Internships,Trials and Voluntary Work: When are they Paid Employment?

It is common these days for employers to be approached by students and like interested persons with a view to the acquisition of industry experience which may be needed to develop or begin a career. This is very much a situation that arises in difficult to break into industries like the arts, media and even journalism. As a result of this need to get a break many times arrangements for unpaid work are entered into giving rise to a common issue as to whether or not an employment relationship has actually been created for the purposes of the law.

The legal position as expressed by Fairwork Australia and the Fair Work Ombudsman is to treat each case on its own particular facts and to provide penalties of up to $33,000 for employers failing to meet their obligations under the Fair Work Act 2009 (FW Act).

Briefly the Fair Work Act recognises formal work experience arrangements where they are a mandatory part of an educational or training course (vocational placements). Unpaid work experience placements and internships that don’t meet come under vocational placement can be lawful in some instances where businesses ensure that the intern or work experience participant is not an employee.

Primarily this is determined by looking at whether an employment contract has been formed, that is; whether the parties intended to create a legally binding employment relationship. In doing this the:

• Purpose of the arrangement:experience v output and productivity?

• Length of time:the longer the more likely an employee

• The person’s obligations in the workplace: expectation or requirement of productivity?

• Who benefits from the arrangement? Main benefit of a genuine work placement or internship should flow to the person doing the placement.

• Was the placement entered into through a university or vocational training organisation program? 
   

Note that Volunteer work is not excluded from the above test.

Trial work qualifies as paid employment if it is at the request of the employer or it is expected that the person will be performing productive activities. Where a work experience placement or internship is used to determine a prospective employee’s suitability for a job, the person would be considered an employee for the trial period and should be paid as such. Similarly, probationary employees are paid for all hours worked.

Employers need to take on board that there is growing scrutiny of these arrangements following recent examples both here and abroad of how these types of arrangements can be and are exploited by some employers.

Read More:
Fair Work Australia Fact Sheet
All work and no pay (SMH Article)

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