5 key questions to ensuring a lawful placement
Over the past 18 months, internships have been hitting the headlines for all the wrong reasons. A few employers have been using internships to take advantage of people who are trying to gain experience in the workforce.
The Fairwork Ombudsman considers unpaid work experience and internships that are not vocational placements to be unlawful if the person is in an employment relationship with the business or organisation they are doing the work for.
People in employment relationships are employees of a business and entitled to:
a minimum wage,
the National Employment Standards,
the terms of any applicable award or registered agreement.
Employers need to consider whether or not a person is an employee. It is a matter of working out whether the arrangement involves the creation of an employment contract. That contract does not have to be in writing, it can be a purely verbal agreement.
There are a range of indicators that an employment relationship exists, and it needs to be assessed on a case by case basis.
Key indicators of an employment relationship are:
an intention to enter into an agreed arrangement to do work for the employer ,
a commitment by the person to perform work for the benefit of the business or organisation and not as part of a running a business of their own, and
an expectation that the person will receive payment for their work.
An employer needs to consider the following questions to ensure the internship is not unlawful:
1. What is the purpose of the internship?
If the purpose of the internship is to give the person work experience it is less likely to be an employment relationship. But if the person is doing work to help with the ordinary operation of the business or organisation it may be an employment relationship arises. The more productive work that’s involved (rather than just observation, learning, training or skill development), the more likely it is that the person’s an employee.
2. How long does the arrangement run for?
Generally, the longer the time period of the arrangement, the more likely the person is an employee.
3. What are the person’s work activities?
Is the person doing work that is significant to the business or normally done by paid employees? Does the business or organisation need this work to be done? If the person is doing work that would otherwise be done by an employee, or it's work that the business or organisation has to do, it's more likely the person is an employee.
4. Is the person expected or required to work?
Although the person may do some productive activities as part of a learning experience, training or skill development, they're less likely to be an employee if they aren't expected or required by the business or organisation to come to work or do productive activities.
5. Who's getting the benefit?
The person who’s doing the work should get the main benefit from the arrangement. If a business or organisation is getting the main benefit from engaging the person and their work, it’s more likely the person is an employee.
The Fair Work Ombudsman website provides information to help employers better understand the various forms of unpaid work.
WorkPlacePLUS has a specialised HR team that can support employers to meet their workplace obligations. To discuss any HR issues you may have please contact us today.