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Don't put it in work history. Put it in other activities or something like that. If work history is the only place that it will go into, then put it in there, but be sure to make that you put volunteer work very clearly.
List it as Volunteer Experience...Soemtimes, depending on the work and length of it, it can get you hired faster than job experience b/c you did it on your own, on a voluntary basis, not expecting pay.
It is perfectly reasonable to put volunteer work under the heading of _Work Experience_ because it is relevant work that you have done for an organization, and it is experience that can help your propective employer. To put it elsewhere on the form gives the impression that it was not as important as paid work. Adding that it was unpaid highlights your commitment.
This person is right, it should be listed as if it was a job as experience. I think it needs to be in work experience, just because there was no pay doesn't mean that it wasn't work. I as a manager would be pleased with it being there