious, or charitable purpose, as S-Trip is a for-profit corporation;

  3. S-Trip put them through a six-step interview process, which includes a background check;

  4. S-Trip provided them with detailed guidelines and manuals to follow;

  5. S-Trip provided them with extensive training, including on-the-job training by its staff;

  6. S-Trip subjected them to reviews and performance evaluations;

  7. S-Trip required them to wear standardized uniforms;

  8. S-Trip assigned them mandatory tasks and schedules;

  9. S-Trip remunerates them for their work with fees that differ according to position and level of seniority but not according to the number of hours worked; and

  10. The remuneration paid to them increased with seniority.

In June 2022, the Ontario Superior Court approved the settlement agreement which required an all-inclusive payment for Trip S of $450,000 and the reclassification of destination personnel as employees for ESA purposes .

Key points to remember

Court approval of a settlement agreement does not endorse any specific test or factor to be considered when classifying individuals as employees or volunteers. However, the contextual factors listed above provide an overview of the factors that courts will consider in determining a person’s status as an employee or volunteer. Particular attention will be paid to:

  • All defined terms and provisions of applicable employment law (e.g. prohibition against contracting out ESA minimum statutory protections);

  • Is there a power imbalance between the parties structuring the relationship and what is the individual’s perception of their services/status?

  • The conduct of the parties, including whether there is misleading, inciting or bad faith behavior (for example, falsely dangling the possibility of full-time employment); and

  • Whether there are other people in the same situation who are receiving employment compensation for similar work (i.e., destination staff versus attendants).

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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