Financial management

Free labour from an intern – is it legal?

- August 10, 2016 2 MIN READ

What are internships?

An intern is defined by the Fair Work Ombudsman as a method of work, not a title.

An internship is a method of on-the-job training and can be okay as long as the person is not in an employment relationship. Placements should be meaningful and provide the intern with the opportunity to expand and grow their skills. It is not an opportunity for the business to take advantage and use them to replace a worker.

The Fair Work Ombudsman outlines that unpaid work can take different forms including vocational placements, unpaid internships, and unpaid work experience.

The Fair Work Ombudsman provides five indicators on how to tell if an intern is actually an employee:

1. Purpose of the work experience

Consider the purpose of the work the intern is undertaking. Is the purpose to give an intern work experience or to do work that helps with the ordinary operation of the business.

The more productive the work, the more likely the person undertaking the work is an employee.

2. Length of time of arrangement

The longer the period the more likely the person is an employee.

If the period of time is longer than initially contemplated when making the commitment to undertake work experience, then it is more likely that the person is an employee.  However, even a short engagement that isn’t extended could establish that the intern was an employee.

3. Is the work normally done by an employee

Consider if the organisation needs the work done and if so, would it normally be done by an employee.

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If the intern is doing work which would usually done by a paid worker, then they may actually be an employee.

4. Expectation on intern

Even if the intern is doing something productive they may not be expected to turn up or to even undertake productive activities.

The less likely the intern is required to be at the business the less likely they will be considered an employee.

5. Who is getting the benefit?

The main benefit of the work should lay with the intern, not the business. If the business or organisation is getting more out of the internship than the intern, then they are more likely to be an employee.

Remember: it is possible for any person who has been working “voluntarily” to look back up to six years and ask for their entitlements as an employee through the Fair Work Ombudsman or the Federal Circuit Court. This would include payment under the appropriate award, any accrued holiday pay, and superannuation.