Religious workers, interns, volunteers and the National Minimum Wage

Recently I had a query in the course of the day-job from the financial administrator of a church who raised the issue of the employment status and remuneration of the church’s youth-worker.

Without going into the details of a specific case, the discussion raised several general questions in my own mind about the status of interns, part-timers, work-experience students and volunteers. Twenty years ago those distinctions were much more clear-cut; but changing patterns of work, the decisions of employment tribunals and the introduction of the National Minimum Wage have all combined to blur the overall picture. Moreover, arbitrary labels are misleading: expressions such as “internship” or “work experience placement” have no status in law. Generally, the rights of people at work depend on their employment status: whether someone is an employee, a worker or an office holder. These categories are not necessarily mutually exclusive and every case falls to be determined on the facts.

Furthermore, their employment status may be classified differently in according to tax or employment law: and with regard to the latter, establishing employment status is essential for accessing many employment rights such as protection from unfair dismissal.

Right to the National Minimum Wage

An intern with the status of a worker is entitled to the National Minimum Wage; and an employer cannot avoid the duty to pay the NMW merely by stating that it does not apply or by concluding a written agreement stating that the person in question is not a worker or that that person is a volunteer.

An intern is classed as a worker and is entitled to the National Minimum Wage if he or she is promised a contract of future work.

Interns are not entitled to the National Minimum Wage in the following circumstances:

  • Student internships: a student required to undertake an internship for less than one year as part of a UK-based further or higher education course is not entitled to the NMW.
  • School work experience placements: work experience students of compulsory school age (ie 16 or below) are not entitled to the NMW.
  • Voluntary workers: volunteers are not entitled to the NMW if they are both working for a charity, a voluntary organisation, an associated fund raising body or a statutory body and are not paid except for limited benefits such as reasonable travel or lunch expenses.
  • Work-shadowing: the employer does not have to pay the NMW if an internship only involves shadowing an employee: no work is carried out by the intern and he or she is only observing the person being shadowed.

Those who are purely volunteers do not have employment rights at all. The Supreme Court so decided in X v Mid Sussex Citizens Advice Bureau & Anor [2012] UKSC 59: Lord Mance, delivering the judgment of the Court, held that Directive 2000/78/EC ”does not cover voluntary activity” and was not prepared to refer the matter to the Court of Justice of the EU for an Opinion.

Attempting to circumvent the rules: Autoclenz

In case of a dispute, the courts and tribunals will look at the factual situation and the intentions of the parties, whatever they may have put in writing; and the Supreme Court undertook just such an analysis of an alleged self-employment relationship in Autoclenz Ltd v Belcher & Ors [2011] UKSC 41.

Autoclenz was a car-valeting business and the claimants valeted the cars. They had all signed statements declaring unequivocally that they were self-employed, rather than employees of Autoclenz; and they were taxed on that basis rather than under PAYE. Nevertheless, they sought a declaration that they were, in fact, workers entitled to holiday pay and the NMW under the Working Time Regulations 1998 and the National Minimum Wage Regulations 1999. It was common ground between the parties that if the terms of the written declaration were valid then, as a matter of law, the claimants could not be workers within the meaning of either set of Regulations. They won their original claim; and when the matter got to the Supreme Court the unanimous conclusion was that valeters had, in fact, been working under contracts of employment. Delivering the sole judgment, at para 35 Lord Clarke JSC agreed with Aikens LJ’s conclusion in the Court of Appeal  [Autoclenz Ltd v Belcher & Ors [2009] EWCA Civ 1046 para 91] that the correct approach was to discover the actual legal obligations of the parties: “This may be described as a purposive approach to the problem. If so, I am content with that description”. The ET had therefore been “… entitled to hold that the documents did not reflect the true agreement between the parties … [and] to disregard the terms of the written documents, in so far as they were inconsistent with them” [para 38].

The purposive approach

So on the basis of that “purposive approach”, if, for example, a charity says to an intern, “We can only afford to pay you the NMW for twenty hours a week but you could work the rest of the week as a volunteer”, how would that play before an Employment Tribunal?

