Unpaid Work Experience Could Result in Breach of Fair Work Act
Wednesday 8 January 2014 @ 9.32 a.m. | Industrial Law
The Fair Work Ombudsman has identified unpaid work in Australia as an emerging issue that warrants attention. Two leading Adelaide Law School academics have completed a report to be submitted to the FWO to address this issue. The problem arises predominantly in unpaid internship where students are offered unpaid work experience. In some cases, this might contravene the Fair Work Act 2009 (Cth).
The Act mandates that employers pay employees a minimum wage. Failure to do so could result in hefty penalties. If a person undertaking work experience or an internship is in reality an employee working under a contract of service, and does not come within the exception, then the legal consequence is that the Fair Work Act 2009 (Cth) applies to the work relationship. This means that the worker is entitled to the rights and benefits, including pay, established by any relevant award, enterprise agreement or minimum wage order, as well as the entitlements provided by the National Employment Standards. Essentially, where the line between passive observer and active work begins to blur, employers could find themselves in breach of the Act.
The report stresses that one of the key requirement for the application of the Act is the existence of an employment contract. However, it finds that the legal test to determine an intention to create legal relations is an objective one, and is not necessarily dependent on the subjective view of the parties. The requirement of valuable consideration does not mean that the payment of money is essential; indeed as several cases make clear, the provision of training or experience can be good consideration in the eyes of the law.
There are some exceptions to this. A vocational placement undertaken as part of an education or training course which is authorised by a law or administrative arrangement is not employment. For example, year 10 work experience students will not fall under the jurisdiction of the Act. Voluntary work for a not-for-profit organisation is also not covered by the Act.
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