Hospitality Business Magazine

Volunteers and Pre-employment Trials

imageStreamThe Restaurant Association of New Zealand’s Employment Service shares advice for hospitality operators on pre-employment trials and what constitutes a volunteer. 

We often get queries about pre-employment trials and what constitutes a volunteer. There are several employment cases that highlight these situations, in particular, The Salad Bowl case, which went through the Employment Court last year.

The Johnson v NZL Marquis Ltd case looked at the definition of a volunteer and the nature of the relationship between the parties. Mr Peter Johnson would frequent the Marquis of Normanby Hotel in Caterton as a patron and would regularly drive the hotel courtesy coach to transport customers. The hotel was purchased by Mr Dayal on 5 July 2010 and he paid Mr Johnson $50 per shift.

In December 2012, Mr Johnson was asked by Mr Dayal to return all of the keys in his possession, along with the keys to the van and the security keys to the hotel. This request came after Mr Johnson made enquiries with the Ministry of Business, Innovation and Employment regarding the status of his employment and standard employment entitlements. A short time after Mr Dayal’s request, the general manager of the hotel text Mr Johnson stating that his services were no longer required. Mr Johnson didn’t return to the hotel as a patron or the coach driver after 10 January 2013.

Mr Johnson raised a personal grievance for unjustified dismissal and wage arrears. Mr Dayal claimed that Mr Johnson was not an employee and that he was a volunteer. Mr Dayal also stated that payments to Mr Johnson were out of his own pocket and made as a “gift”.

In terms of the Law, the Authority looked at the definition of a volunteer, which is a person that does not expect to be rewarded (paid) for work they undertake. The nature of the relationship was also scrutinised to ascertain whether Mr Johnson was an employee and for his claim to have success. It was found that Mr Johnson was an employee, employed on a casual, on-call basis. Some of the reasoning behind this decision was because Mr Johnson expected and received payment and worked a regular roster. In addition to this, driving the coach was an integral part of the business, which Mr Johnson was very much part of.

Another case – The Salad Bowl briefly refers to the same ins and outs of a volunteer and the nature of the business relationships. Chief Judge Colgan focused on the viability of “pre-employment trials” and genuine fixed term arrangements. In this case, it was found that the “pre-employment trial” was deemed a fixed term arrangement however, this was breached and could not be relied upon because employers cannot use fixed term agreements to determine suitability for a permanent position. If employers do not comply with the Act around the use of fixed term agreements, such arrangements lose their fixed term advantages, making the employee’s employment indefinite. Like the Marquis case, Colgan found the employee performed duties that were an integral part of the business and the claim for unjustified dismissal was successful.

Another interesting case is McIvor v Saad trading as Pita House. This is a similar case, where Mr Saad (the employer) met with Mr McIvor (employee) and both parties agreed that Mr McIvor would work in the factory on a “trial” to see if he liked the work. If he liked the job and was suitable for the role, they would talk again. Mr Saad agreed to pay Mr McIvor $65 a day, which Mr Saad claimed was for food and petrol – not wages.

Mr McIvor spent the first week packing pita bread and struggled with the work load. When he met with Mr Saad he asked for another chance and Mr Saad agreed to another 2 week trial as a baker’s assistant. Mr McIvor claimed that he worked around 260 hours in the factory and became disenchanted with the amount of hours he was working and the pay he was receiving. Mr McIvor met with Mr Saad again and requested that he be put “on the books” as a full time worker and paid the minimum wage. Mr Saad offered 30 hours per week at the minimum wage but this was not acceptable by Mr McIvor, at which point he refused and tendered his resignation.

Mr McIvor raised a personal grievance for constructive dismissal and wage arrears, however, Mr Saad claimed he was a volunteer. The Authority referred to the Salad Bowl case and stated that the work undertaken by Mr McIvor contributed to the business and that the employee was not a volunteer. It concluded that the employment relationship was of a fixed term nature but due to the breach of using this type of agreement to assess suitability for a permanent employment, the fixed term advantages disappeared for Mr Saad.

Be that as it may, the Authority found that both parties understood the relationship to be that of a “work trial” on agreed terms. The Authority did not accept that the breach was serious enough to make it reasonably foreseeable by the employer that the employee would resign. Mr McIvor knew the terms of the relationship and he was unhappy with the job offer and decided to resign – voluntarily.

By Kirsten Lethbridge, Employment Relations Advisor/Helpdesk