A New South Wales inquiry into unpaid teaching staff has surfaced a compliance risk that reaches well beyond one school's boardroom, with implications for how HR and people leaders classify workers everywhere
A New South Wales parliamentary inquiry into Redeemer Baptist School has turned into a broader lesson for HR and people leaders on the risks of misclassifying staff as volunteers.
The Legislative Council's Education Committee, chaired by Greens MLC Abigail Boyd and established on 7 July 2026, heard evidence on 10 August 2026 that the North Parramatta school's entire teaching workforce had, for years, been engaged as unpaid volunteers rather than employees – despite receiving substantial public funding.
Carol Matthews, Secretary of the Independent Education Union of Australia (IEU) NSW/ACT Branch, told the committee she was unaware of any comparable case. "I'm not aware of any other school where core teaching duties are performed by volunteers," Matthews said.
For HR leaders in any sector, that single line captures why this case is worth watching closely: it is a live illustration of how a workforce classification decision, left untested for long enough, can escalate into a multi-regulator governance crisis.
What the inquiry has uncovered
Matthews told the inquiry that teaching staff and students had, at times, shared bedrooms, and that the school relied on unpaid labour from students and staff for tasks including building maintenance and gardening. She said the arrangement created what she described as "a chilling effect on staff seeking union support."
The scale of the funding involved is central to why the case has drawn regulatory attention. A joint investigation by The Sydney Morning Herald and The Age found the school received approximately $106.7 million in combined government grants and parent fees between 2015 and 2024 while reporting zero salary expenses over that period.
Clinton Free, Professor of Accounting at the University of Sydney, who reviewed the financial records, noted that labour costs typically account for 60 to 75 per cent of total expenses at comparable schools. Staff were instead classified as members of the school's religious Ministry Order, receiving a discretionary stipend of about $2,000 a month – well short of the roughly $7,515 monthly minimum award wage for a NSW teacher.
Why the classification test matters for every HR team
The volunteer-versus-employee distinction is not a labelling exercise; it is a substance test. As our recent coverage of a Fair Work Commission ruling on a Melbourne events contractor illustrated, tribunals look at the real substance and practical reality of a working relationship, not the terms used to describe it.
A genuine volunteer is under no obligation to attend a workplace or perform rostered duties and has no expectation of payment. Where an organisation directs a person's hours, tasks and conduct, the same tests can find an employment relationship exists regardless of how the arrangement is documented.
Matthews noted that non-government school staff in NSW are ordinarily covered by enterprise agreements broadly comparable to government school salaries, and that a federal minimum award – including superannuation – applies even without such an agreement.
"It appears that the school's teacher 'volunteers' are not receiving even these minimum conditions," she told the committee. Redeemer Baptist School has said its governance and operations meet NSW and federal government requirements, describing the Ministry Order arrangement as a voluntary "lifestyle of sacrifice."
A governance lesson beyond the education sector
Three regulators are now involved, which is itself instructive. The NSW Education Standards Authority (NESA) is investigating, confirmed by NSW Education Minister Prue Car; the matter has been referred to the federal Department of Education by federal Education Minister Jason Clare; and the Australian Charities and Not-for-profits Commission (ACNC) is reviewing the case following a referral from federal Assistant Minister for Charities Andrew Leigh.
Overlapping regulatory interest of this kind tends to emerge only once several independent oversight mechanisms – financial, industrial and charitable – have each failed to catch the same problem.
For HR and people leaders, the takeaway sits well ahead of any inquiry findings. Independent school board members carry legal responsibilities equivalent to company directors, and the same principle extends to any organisation running volunteer, gig, or informal staffing arrangements: classification needs to be actively and regularly tested against legal criteria, not assumed to be correct because it has gone unchallenged.
Our guide on navigating the regulatory maze of HR and payroll compliance outlines a similar discipline for organisations reviewing their own risk exposure, and our coverage on what employers need to know about proactive compliance obligations makes the same point: regulators increasingly expect organisations to find these issues before they do.
The Redeemer Baptist inquiry remains ongoing, with further hearings expected. Whatever it ultimately finds, the practical lesson for HR leaders has already landed: regularly and independently verifying how staff are classified, paid and protected is a duty of care, not a compliance formality.
