Employer argues payment was honorarium rather than wage
The Fair Work Commission (FWC) recently dealt with a case that examined the distinction between employees and volunteers in the context of employment law.
The case involved a worker who provided sub-editing services for an online bushwalking magazine and sought to determine whether he was an employee, entitled to protections against unfair dismissal under the Fair Work Act 2009, or a volunteer who falls outside the scope of these provisions.
The outcome of this case has significant implications for both workers and organisations, highlighting the importance of clearly defining the nature of working relationships.
Background of the case
The worker, an experienced bushwalker, had been involved in the activity since the mid-1960s, accumulating a wealth of knowledge and experience.
In 2013, he came across the first edition of a digital bushwalking magazine and recognised the potential for improvement. He reached out to the editor, offering his services as a volunteer sub-editor.
For two years, the worker voluntarily sub-edited the magazine, dedicating his time and skills to enhance the publication's content and quality.
In 2015, the worker proposed to invoice the editor for a nominal fee of $1 per edition, not for financial gain, but to formalise his association with the magazine. The editor agreed, and from 2015 onwards, the worker invoiced $1 per year, with the exception of 2021.
According to records, in January 2024, the editor decided to "dismiss" the worker from his role as sub-editor, citing concerns over performance and the magazine's direction.
The worker, feeling wronged, filed an application for an unfair dismissal remedy with the FWC, arguing that the $1 per year payment constituted a contract of employment.
The parties’ arguments
The worker argued that the $1 per year payment, along with his substantial time commitment and the agreed-upon pattern of work, demonstrated an ongoing employment relationship.
He argued that his sub-editing had significantly improved the magazine's professional standards and created goodwill for the editor's business.
Conversely, the editor maintained that the worker was a volunteer and that the $1 per year payment was an honorarium rather than a wage.
The editor said that the magazine was a free community resource, not a profit-generating enterprise, and that the worker's contributions were voluntary.
They argued that there was no formal employment agreement, and the arrangement lacked clear terms and conditions typically found in an employment relationship.
The FWC’s decision
After considering the evidence and arguments, the FWC determined that the worker was a volunteer, not an employee.
The Commission examined the key elements of an employment relationship, including intention, consideration, legal enforceability, and certainty of terms, and found that the arrangement did not meet the threshold for an employment contract.
The FWC placed weight on the worker's own statement that the $1 per year payment was a means to "truthfully say that I work for you," suggesting that the payment was symbolic rather than a genuine exchange of labour for remuneration.
“No evidence of legally binding employment conditions were agreed at any stage between the parties, except for in the form of personal satisfaction in the product. The agreement to pay $1 per edition or per year does not satisfy conditions of an employment relationship, it is best characterised as an honorarium,” the FWC said.
The Commission also noted the absence of clear terms and conditions governing the worker's role, such as set hours of work, performance standards, or scope of duties.
The FWC concluded that the worker was motivated by a desire to contribute to a cause he was passionate about, rather than seeking financial gain.
While acknowledging the worker's dedication and value to the magazine, the Commission determined that his role fell outside the protections of the Fair Work Act 2009. Consequently, it dismissed the unfair dismissal application.
