I had someone recently ask me about unpaid work and what rules govern this situation. We often hear about students gaining experience and doing placements but when is this being pushed too far and students are being exploited. If you saw the post about Job Advertisements last month you would have seen the position that had a trial period in it and the discussion surrounding that.
Unpaid work can take on different forms – from vocational placements, unpaid internships, unpaid work experience, and unpaid trials. They are entered into for a number of reasons.
- to give a person experience in a job or industry
- to test a person’s job skills
- to volunteer time and effort to a not-for-profit organisation.
With some of these arrangements, it’s okay not to pay the person doing the work. With other arrangements, the person is actually an employee and should be paid.
Sometimes a person is asked to do an unpaid trial when being evaluated for a vacant job. This skill demonstration is used to determine if the person is suitable for the job, and is sometimes called a work trial.
A work trial is okay when:
- it involves no more than a demonstration of the person’s skills, where they are directly relevant to a vacant position
- it’s only for as long as needed to demonstrate the skills required for the job. This will be dependent on the nature and complexity of the work, but could range from an hour to one shift
- the person is under direct supervision for the entire trial.
Any period beyond what is reasonably required to demonstrate the skills required for the job must be paid at the appropriate minimum rate of pay. If an employer wants to further assess a candidate’s suitability, they could employ the person as a casual employee and/or for a probationary period and pay them accordingly for all hours worked.
Student placements give learners the opportunity to apply the theory and skills they gained while studying in a professional workplace. The placements can give students the chance to get the skills they need to transition successfully from study to work. At the same time, industry gets the opportunity to enrich student learning experiences and increase the number of work-ready graduates. Placements that meet the definition of a vocational placement under the Fair Work Act 2009 (the Act) are lawfully unpaid.
What is a vocational placement? – Under the FW Act, a vocational placement is lawfully unpaid if it meets all the following criteria:
- Placements that meet the definition of a vocational placement under the Fair Work Act 2009 (the Act) are lawfully unpaid.
- The placements can give students the chance to get the skills they need to transition successfully from study to work. At the same time, the industry gets the opportunity to enrich student learning experiences and increase the number of work-ready graduates.
- Student placements give learners the opportunity to apply the theory and skills they gained while studying in a professional workplace.
- There must be a placement
- This can be arranged by the educational or training institution, or a student may initiate the placement with an individual business directly, in line with the requirements of their course.
- There must be no entitlement to pay for the work the student undertakes
- Where a student’s contract with the host business or organisation entitles them to receive money for the work they perform, the vocational placement will likely have turned into an employment relationship. Similarly, work arrangements covered by industrial awards or agreements are not vocational placements.
- The placement must be done as a requirement of an education or training course
- The placement must be a required component of the course as a whole, or of an individual subject or module of the course. It doesn’t matter whether that subject is compulsory or an elective chosen by the student.
- The placement must be one that is approved
- The institution delivering the course which provides for the placement must be authorised under an Australian, state, or territory law or an administrative arrangement of the Commonwealth or a state or territory to do so. Courses offered at universities, TAFE colleges, and schools (whether public or private) will all satisfy this requirement, as will bodies authorised to offer training courses under state or territory legislation.
When all of the above criteria are satisfied, hosts are not required to pay students entitlements under the FW Act. However, a host can choose to pay the student at their own discretion if they wish.
If the placement doesn’t meet all of the above criteria, it won’t be a vocational placement under the FW Act. However, this doesn’t automatically mean that the person is an employee and entitled to payment. The next step is to determine whether or not the person is in an employment relationship.
Work experience & internships
Should the person get paid?
Unpaid work experience and unpaid internships that are not vocational placements are okay as long as the person isn’t in an employment relationship. People in employment relationships are employees of a business and entitled to;
- A minimum wage (A wage in an award or registered agreement that sets out the minimum amount of money an employee has to receive for work performed.)
- The National Employment Standards (The 10 minimum entitlements that have to be provided to all employees.)
- The terms of any applicable award or registered agreement (A document between an employer and their employees regarding employment conditions. An agreement must be approved by and registered with the Fair Work Commission. Examples of registered agreements include enterprise agreements, collective agreements, greenfields agreements, certified agreements, Australian workplace agreements (AWA) and individual transitional employment agreements (ITEA))
How do I tell if someone’s an employee? – You can use the below indicators to help work out whether a work experience participant or intern is an employee:
- Reason for the arrangement – Is the purpose of the work experience or internship to give the person work experience or to get the person to do work to help with the ordinary operation of the business? The more productive work that’s involved (rather than just observation), the more likely it is that the person’s an employee.
- Length of time – Generally, the longer the period of the arrangement, the more likely the person is an employee.
- Significance to the business – Is the work normally done by paid employees? Does the 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 / organisation has to do, it’s more likely the person is an employee.
- What the person is doing – Although the person may do some productive activities, they’re less likely to be an employee if they aren’t expected or required to come to work or do productive activities.
- 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 benefits from engaging the person, it’s more likely the person is an employee.
For more information on Unpaid work you can go to Fair Work Ombudsman
If you need support with bringing in an intern or looking at work placements book a FREE 30-minute discovery sessions with us using the below