Throughout Canada, every employer is governed by some type of
employment legislation, usually called the Employment Standards Act
(in Ontario and British Columbia, for example) or the Employment
Standards Code (in Alberta, for example). Such employment standards
legislation is generally similar throughout Canada and is designed
to provide protection to employees from would-be unscrupulous
employers by, for example, providing a right to minimum notice on
termination of employment, a right to a minimum wage and overtime
rates as well as providing various mandatory types of leave to
employees, such as maternity leave.
The vast majority of charities simply could not exist without
the dedicated work of an army of volunteers. Volunteers generally
provide voluntary work for which they are not paid. Volunteers are
not subject to the protections afforded by employment standards
legislation. It is not always easy, from a legal perspective,
however, to distinguish between an employee and a volunteer and
definitions of the term "employee" in employment
standards legislation can be quite wide. Not-for-profit
organizations and charities need to be aware of the risks which may
arise if the distinction is blurred in any given case. Both parties
will undoubtedly start their relationship with the best of
intentions but, if the relationship turns sour, a disgruntled
volunteer could easily file a (usually free of charge) claim with
the relevant Employment Standards office, claiming to have been an
employee, rather than a volunteer. If the Employment Standards
office agrees with the individual that he/she was an employee
rather than a volunteer, the not-for-profit "employer"
could find itself facing huge liabilities under employment
standards legislation for, by way of example:
Wages (and a failure to pay minimum wage)
General holiday pay
Failure to maintain proper records
Failure to provide applicable rest periods.
Even if the not-for-profit organization is successful in
defending any such claim, the costs and time involved in such a
defence can be extraordinary and there is usually no right to
recover any such costs. In addition, other legislation such as
human rights legislation or workers compensation legislation may
also be applicable to employees but not volunteers.
There is no fail-safe way of avoiding the risk of a court
deciding that a volunteer was in fact an employee. However, with a
few simple steps, not-for-profit organizations can minimize the
chances of a volunteer being held to have been an employee:
Document the relationship at the outset.
Although not conclusive, a contract, letter or other written
document which sets out the voluntary nature of the relationship
will be highly persuasive. Ideally this would be in the form of a
written document signed by both parties before any voluntary
activities were commenced but even an email to the individual
setting out the terms on which the voluntary activities are to be
provided, is better than nothing.
Avoid any indicia of employment. Do not
provide employment benefits to volunteers, for example. If the
volunteer has a title or a business card, make sure it correctly
describes the individual as a volunteer. If the volunteer has an
email address, consider having the reference
"(volunteer)" after their name. Any website listings
should clearly list volunteers as such.
Keep employees and volunteers separate. If the
organization engages both volunteers and employees, then keep their
roles as separate and distinct as possible. If employees provide
voluntary support at any stage then make sure that the voluntary
(and unpaid) nature of such activities is clearly set out in
writing prior to the activities taking place.
Be consistent. If one type of work is
generally carried out by employees then try to avoid having
volunteers carry that out, if at all possible. This is particularly
important if a volunteer carries out duties which were previously
performed by an employee.
Make sure the work is truly voluntary. If the
individual could not have declined to carry out the activities, are
they really volunteering? Document any occasions when the
individual did decline to provide support.
By following a few simple rules, not-for-profit organizations
can limit the chances that they may be found liable for significant
payments to former employees who were always considered by them to
have been volunteers.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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