Unpaid work - getting experience by working for nothing?
An unpaid work "trial" is illegal. Trial period must be paid employment.
Unpaid work trial cannot be disguised as a voluntary arrangement.
But I volunteered to work for nothing!
Genuine volunteers are not employees. For a voluntary arrangement to be genuine there must be no intention between an employer and employee to create an employment relationship. This means that a volunteer must agree that they will not be paid for any work performed. The arrangement must be at the volunteer’s own free will and there cannot be any element of coercion in the relationship.
As an employer, you can invite a job applicant to look around the workplace, observe the work, demonstrate basic skills and meet other staff. However, if you require someone to perform productive work, or spend a shift in the workplace, then you are obliged to ensure they receive the same minimum entitlements under an award or agreement as your other employees.
Student placements, work experience and internships: maybe a mandatory part of an education or training course.
If the worker is not paid, it is a requirement of education or training and it is authorised under a law then the persons "vocational placement" is NOT covered by Fair Work and therefore minimum wage does NOT apply. Other legislation may cause Workers Compensation and certainly OHS laws to apply.
But what if they aren't supposed to be an employee
How can I tell whether a person is an employee?
Whether a person is an employee will depend on whether the internship or work experience arrangement created an employment relationship between the business and the person. A key factor is whether the business and the person intended to create a legally binding employment relationship.
When assessing whether the parties intended to form a legally binding employment relationship, some key factors include:
- Purpose of the arrangement. Was it to provide work experience to the person or was it to get the person to do work to assist with the business outputs and productivity? Arrangements in which the intention is to benefit the person are less likely to involve employment relationships
- Length of time. Generally, the longer the period of placement, the more likely the person is an employee
- The person’s obligations in the workplace. Although the person may perform some productive activities during a placement, they are less likely to be considered an employee if there is no expectation or requirement of productivity in the workplace
- Who benefits from the arrangement? The main benefit of a genuine work experience placement or internship should flow to the person doing the placement. If a business is gaining a significant benefit as a result of engaging the person this may indicate an employment relationship has been formed
- Was the placement entered into through a program sanctioned by a university or vocational training organisation? If it is then it is likely that the arrangement is not an employment relationship.
Unpaid work experience placements or internships are less likely to involve employment if:
- they are mainly for the benefit of the person
- the periods of the placements are relatively short
- the person is not required or expected to do productive work
- there is no significant commercial gain or value for the business derived out of the work.
Unpaid work experience programs are less likely to involve employment if they are primarily observational.
ICB Summary: If a person is providing productive work for a business we believe the fall back position is that they are an employee and minimum wage obligations apply. This is not black and white.
For further information refer to FairWork - Student placement and unpaid work
Updated: 5th September, 2014