- Recent proceedings brought by the Fair Work Ombudsman have highlighted the financial risk of utilising unpaid interns in a capacity which gives rise to an employment relationship.
- While the law remains unsettled, interns will likely be deemed as employees when they are undertaking productive work indistinguishable from that of paid employees rather than solely engaging in training and skill development.
- Even where there is no employment relationship between an intern and the host organisation, liability may arise under occupational safety
Internships are becoming increasingly prevalent in the legal sector and elsewhere. While internships can be beneficial for intern and host organisation alike, these atypical workplace arrangements pose several thorny employment law questions. When, as is commonplace, interns are unpaid or only receive a modest ‘stipend’, these dilemmas become particularly pressing.
The foremost question concerns the legal status of the intern. ‘Internship’ is not a legal term of art – it has no meaning at common law or under the industrial relations regulatory landscape created by the Fair Work Act 2009 (Cth). An intern is therefore either an employee, or has no legal relationship whatsoever with the host organisation. There is no middle ground. This article will not consider the status of ‘volunteers’ in this context, although that topic is perhaps deserving of a separate contribution.
Where an intern is objectively considered to be an employee, they are entitled to the minimum wage and basic entitlements as set out in the Fair Work Act, National Employment Standards contained therein and any applicable award or enterprise agreement. Accordingly, organisations who use interns without providing them with the requisite wages and conditions risk exposure to considerable liability – through litigation initiated by either interns themselves or the Fair Work Ombudsman – for non-compliance with the Fair Work Act. This risk has been exacerbated by recent developments.