In response to my post Are Tasmanian retained firefighter employees? (July 25, 2024) I received some interesting comments. The gist of those comments are that retained firefighters are not paid an equivalent amount to employees, but ‘superannuation and tax is deducted from our remuneration!’  This persuaded me to look a little further into the matter.  What I see as a critical issue is whether being paid less than employees means you are something other than an employee, or you are an employee that is just being underpaid?

The High Court in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 said that when considering a person’s status – in that case whether they are an employee or an independent contractor – and the terms of their engagement are set out in writing then the task of the court is to interpet and give effect to the written agreement.  That was adopted in Mifsud v Fire and Rescue NSW Band Incorporated [2024] FWC 853 where the Commission looked at the terms of the Band’s constitution and the band protocol.

With respect to the Tasmanian retained firefighters I’m told ‘however there is no formal application process, and these positions are generally awarded within the volunteer brigade management’.  I am not told whether there is any written ‘duty statement’ or the like that explains on what basis a retainer is paid and what is expected of the firefighters and the TFS as part of that arrangement.  Understanding that document, and how the rate of retainer is calculated, would be essential in determining whether the firefighters are volunteers or underpaid casual employees.

Volunteering Australia defines a volunteering as ‘time willingly given for the common good and without financial gain’ (https://www.volunteeringaustralia.org/resources/definition-of-volunteering/#/).  A volunteer could be reimbursed for their expenses but that is not a financial ‘gain’.  Equally they may get an honorarium in appreciation of work done but if that is not their motivation and is not a payment ‘of right’ then the volunteer is not looking for financial ‘gain’ even if they do get a bonus.

Taxation

The Australian Taxation Office (‘the ATO’) accepts that volunteers can receive money payments that may, or may not, count as assessable income.  The ATO says:

Volunteers can be paid in cash, given non-cash benefits or given a combination of both cash and non-cash benefits…

A payment to a volunteer that is not assessable income will have many of the following characteristics:

The payment is to meet incurred or anticipated expenses.

• The payment has no connection to the volunteer’s income-producing activities or services.
• The payment is not received as remuneration or as a consequence of employment.
• The payment is not relied upon or expected by the volunteer for day-to-day living.
• The payment is not legally required or expected.
• There is no obligation on the part of your organisation to make the payment.
• The payment is a token amount compared to the services provided or expenses incurred by the volunteer. Whether the payment is token depends on the full facts surrounding the payment and volunteer’s circumstances.

… These payments are given various descriptions, including:

• honorariums
• reimbursements
• allowances.

Sometimes they are given no name at all.

With respect to those types of payments, the ATO says:

Honorarium

An honorarium is either:

• an honorary reward for voluntary services, or
• a fee for professional services voluntarily performed.

Reimbursement

A payment is a reimbursement for tax purposes if it is a precise compensation, in part or full, for an expense already incurred, even if the expense has not yet been paid.

In general, your not-for-profit organisation will reimburse your volunteers when you consider they have incurred expenditure on behalf of the organisation. The volunteer may be reimbursed for all or part of the expense.

A payment is more likely to be a reimbursement where you require your volunteer:

• to provide a receipt or otherwise substantiate expenses
• refund unspent amounts.

Allowances

Whether an allowance is assessable income of the volunteer depends on the facts surrounding the payment and the relationship between the volunteer and your not-for-profit organisation.

If a volunteer receives an allowance with no regard to actual expenses and there is no requirement to repay unspent monies, the allowance may be treated as assessable income.

I’m told the Tasmania Fire Service (TFS) does deduct tax from the payments made to retained firefighters which implies that they accept the payments are taxable income.

Superannuation

With respect to superannuation, the ATO says it is only employers who are required to make superannuation contributions on behalf of employees. The ATO says:

Generally, all employees are eligible for super guarantee. It doesn’t matter if the employee is:

• full time, part time or casual
• receiving a super pension or annuity while working (this includes employees on transition to retirement)
• a temporary resident, such as a backpacker
• a company director
• a family member working in your business.

If TFS is deducting superannuation that would imply that the retained firefighters are employees or independent contractors but I doubt that retained firefighters have set themselves up as ‘Bill Smith’s firefighting services’ with an ABN and they then contract to provide firefighting services to the TFS.

But they’re not called employees?

To return to the High Court’s decision in  Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd whether a relationship is an employment relationship is a question of law.  Even if one is interpreting an agreement to understand what is expected of each party, whether that constitutes employment is a legal question and is not answered simply by how the parties describe the relationship.  If that were not the case all employers could underpay their employees by for example describing them as independent contractors or volunteers and the payment as an allowance rather than a wage.  Kiefel CJ, Keane and Edelman JJ said (at [63]-[64]):

The parties’ description of their relationship

63 To say that the legal character of a relationship between persons is to be determined by the rights and obligations which are established by the parties’ written contract is distinctly not to say that the “label” which the parties may have chosen to describe their relationship is determinative of, or even relevant to, that characterisation.

