Unpaid Work – Legitimate Internship or Breach of Workplace Laws?

posted by Employment Innovations on April 26th, 2012  Posted in News

The Fair Work Ombudsman has focussed its attention on the issue of unpaid work arrangements, which can encompass a range of circumstances such as vocational placements, internships, work experience and work trials. The research into such unpaid work arrangements will be performed by University of Adelaide Law School academics Andrew Stewart and Rosemary Owens and funded by the Fair Work Ombudsman.

As an employer, how do you know which types of unpaid work arrangements are acceptable, and which might find you on the wrong side of workplace laws? With penalties of up to $33,000 per breach, it is vital that employers can be confident when setting up an arrangement of this kind whether it should be paid or unpaid.

Vocational Placements
A vocational placement is formal work experience that is a requirement of an education or training course, and which is an authorised arrangement by a State or the Commonwealth. These formal vocational placements can be unpaid.

Work Experience & Internships
A period of work experience or an internship that fits within the definition of a formal vocational placement (detailed above) can be unpaid. If the work experience or internship is not a formal vocational placement, then the terms of what has been agreed between the Employer and the person performing the work experience or internship will need to be analysed. Some key factors to look at are:

• Experience vs Assisting the Business – if the key motivator is to give the business a helping hand for a set period, it is likely that an employment relationship will be created and the worker should be paid. If the key motivator is for the worker to observe and gain first-hand experience of the business, it is more likely that it will be genuine work experience and can be unpaid.
• 2 weeks vs 2 months – the length of the placement will be important. The longer the placement, the more likely that an employment relationship will be created, and the worker should be paid.

Unpaid Trial
A business which requires a person to come in for a period to ‘trial’ their ability and suitability to perform a role will be deemed to have created an employment relationship with the worker, and they should be paid for such time spent on the trial. These types of trial periods can be compared with probationary periods, for which a worker should also be paid. If the trial or probationary period does not go well, a termination of the employment relationship should be carried out in accordance with the NES.

There is clearly a fine line between arrangements where a person is placed in a business to obtain invaluable experience of a workplace, and a person that is being exploited without pay. With competition for jobs increasing for young people and the requirement for work experience often being a condition of gaining employment, many young people are crying out for first-hand experience even if it is unpaid. However the willingness of the person to perform work without pay will not be taken into account when determining whether a genuine employment relationship has been created.

The Ombudsman warned employers to be wary of unpaid internships.

“A basic principle of workplace laws that business operators can overlook when considering taking on an unpaid intern is that generally when a person performs work for a business, they are lawfully entitled to be paid for it.

“While there are some legitimate internship arrangements available, business operators who view unpaid interns as a source of free labour are at the greatest risk of breaching workplace laws.”
If a business is unsure whether an arrangements for a placement, work experience or trial period should be paid or unpaid, help is at hand, contact us.

One Response to “Unpaid Work – Legitimate Internship or Breach of Workplace Laws?”

  1. silver price says:

    The term “internship” is loosely defined in today’s work world. The National Society for Experiential Education defines an internship as a “carefully monitored work or volunteer experience in which an individual had intentional learning goals and reflects actively on what he or she is learning throughout the experience.” At the Cabrillo College Student Employment Center, we view internships as learning opportunities, whether paid or unpaid, which are designed to fulfill the dual purpose of reality-testing and skill-building. Reality-testing is the process of clarifying a student’s choice of career direction. Skill-building is the chance to gain valuable experience in a specific career field or work environment. If learning is the emphasis, it is an internship.

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