The hidden costs of free riding lessons: employment law considerations

For many equestrian enthusiasts, working at a riding school in exchange for lessons seems like an ideal arrangement for everyone. However, such arrangements may present significant legal concerns, particularly regarding employment law.

Employment status: employee, worker or volunteer?

This is an important consideration for both the riding school and the individual, as this will impact the rights and obligations of each party. In short, a volunteer is not afforded the statutory rights of that of a worker or an employee (e.g. entitlement to National Minimum Wage, holiday pay, statutory sick pay etc). Furthermore, the necessary components for a contract of employment to arise are not present in a volunteer scenario, these being: mutuality of obligation, personal service and control.

So, what makes an individual an employee or worker and not a volunteer?

Distinguishing between these categories is based on legal tests established in case law, which involve a multifactorial assessment of the working relationship.

A volunteer will not fall within the definition of a worker (or employee) if they have no form of contract of employment or contract to perform work or provide services, and receive no financial renumeration or benefits in kind for providing their services.

Under the Employment Rights Act 1996 (ERA), a worker is defined as an individual who has entered into or works under either of the following:

• a contract of employment
• any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract, unless that other party is a client or customer of the individual.

As for an employee, this is defined as “an individual who has entered into or works under a contract of employment”. This means that the broader category of ‘worker’ also encompasses the narrower category of ‘employee’. A contract of employment is then defined under the ERA as “a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing”.

In order to establish whether the individual is a worker (or even an employee), it is necessary to establish whether there is a contract in the first instance. It is worth emphasising that a contract does not have to be express, or even written, to determine the employment status of an individual. A verbal contract is sufficient for these purposes. To establish a ‘contract’, there must be the existence of four basic elements:

• offer
• acceptance
• consideration
• intention to create legal relations.

This is fact dependent, but it is likely that an offer and acceptance of that offer will be easily established, whether an individual be considered a worker, employee or a volunteer. It therefore often falls to the latter two points to determine whether a contract of service has arisen; this is not always clear-cut.

The provision of lessons in exchange for work, while not monetary, is likely to amount to proper ‘consideration’ for contractual purposes. It would then be a case of examining the nature of the agreement to consider whether this amounted to a binding contract, and whether it has the necessary components of a contract of employment or a contract of service.

In considering the status of a volunteer, a work-for-lessons agreement is unlikely to qualify as volunteering, since it involves receiving a benefit in kind – namely, lessons – as a form of consideration. Such an arrangement runs the risk of being considered by an employment tribunal to give rise to the status of ‘worker’, or even an ‘employee’. It should be highlighted that while, for example, an express volunteer agreement may be in place, this does not automatically render the status of the individual to one of a volunteer. Employment status is very much dependent on the reality of the specific arrangements and the nature of the relationship between the parties rather than the written terms.

What are the National Minimum Wage (NMW) considerations?

As per the above, if a contract of service is established, the individual will likely be considered a worker, if not necessarily an employee. While this results in certain obligations for both parties (for more information, see our previous article), one of the main concerns in a ‘work-for-lessons arrangement’ is compliance with the National Minimum Wage Act 1998 (the Act). Under the Act, individuals classified as workers must be paid at least the minimum wage.

In work-for-lessons arrangements, the lessons are often treated as being ‘paid in kind’, meaning that individuals may receive a discounted wage, in exchange for lessons. As such, employers must ensure that any work-for-lessons arrangement does not violate minimum wage regulations.

The Birketts view

As an employer considering these arrangements, it is important to compare the value of any lessons provided against the National Minimum Wage (NMW). If the value of the work performed exceeds the value of the lessons, the individual should be compensated with an appropriate wage. However, this assessment can be complex – particularly when individuals work variable hours. Therefore, it is generally advisable to avoid such arrangements. Instead, employers should either:

• maintain clear, separate contracts for workers who are paid wages and independently pay for lessons or
• engage individuals on a voluntary basis, who also pay for their own lessons.

This approach helps ensure compliance with employment regulations and avoids potential legal complications.

If you wish to engage individuals on a purely voluntary basis, the tips below may be useful in ensuring you don’t end up inadvertently rendering the relationship one of a worker/employee:

• avoid providing payments to volunteers that might be interpreted as wages. Reimbursements for genuine out-of-pocket expenses should be clearly distinguished and, where possible, supported by receipts
• remove perks that could be seen as consideration
• minimise the obligations placed on volunteers. Allowing them the freedom to decline tasks and choose when (and how long) to participate helps demonstrate the absence of a binding contractual relationship
• avoid using language that makes the arrangement sound contractual and adopt flexible language, such as “usual” and “suggested”. This will reinforce the informal nature of the arrangement.

If you need guidance regarding equestrian employment or volunteer arrangements, please contact our Employment Team. Our dedicated equine specialists have specific expertise in this area and would be pleased to support you.