64 Subject to statute, under the common law the parties are free to agree upon the rights and obligations by which they are to be bound. But the determination of the character of the relationship constituted by those rights and obligations is a matter for the court.

In other words, the TFS may not describe the firefighters as employees, and it may be the case that they ‘Certainly aren’t paid like an employee’ but that doesn’t mean they are not an employee. 

In my earlier post I quoted advice from the ATO on how to decide whether someone is or not an employee.  In Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd, Gageler and Gleeson JJ said (at [113]):

Where a continual relationship under which work is done by an individual in exchange for remuneration in fact exists, the characterisation of that relationship as one of employment or service, on the one hand, or as one of hirer and independent contractor, on the other hand, has long been understood to turn on one or other or both of two main overlapping considerations. The first is the extent of the control that the putative employer can be seen to have over how, where and when the putative employee does the work. The second is the extent to which the putative employee can be seen to work in his or her own business as distinct from the business of the putative employer. Factors relevant to that second consideration have been said to include, but not to be limited to, “the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee”. A third consideration sometimes identified is perhaps little more than a variation of the second consideration: it is the extent to which the work done by the putative employee can be seen to be integrated into the business of the putative employer.

Presumably TFS firefighters can only do the work for which they are retained when directed to do so by the TFS. They must attend TFS callouts and TFS training.  As noted above, I doubt retained firefighters are operating as their own business to provide services to the TFS.  My guess is that they are wearing uniforms provided by TFS, using TFS appliances and when they turn out they are clearly turning out as TFS not as a contractor to the TFS.   

I don’t know whether they need to apply for leave if they are going to be unavailable or whether, like other volunteers, they can choose not to respond to any particular call or not to go to training on a particular night simply because they think they have something else they’d rather do.   If there is an expectation that they are available eg on a roster and they need to apply for leave or make other arrangements if they are not going to be available, then it looks more like employment.

A comparison with NSW

It is interesting to note that prior to 26 October 2018, the Fire Brigades Act 1989 (NSW) (as it then was ) referred to volunteer fire brigades (s 9). The Act also provided that the Industrial Relations Secretary (‘the Secretary’) was the deemed employer of both permanent and volunteer firefighters (s 70). The Secretary could determine ‘the payments to be made to members of volunteer fire brigades’ (s 71) and could ‘…enter into an agreement with any association or organisation representing a group or class of members of permanent or volunteer fire brigades with respect to industrial matters’.  Cleary retained firefighters were not volunteers even though they were described as ‘retained volunteers’.

On 26 October 2018 the name of the Act was changed to Fire and Rescue NSW Act 1989 (NSW) and the language in ss 9, 70, 71 and 72 changed to refer to Retained Fire Brigades.  Retained firefighters in NSW are clearly employees and their employment conditions are regulated by the Crown Employees (Fire and Rescue NSW Retained Firefighting Staff) Award 2023.

NSW recognised the fiction of describing retained firefighters as volunteers in 2018. Whether the situation in Tasmania in 2024 as the same as it was in NSW in 2018, I cannot say but it does still beg the question of whether Tasmanian retained firefighters are really employees. 

Conclusion

I still cannot say whether Tasmanian retained firefighters are actually employees. As the High Court has said, answering that question ‘requires consideration of the totality of the relationship’ (Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1, [162] (Gordon J)) between the TFS and its retained firefighters. The determination of whether that relationship is really one of employment or not is a matter, ultimately, for the courts ([64] (Kiefel CJ, Keane and Edelman JJ)).

As I have said before I am not an industrial lawyer, this is not the place for legal advice and I do not have access to all the information about how retained firefighters are engaged, paid and what is expected of them.  It may be that TFS, the UFU, the Minister responsible for the State Service Act 2000 (Tas) and the Fair Work Commission are all satisfied that the relationship between the TFS and its retained volunteers is not a relationship of employment, and the payments made are legitimate honorariums and/or reimbursement.  If that is not the case however, it would be fascinating if a retained firefighter, perhaps supported by a union, wanted to challenge the view that retained firefighters are volunteers.  If it was found that they are in fact employees that would no doubt have significant implications for the State of Tasmania and the TFS given what it would have to pay, and no doubt back-pay, its retained firefighters.

This blog is made possible with generous financial support from (in alphabetical order) the Australasian College of Paramedicine, the Australian Paramedics Association (NSW), the Australian Paramedics Association (Qld), Natural Hazards Research Australia, NSW Rural Fire Service Association and the NSW SES Volunteers Association. I am responsible for the content in this post including any errors or omissions. Any opinions expressed are mine, and do not necessarily reflect the opinion or understanding of the donors.