My suggestion is that, on the principle of looking at the actual situation rather than the written or verbal agreement, an ET would need to be satisfied that any work over and above the contracted twenty hours was in fact entirely voluntary and wasn’t merely a device to get round the NMW Regulations. That, in turn, would depend at least in part in the nature of the work. If, for example, a church youth-worker took occasional church services as a lay volunteer or ran part of the church’s Sunday-school, an ET might take the view that that was the kind of activity that any committed member of a church might reasonably undertake without reward. If, on the other hand, a claimant did twenty hours of paid work a week followed by fifteen hours of “more of the same” an ET might take the view that the reality was that the claimant was in fact working a 35-hour week for less than the NMW hourly rate.

Recent cases

My suggestion would appear to be supported by two recent cases involving a Sikh gurdwara and a Hindu temple. In Singh v Management Committee of the Bristol Sikh Temple & Ors [2012] UKEAT 0429 11 1402 in which the issue was whether or not a granthi (temple priest) was “employed” for the purposes of s 54(3)(b) National Minimum Wage Act 1998. The relationship between the parties appeared to be based on voluntarism: Mr Singh did not have a formal written contract with the Management Committee and he and his wife were supported by the congregation’s voluntary contributions and lived rent-free at the gurdwara. However, the EAT concluded that the lower Tribunal had erred on the questions of mutuality and personal performance of services. Though the relationship was indeed based on “voluntarism and a traditional interpretation and application of the Sikh scriptures” [para 39] there had been no finding that a contractual relationship would be inconsistent with the practice and beliefs of the Bristol Gurdwara. The appeal was allowed and the case was remitted to the original Tribunal for reconsideration.

The issue surfaced again very recently, as noted in the last weekly round-up. In Chandra v Arya Samaj Vedic Mission (West Midlands) [2014] Birmingham County Court (unreported), in March 2011 Dr Harish Chandra was employed by the Executive Committee of Arya Samaj Vedic Mission to work at its temple on a twelve-month contract at £500 per month with a one-bedroom apartment and an arrangement that allowed him to receive commission based on those attending his courses.It turned out, however, that he was expected to spend a very large amount of his available time working and was provided only with a small single room. In March 2012, he was awarded a new three-year contract under the same terms and conditions; but in July 2012 the Executive Committee members stood down and were replaced by new members who, shortly afterwards, terminated Dr Chandra’s new contract.

HHJ Purle QC concluded that since there was no clause in Dr Chandra’s contract specifying the number of hours to be worked, his payment was therefore for “unmeasured work” rather than a salary (and, in fact, he had ended up working a 65-hour week). The Executive Committee had therefore failed to pay him the National Minimum Wage rate, even taking into account the statutory accommodation offset rate of £34.37 per week currently prescribed by the National Minimum Wage Regulations. He was awarded just over £62,500 in damages.

Comment

Once one strays outside the traditional pattern of a contract of employment, with tax paid through PAYE and the normal entitlements to such things as holiday pay, and moves into the murky world of internships, voluntary work and expenses, employment law becomes extremely complex and highly fact-specific. Religious organisations need to treat employment issues with great care – not least because of the reputational risk to the organisation of getting it wrong.

Frank Cranmer

Cite this article as: Frank Cranmer, "Religious workers, interns, volunteers and the National Minimum Wage" in Law & Religion UK, 23 July 2014, https://lawandreligionuk.com/2014/07/23/religious-workers-interns-volunteers-and-the-national-minimum-wage/

3 thoughts on “Religious workers, interns, volunteers and the National Minimum Wage

  1. This is very interesting and opens wide many other relationships created by religious organisations with ‘volunteers’. For example in the Church of England there are now many who work unpaid as ‘self-supporting minsters’ (i.e. MME, NSM, SSM). Their relationships with the church is based on voluntary work, however, as ordained clergy they have to follow fully the rules of the organisation and can even face disciplinary action under the Clergy Discipline Measure 2003 (as amended 2013). One then needs consider where this relationship would end up if the courts ever acknowledge that a stipendiary member of the clergy is actually an employee as well as being an office holder.

  2. Pingback: Religion and law round up – 27th July | Law & Religion UK

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