Legal issues for community organisations

The word community is spelled out with letters on a pin board

There are many aspects of running a volunteer-based organisation that involve legal issues. Addressing legal issues doesn't have to be complex or complicated. If you are committed to having good management practices, and strive to be a professional, ethical and well-regarded organisation, then legal and regulatory compliance will be a central part of managing and conducting your business.

This article introduces some of the common areas of managing and governing a volunteer-based organisation that involve legal issues. While it is good to learn about the legal issues and their implications, it is important to seek appropriate legal advice about how best to address legal issues in your organisation.

Select a topic to find out more:

Legal issues and volunteers

Just as with employing people, there are legal issues and responsibilities that arise when you have volunteers in your organisation. In legal terms, it is important to make the distinction between people who are volunteers and people who are employees in your organisation as they have different rights and obligations in an organisation. Protecting their exposure to risk and liabilities can also be quite different too.

Some of the legal issues you need to consider when taking on volunteers include:

  • Is the person an employee, contractor or volunteer?
  • Do you treat all volunteers and prospective volunteers equally and without discrimination?
  • Do you have up to date working with children checks f or relevant volunteers?
  • Have you provided all volunteers with a Volunteer Agreement outlining their roles and responsibilities?
  • Do you have risk management and insurance in place to protect volunteers in case of workplace health and safety issues? See our Risk, safety and insurance section for more info about risk and insurance in volunteer-based organisations.
  • Do you have risk management and insurance in place to protect volunteers and/or your organisation if issues of volunteer negligence arise? See our Risk, safety and insurance section for more info about risk and insurance in volunteer-based organisations.
  • Does the organisation have arrangements in place to ensure that it owns the copyright to any intellectual property produced by a volunteer?
  • Do any tax laws apply to any payments that your organisation makes to its volunteers?
  • Do you have policies in place to protect the privacy of any personal information supplied to you by your volunteers?

Find out more about legal issues and volunteers on the PILCHConnect website.

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Legal duties of committees or boards

All community groups need a committee or board of management to help steer the group's strategy and direction and ensure compliance with legal, financial, ethical and operational requirements.

While most duties of a committee of management or board are simply about keeping the organisation running in the right direction there are also some duties that relate to legal matters. These legal duties are not meant to be complex or onerous – most of them rely on using common sense – but it's important to be aware of them.

The legal duties of committees or boards are quite similar regardless of the legal structure of your community organisation or how big or small it is, e.g. unincorporated group, incorporated association, cooperative etc. These legal duties are:

  • The duty to act in good faith and in the best interests of the organisation
  • The duty to act with reasonable care and skill
  • The duty to not improperly use information or position
  • The duty to disclose and manage conflicts of interest

Some of these duties are written down in common law and some are written into legislation.

Find out more about the legal duties of committees or boards of management on the PILCHConnect website.

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Financial reporting

No matter whether your community organisation or group is unincorporated or incorporated, you still have has legal responsibilities in regard to managing and reporting finances.

These responsibilities differ depending on how your organisation is set up and whether or not it is incorporated. It is important to seek legal and financial advice in regard to the reporting requirements of your organisation.

Incorporated associations and companies limited by guarantee have very specific financial reporting requirements that our set out in the laws and regulations that govern their operation. Again, you should seek legal and financial advice to ensure that your organisation complies with these requirements.

Find out more about financial reporting on the PILCHConnect website.

Find links and information about reporting and audit requirements on the Not For Profit Compliance Support Centre.

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Workplace safety

In Victoria, occupational health and safety is regulated under the Occupational Health and Safety Act 2004 (OHS Act) and the Occupational Health and Safety Regulations 2007.

Many people think that the OHS Act only applies to organisations with employees but this legislation is very broad and may also apply to organisations that have volunteers. Of course, a legal obligation shouldn’t be the only motivating factor for ensuring the health and safety of the volunteers in your organisation.

Volunteers deserve the same risk management and safety measures as you give to paid employees.

You can find out more about your organisation's legal responsibilities and other health and safety issues on our Workplace health and safety page.

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Community organisation who raise money to finance their programs and activities may also need to meet certain legal requirements in regard to their fundraising activities.

Different legal requirements apply for fundraising activities (e.g. fundraising events, door knocks and roadside collections, selling goods as donations or at opportunity shops), grants and funding sought from government or philanthropic organisations, gifts and bequests, raffles and lotteries and membership fees.

Find out more about legal issues and fundraising on the PILCHConnect website.

Find information about whether a not-for-profit organisation needs to register as a fundraiser as well as links to information about permits and licence requirements for different types of fundraising on the Not For Profit Compliance Support Centre.

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Equal opportunity

In April 2010 the Victorian Government passed the Equal Opportunity Act 2010 replacing the previous legislation of 1995. The new provisions of the Equal Opportunity Act 2010 take effect in August 2011.

The Equal Opportunity Act 2010 strengthens Victoria’s discrimination laws by changing some key definitions and strengthening the role and responsibilities of the Victorian Equal Opportunity and Human Rights Commission.

Under the Equal Opportunity Act 2010 it is against the law to discriminate against a person because of attributes including their age, gender, marital status and race. It is also against the law to sexually harass a person.

It is important to note that the Equal Opportunity Act 2010 extends its protection against sexual harassment to include volunteer workers. It does not, however, specifically extend protection against discrimination to volunteer workers.

Regardless of the legal considerations, a professional and ethical volunteer-based organisation should treat all employees and volunteers in a non-discriminatory manner in areas including recruitment, training, supervision, recognition and reward.

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Some not-for-profit organisations are required to comply with the National Privacy Principles of the Commonwealth Privacy Act 1988.

The privacy provisions of the Privacy Act 1988 apply to all businesses and non-profit organisations with a turnover of $3 million of more. Not-for-profit organisation with a turnover of less than $3 million are except from the provisions unless they are related to another business with a turnover of more than $3 million, provide a health service and keep health records, disclose personal information for a benefit, service or advantage, provide someone else with a benefit, service or advantage or provide a service for a Commonwealth contract.

Even if your organisation is not required to comply, it is good management practice to follow the relevant privacy principles. The principles are quite practical in their application and reflect best practice in the way  personal information should be handled.

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Tools and resources

Our Community – Legal Obligations for Community Groups
Discusses the different kinds of legal issues that are faced by community groups including incorporation, fundraising, workplace safety, taxation, discrimination, privacy, contracts and issues of liability and negligence.

PILCHConnect – Volunteers
Basic information about legal issues that are relevant to volunteers in community organisations.

PILCHConnect – Guide to Legal Duties of Committee or Board Members
Basic information about the legal issues duties of committees or boards of management for not-for-profit community organisations.

PILCHConnect – Financial Reporting
Information about the legal duties of a community organisation in regard to financial reporting.

PILCHConnect – Fundraising
Information about legal issues and fundraising.

Australasian Association of Volunteer Administrators – Resource Kit
Browse the Equal Employment Opportunity and Privacy Law resource kit for information and tips about complying with relevant equal opportunity and privacy laws for volunteer-based organisations.