The law on unpaid work experience: Is the benefit worth the “cost”?

The prevalence of unpaid work experience in Australia is staggering, especially in regards to young adults. A study published by the Commonwealth Department of Employment found 58% of people between the ages of 18 and 29 had completed a period of unpaid work experience. 61% engaged in work experience lasting less than a month, while 36% was longer than a month. 10 respondents said the duration was 6 months or more.

The struggle for a ‘good’ job in the competitive market is perhaps a reason for the high prevalence of unpaid work. This is especially true for young people who are trying to gain a foothold in the labour force, where a degree is no longer enough to secure a well-paid position. The requirements of high university marks and work experience are pressuring young people into unpaid positions. The question on many people’s minds is whether this kind of unpaid work is legal.

Vocational Placements

Vocational placements refer to formal work experience that is required for completion of an education or training course. As the law currently stands, students on vocational placements do not need to be paid.

To qualify as a vocational placement, the work experience must be required to complete a course and the student’s institution must approve the placement. It is important to recognize that while electives are not necessary to complete a course, if work experience is required to complete an elective undertaken by a student, then the associated work experience may be classified as a vocational placement.

Unpaid Trials

Perhaps contrary to popular belief, unpaid trials can be legal. However, there are strict criteria for such a trial. Most prominently, the worker must be under the direct supervision of an appropriate individual for the duration of the trial and they should not be trained in the skills needed for the job. The trial should only be used to demonstrate the experience required by the employer.

For example, if a worker applying for a job as a secretary is taught how to answer and transfer calls, and other skills needed for the position and are only supervised for one hour out of a 7 hour “trial”, it is likely they should have been paid for these hours worked.

Unpaid work experience/unpaid internships

Work experience can be unpaid if it is a vocational placement, however work experience that does not meet these requirements can still be unpaid.

If no employment relationship exists between the worker and the employer, then the worker does not need to be paid. Key indicia of an employment relationship are as follows:

• Intention to enter into an arrangement to perform work for the employer;
• The worker helps with the ordinary operation of the business;
• The placement is for a long period of time;
• A paid worker would usually perform the work undertaken by the worker;
• The worker is expected to perform productive activities;
• Expectation of payment; and
• The employer is receiving the main benefit of the arrangement.

Not all of these indicia need to be fulfilled to establish (or disprove) the existence of an employment relationship.

An interesting case dealing with these issues is Klievens v Cappello Row Lawyers [2017] FWC 5126. In this case, the Fair Work Commission found 10 weeks of unpaid work did not constitute an employment relationship. While Mr Klievens was working full-time, he was given the liberty of working on cases he found interesting, shadowing employees, and performed research that contributed little value to the firm. Further, Mr Klievens received the main benefit of the relationship as it was required to obtain a certificate to practice law. Although his work was covered under a vocational placement (Practical Legal Training or PLT), the case highlights an important consideration – who is receiving the main benefit, and are the tasks normally performed by paid employees? As the majority of Mr Klievens tasks were not billed to clients and added little value to the firm, he was not in an employment relationship.

Volunteering

Volunteering encompasses any work where the main purpose of performing the work is to help another person or entity, such as a school or sporting club. Volunteering is legal (and unpaid) if the parties did not intend to create a legally binding employment relationship, there was no obligation for the volunteer to attend the workplace or perform work, and the volunteer did not expect to be paid.

It is important to remember that just because work is labelled a “vocational placement”, “unpaid trial”, “unpaid work experience”, “unpaid internship” or “volunteering” does not necessarily make it legal for the worker to be unpaid. The criteria of the relevant category must be met.

Further, even if a worker is lawfully unpaid, other workplaces laws, such as those relating to health and safety and discrimination, still apply.

So it’s legal, but is it right?

Clearly, some forms of unpaid work are legal. Whether they are acceptable merits further consideration.

Work experience has clear and definite benefits. Workers gain skills, insight into the industry, and connections. A structured learning environment within the workplace is invaluable and such environments reasonably do not pay workers as they are primarily there to learn and gain experience rather than contribute as a paid employee.

However, some employers are using the safety net of vocational placements and work experience to thrust young people (and individuals new to an area or company) into what are essentially employee positions. These positions are not paid and are without the associated benefits, and do not have the training or education unpaid work experience and vocational placements were designed to have.

Further, unpaid work experience is often limited to individuals from high income families. Where some placements or internships require full-time, unpaid work, or even 2 or 3 days unpaid while studying, it is difficult if not impossible to achieve this without financial support during this period. As a result, industries requiring, or normalising, unpaid placements are limiting a section of the population from being successful in that industry. Fostering a culture that provides opportunities for the wealthy at the expense of the disadvantaged is not something Australia should be promoting.

Paid only internships do run the risk of preventing individuals, and students without experience, from establishing employer connections and being exposed to opportunities. Fewer companies and workplaces may be able to provide paid opportunities than those that provide unpaid opportunities. However, the overall benefit in removing, or even more highly regulating, unpaid placements and internships is the reduction of exploitation in the workplace, and assisting in creating a more even playing field.

While unpaid placements, trials and internships can be legal, determining whether they are legal in specific situations can be as much of a headache as deciding, for many people, whether the experience is worth the “cost”.