In the current tough job market, many young people, particularly recent university graduates, are seeking internships and work experience to make them more attractive to future employers.
Many employers are happy to give young people unpaid work experience and internships. However, as the number of unpaid internships increases, many employers and interns are engaging in employment relationships rather than legal unpaid internships.
If an intern has agreed to an employment relationship, then they have the legal right to the working conditions and entitlements under the Fair Work Act 2009. This includes receiving the minimum wage.
Unfortunately, the Fair Work Act doesn’t provide a clear definition of internships and unpaid work experience, so each situation needs to be assessed on its facts.
Verbal or written contract?
An employment relationship can be formed with or without a written contract. A verbal agreement can be enough to form an employment relationship.
Factors that determine an unpaid internship vs employment relationship
The following is a list of factors that help determine whether a particular situation is a legal unpaid internship or an employment relationship:
The reason for the arrangement
Is this work experience for the intern? Or is the supervising organisation simply getting free work (which is more likely to be an employment relationship)?
Length of internship
How long is the internship for? The longer the duration of the internship, the more likely that the arrangement will be an employment relationship.
Significance to the organisation
Is the intern doing work that paid employees would normally do? Is this work that the organisation needs to have completed? If an intern is doing work that the business requires to be completed or would otherwise be done by a paid employee, then this is more likely to be an employment relationship.
How an intern spends their time
Unpaid internships should be mostly observational and most of an intern’s time should be spent learning from others. An intern shouldn’t be doing a lot of substantive or productive tasks.
Who is getting the benefit?
The intern should be the one who mainly benefits from the internship in terms of the work experience they have gained. There should be minimal benefit to the supervising organisation.
Further information on internships and work experience
If you are an intern or are looking at applying for internships, have a look at the resources and support offered by the not-for-profit Interns Australia. There is also more information on the Fair Work Australia website.