Professor Rosemary Owens discusses Unpaid Work and the Law

A recent study commissioned by the Fair Work Commission has highlighted a growing trend for job-seekers to perform unpaid work in order to gain experience and improve their employability. Professor Rosemary Owens, one of the authors of the report, last night presented an intriguing look at the impact of this report on both domestic and international law on behalf of the Australian Labour Law Association (ALLA).

The report released by the Fair Work Commission (FWC) titled, "Experience or Exploitation" was released on 7 February 2013. In particular, the report was released in response to a newspaper article advocating the value to businesses of the ‘free labour’ on offer from eager young interns. The FWC responded by developing additional educative materials on the topic and initiating contact and discussion with major stakeholders. But it also determined that further research would be of assistance in an area that raised complex legal issues, and in April 2012 commissioned Professor Rosemary Owens and Professor Andrew Stewart from the Adelaide Law School to undertake that study.

What is the issue?

There is a growing surge of arrangements for work experience outside formal education and training. As illustrated in the lecture, these can include:

• internships

• unpaid trials

• other types of work titled as "work experience"

Although these types of work may form an accepted entrance pathway into many professions (In Professor Owens' study, the profession of the law was used), the question was raised as to whether these are lawful relationships under the federal Fair Work Act 2009 (Cth) or whether these relationships actually constitute a contract of employment with all the inherent obligations on the employer.

Why is the issue so prevalent?

As illustrated in the lecture last night, Professor Owens' research focused mainly on the social and economic impacts of globalisation and especially the pressure felt by young people who have been disproportionately impacted by the global financial crisis in finding a job after graduation.

There was much discussion about the increase in graduates from university due to the expectation that people be in school for longer and the pressure that creates to have job ready graduates upon completion of education. Professor Owens commented that many graduates confessed to her that it was important that they have any experience, even if it was unpaid, to be able to be considered competitive in the job market.

So what is the Legal Position?

Under the Fair Work Act 2009 (Cth), an employment relationship is not defined except to exclude vocational placements under authorised education and training institutions.

Which leaves common law of contract to cover the employment relationship. There must be:

• Intention to create legal relations

• Consideration

• Mutuality of obligation

Professor Owens went on to discuss common case law examples of unpaid work classed as an employment relationship only highlighting the fact that the Court determines the relationship by the reality not by what the particular contract says.

As was brought up in the questions at the end of the lecture, this leaves today's generation in a difficult situation. Unable to find a graduate job upon leaving university, it may also be illegal to gain the experience required by the industry in unpaid employment, which leaves today's graduates in a form of limbo regarding entrance to their chosen profession.

Professor Owens has articulated 6 key recommendations to the FWC which should go some way to remedying this situation:

• Articulate a clear view as to the legitimacy of unpaid work experience in order to inform education and operational decisions;

• Provide more detailed guidance;

• Institute targeted campaigns;

• Consider instigating test cases;

• More effective liaison with other government agencies; and

• Engagement with stakeholders to create a best practice approach

The most important view that arose after the lecture was a feeling that it was important to class unpaid work as an employment relationship as it would encourage social inclusion and make the relationship more transparent, making the practice of networking or having contacts to get a job equally available to all social classes. Whether this becomes standard practice depends on changes required by all professions to encourage training and graduate development while also being in paid employment.

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