There are many different kinds of work experience arrangements, including those that are a mandatory requirement of an education or training course (also known as vocational or student placements), optional work placements and internships.
Legitimate work-based learning programs and placements give students an opportunity to get experience in the workplace. These placements are usually linked to formal training through universities or other training institutions and are a valuable part of students’ studies.
Under the Fair Work Act 2009, a vocational placement is a working arrangement where all of the following apply:
- the worker is not paid a wage
- it is a requirement of an Australian based education or training course
- it is authorised under a law or administrative arrangement of the Commonwealth, a State or Territory.
A person in an arrangement that meets all of these criteria is not covered by the Fair Work Act is not entitled to the minimum wages and other entitlements provided in the National Employment Standards and any applicable modern awards or agreement.
Note: Just because someone isn’t covered by the Fair Work Act does not mean that they are not covered by other legislation, such as workers compensation laws, occupational health and safety, discrimination and other relevant laws. You’ll need to contact the relevant authority in your State or Territory for details. You can find a complete list of State and Territory workers’ compensation and occupational health and safety agencies and their contact details on our Useful links page.
What if the arrangement is not a vocational placement?
If a work experience arrangement or internship does not meet all of the above criteria, the next step is to determine whether the person undertaking the arrangement is an employee. If they are an employee in the national system they will be covered by the Fair Work Act 2009 and are entitled to the minimum wages and provisions of the National Employment Standards and any applicable modern award or agreement.
How can I tell whether a person is an employee?
Whether a person is an employee will depend on whether the internship or work experience arrangement created an employment relationship between the business and the person. A key factor is whether the business and the person intended to create a legally binding employment relationship.
When assessing whether the parties intended to form a legally binding employment relationship, some key factors include:
- Purpose of the arrangement. Was it to provide work experience to the person or was it to get the person to do work to assist with the business outputs and productivity? Arrangements in which the intention is to benefit the person are less likely to involve employment relationships
- Length of time. Generally, the longer the period of placement, the more likely the person is an employee
- The person’s obligations in the workplace. Although the person may perform some productive activities during a placement, they are less likely to be considered an employee if there is no expectation or requirement of productivity in the workplace
- Who benefits from the arrangement? The main benefit of a genuine work experience placement or internship should flow to the person doing the placement. If a business is gaining a significant benefit as a result of engaging the person this may indicate an employment relationship has been formed
- Was the placement entered into through a program sanctioned by a university or vocational training organisation? If it is then it is likely that the arrangement is not an employment relationship.
Unpaid work experience placements or internships are less likely to involve employment if:
- they are mainly for the benefit of the person
- the periods of the placements are relatively short
- the person is not required or expected to do productive work
- there is no significant commercial gain or value for the business derived out of the work.
Unpaid work experience programs are less likely to involve employment if they are primarily observational.
Julianne is studying law, and has been given the opportunity to undertake a 2 week internship with a legal firm during the summer holidays. While the internship is not a mandatory requirement of her course, she knows that she will be receiving a real benefit from gaining on the job experience in the field that she would eventually like to work.
During the internship, Julianne observes others working, takes notes and asks questions about what they are doing. She sits in on court hearings and client meetings, and attends a seminar that is provided to clients.
Because Julianne is not undertaking productive work for the legal firm, the period of the internship is limited and she is the person gaining the main benefit from the arrangement, Julianne is unlikely to be an employee. This means that she would not be entitled to payment of wages, even though the internship is not a required part of her course.
Determining whether an unpaid work experience or internship arrangement is genuine will depend on the individual circumstances of each arrangement and can involve complex legal issues. If you are in a work experience arrangement or internship that does not appear to meet all of the criteria to be a vocational placement as defined by the Fair Work Act or you believe that you are not receiving appropriate entitlements you can Contact us for assistance and further information.
Educational institutions and participating businesses should seek professional advice from their solicitor, chamber of commerce or industry association before entering into any arrangement. This will help ensure that businesses are aware of whether an employment relationship has been created and avoid any failure to meet their obligations under the Fair Work Act 2009.