The issue of unpaid “work experience” or “internships” has received considerable attention recently.
In 2013 two academics wrote a report for the Fair Work Ombudsman addressing the problem of unpaid work experience arrangements in Australia. In this report, the authors noted that unpaid “internships” or “job placements” are becoming quite common and that there are now a number of agencies operating in Australia to broker internships of job placements.
The Fair Work Act 2009 provides that certain key provisions in relation to terms and conditions of employment contained in the Act do not apply in respect of “vocational placements”. The Fair Work Act defines a “vocational placement” as one that is:
- Undertaken with an employer for which a person is not entitled to be paid remuneration;
- Undertaken as a requirement as an educational training course; and
- Authorised under a law or an administrative arrangement of the Commonwealth, a State or a Territory.
This suggests that if you are doing “work experience” or a “placement” as part of an educational or training course, you are not entitled to be paid for that work experience or placement. However, this is not necessarily always the case.
The Fair Work Ombudsman provides information about “Internships, unpaid work experience and vocational placement”.
As the Fair Work Ombudsman points out, there are a number of indicators to help work out whether a work experience participant or intern is an employee (and therefore entitled to be paid for the work they are doing) or not. These indicators include:
- The purpose of the arrangement – is the purpose to give the participant work experience or to get them to do work to help the ordinary operation of the business. The more productive the work is, the more likely it is that the participant is an employee;
- The length of the placement – the longer the period the more likely the person is an employee;
- Is the participant doing work which would normally or otherwise be done by a paid employee? If so, it is more likely that the person is an employee;
- Is the participant required to come to work and do productive activities? Although someone on work placement may do some productive activities, if they aren’t required to come to work or do productive work then they are less likely to be an employee;
- Who is getting the benefit of the arrangement? In a true “work experience arrangement” the main benefit should be the person who is doing the work rather than the organisation itself.
Accordingly, unpaid work experience placements and internships are less likely to involve an employment relationship if:
- they are mainly for the benefit of the person doing the placement;
- the periods of the placement are relatively short;
- the person doing the placement is not required or expected to do productive work; and
- there is no significant commercial gain or value for the business from the work done.
In a recent decision of the Federal Circuit Court, a media organisation, CrocMedia Pty Ltd was fined $24,000.00 for breaching the Fair Work Act by failing to pay two journalism students who were doing unpaid “internships”. The students in question had undergone short periods of unpaid and genuine work experience with CrocMedia but were subsequently kept on to work as “volunteers” for lengthy periods of time, during which they received only payment for expenses but no wages.
The Fair Work Ombudsman intervened and CrocMedia back paid the students all of the wages which they should have received. Nevertheless, the Federal Circuit Court also felt that it was appropriate to impose a financial penalty in an attempt to draw attention to this issue. Although the penalty that was imposed was relatively modest ($24,000.00 out of a potential maximum of $115,000.00), the Court noted that penalties were likely to increase over time because, as the issue became more publicised, there should be no excuse for employers to try to rely on unpaid workers.
If you have been involved in an unpaid internship or work experience for a significant period of time and believe you should have been paid feel free to speak with today’s blog writer.