Vocational training or unpaid worker? The uncertain future of unpaid internships

Nick: “You got us a job at Google?” Billy: “Well, not a job job. It’s an interview for an internship that could lead to a job. Nick, this might be the last chance that we’ve got.”

The recently released Hollywood flick, The Internship, portrays a playful spin on life as an intern at Google, with its characters competing for a permanent role at the dreamy tech-giant.  However, the unpaid – learn on the job – internship (better known as ‘work experience’ in Australia) is facing increasing scrutiny from government and has also provoked popular media commentary on the lack of worker rights in these roles.     

Despite the hazy levels of protection available to unpaid workers and interns in Victoria, allowing an individual to work in your workplace for free, even at their request, could expose your business to a potential legal mine field.

Earlier in the year, the Fair Work Ombudsman (FWO) announced plans to audit ‘high risk industries’ that regularly make use of unpaid interns. The FWO has indicated that once an intern is performing ‘work’ which someone would otherwise be paid to perform, the intern has crossed the line into ‘employee status’ and should be paid.  

The practice of businesses offering internships has increased rapidly throughout Australia over the last decade and the extent of protection available to these unpaid workers, at law, has been unclear and open to manipulation.

The definition of an ‘employee’ under the Fair Work Act is where:

  • there is an obligation for the worker to perform the work;
  • the productive work is sufficient consideration for a contract of employment to exist; and
  • the placement is long enough to prove that a contract of employment exists.

However, workers under a ‘vocational placement’ are specifically carved-out from the employee definition.

There is also uneven application of State and Commonwealth OH&S and discrimination laws for interns, which adds further confusion to the mix.

The road ahead for these types of engagements remains unclear.  In the absence of clear legislative reform, more test cases by the FWO on the legality of work experience arrangements, and in particular the scope of ‘vocational placement’, appears to be the logical way forward.      

In the meantime, businesses employing these practices will continue skating on thin ice.  We stress the importance of structuring all ‘vocational placements’ correctly, to ensure the legality of the unpaid arrangement remains robust in the face of a possible challenge by the FWO.  

Download a PDF version of this article:  Vocational training or unpaid worker? The uncertain future of unpaid internships

For further information please contact:

Rohan Kux
Senior Associate
03 9611 0107