Why Your Charity Should Rethink Volunteer Policies: Lessons From A Court Decision – Charities & Non-Profits – Corporate/Commercial Law

Many charities would be surprised to learn that a court would
intervene in an internal decision about whether to allow a
volunteer to continue their work. However, that is exactly what the
Superior Court of Justice on Ontario did in Hannan v. Scouts
Canada.

A sympathetic court conveniently relied upon the principle that
the governance structures of voluntary organizations may contain
contracts which their members and volunteers can enforce against
the charity. Hannan is a logical extension of the Supreme
Court of Canada’s decisions about contracts in charity
governance, as discussed in my articles, “Why it matters that the Supreme Court decision
reinforced the existence of hidden contracts in charity/nonprofit
governance” and “A Triumph of Administrative Law: 2018’s
Supreme Court of Canada Religious Freedom Cases“.

The Case at a Glance

The case centres around Wayne Hannan, a volunteer with the
Ottawa Sea Scout Troop for a remarkable 65 years. In 2023, the
Scout Commissioner determined not to renew Mr. Hannan’s
volunteer status, prompting legal action.

The main question the court considered was whether decisions
about the role of a volunteer justiciable? Put another way, can a
court intervene in such a decision?

The court ruled that, because there was a contract between the
volunteers and Scouts Canada, Mr. Hannan had a right to
“assume that the organization will follow its stated
policies”. Justice MacLeod notes that while courts are
generally reluctant to second-guess the judgment of a voluntary
association regarding the type of character or leadership skills it
values, it does not necessarily have absolute discretion. The court
found that Scouts Canada had failed to follow its own policies in
Mr. Hannan’s case and ordered that a volunteer reapplication be
processed in good faith, in accordance with the organization’s
screening procedures.

Governance Factors Influencing the Court’s Ruling

In Hannan, there were three governance arrangements and
one characteristic of the organization which likely influenced the
court’s conclusion.

• Firstly, membership was tied to volunteerism, which allowed Mr.
  Hannan to apply as a member and not just a volunteer.




• Secondly, while not mentioned by the court in its decision, the
  Scouts Canada by-law specifically allowed the Board to establish
  Policies and generally required the Board to ensure those Policies
  are carried out.




• Thirdly, Scouts Canada had a number of Policies applicable to
  volunteers, their performance and discipline, which the court
  concluded had not been followed.

The characteristic which the court found particularly important
was the Scouting movement’s emphasis and culture of adherence
to rules, such as the Scout Law and a Code of Conduct for
volunteers, which allowed the court to easily find that Mr. Hannan
was aware of the by-laws, policies and the Code of Conduct and thus
able to rely upon them.

Distinguishing Religious Organizations

Importantly, the court distinguished this case from others
involving religious organizations, such asEthiopian Orthodox Tewahedo Church of Canada
St. Mary Cathedral v. Aga (2021 SCC 22)
(“Aga“) which I have commented on previously. The case does not
meaningfully advance the current state of the common law with
respect to the level of deference the courts are to pay to
religious organizations. The court did comment that “[t]he
Court will not adjudicate questions of religious dogma”;
however, given Scouts Canada was not a religious entity, the
comment is obiter dicta and not binding.

Unlike most other previous court decisions which found a
contractual relationship, this court did not delve into whether
there was any consideration in the contractual relationship,
possibly assuming that Mr. Hannan’s long history of volunteer
work and adherence to the organization’s policies sufficed as
consideration.

Volunteer vs. Member : Key Implications

This case likely does not speak fully into the rights of any
volunteer who is not also a member. In light of this decision,
charities and not-for-profit organizations may wish to carefully
consider with their advisors whom they wish to grant membership
rights to in order to minimize the potential for granting rights to
volunteers where none are intended.

There is a potential danger in linking volunteerism to
membership. While this practice may have been expected and made
sense fifty years ago, large organizations today should carefully
consider whether granting membership rights to volunteers is
necessary, or if other approaches can provide the same sense of
engagement without the legal risks. A volunteer’s contribution
should be acknowledged, but perhaps that does not always require
full membership.

So, what does this case mean for charities and voluntary
organizations?

Policies lie at the heart of this decision. However, this case
should not prompt a wholesale abandonment of policies. Policies
offer organizations flexibility, adaptability, and a structured
framework for handling new challenges. They augment and flesh out
by-laws. They can be changed quickly. Well-crafted policies help
set guidelines for governance, discipline, and membership, among
other things.

Instead, the Hannan case should encourage organizations
to have a conversation with legal governance advisors about how to
strike the right balance between discretion and guidance. This is
best accomplished not just by redrafting policies, but by carefully
considering what should be left unsaid or undocumented,
specifically allocated to the discretion of an officer or the
directors, rigidly embodied in the by-laws, corporate articles or
trust documentation, left to regulatory or legislative provisions
or placed in policies.

A regular review of policies is essential, as they can become
outdated and/or conflict with current regulatory requirements,
legislation, by-laws, insurance policies, or contracts. Policies
adopted from external sources or downloaded from the internet may
not always be fully compliant with local laws or the
organization’s specific needs.

Above all, a policy must actually be enforced. A policy that is
ignored or inconsistently applied can be more harmful than having
no policy at all. Had Scouts Canada adhered to its own policies,
the decision to not renew Mr. Hannan’s volunteer status would
likely have been upheld.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.