The Central Council of Physical Recreation is in talks with the Inland Revenue and the Department of Trade and Industry after a volunteer claimed he was entitled to the minimum wage.
Margaret Talbot, chief executive of the umbrella organisation for sports clubs, is "very optimistic" that the dispute can be settled. But she warns there are potential consequences for the entire voluntary sector.
"This issue is dynamite," she said, "not least because it's the Year of the Volunteer. If it's not resolved, it could undermine the viability of the sector."
According to the CCPR, 26 per cent of all UK volunteers operate in the sports and recreational field. It is common practice for coaches to be paid an agreed wage by the local authority to work at a sports club and then to put in extra time as a volunteer.
The claim came about because an aggrieved coach felt pressured to put in extra time and felt he should be paid the minimum wage for this.
As the recent case of volunteers claiming unfair dismissal from the RNLI (Third Sector, 9 February) has highlighted, there is no single legal definition of what distinguishes a volunteer from an employee.
Talbot said: "The only way for volunteers to be exempt from claiming the minimum wage is to have a clear definition in law of what a volunteer actually is.
"Including such a definition in a reintroduced Charities Bill is not the answer, as many sports volunteers work at schools and for local authorities. We need an amendment to existing legislation, such as the Minimum Wage Act, which was never meant to be used this way."
Talbot said the answer given by employment minister Gerry Sutcliffe to a question about the number of volunteers that had taken charities to employment tribunals (Third Sector, 2 March) was "very disappointing". She said: "There needs to be dialogue between his office and (charities minister) Fiona Mactaggart, who would be horrified if volunteering was undermined."
- See Editorial, p22 and Letters, p25.