Unpaid Internships Under The Spotlight In Australian And Overseas
Tuesday 11 November 2014 @ 10.39 a.m. | Industrial Law
Ongoing legal challenges to unpaid internships are renewing debate about how Australia should deal with young workers looking to get a start in their preferred industry. As unemployment rates hover around 6%, a Federal Circuit court case could have critical ramifications for interns and businesses alike. While unpaid internships can be the norm in many industries, there has been an increasing backlash against the idea both in Australia and overseas. Rosemary Owens from the University of Adelaide told the Sydney Morning Herald that the practice “entrenches disadvantage, because only someone who is well off can afford to work for nothing.”
In Australia
The Fair Work Ombudsman began proceedings last year against Melbourne sports broadcaster Crocmedia. The Ombudsman alleges that Crocmedia misclassified two staff members as volunteers or contractors, when they were in fact casual employees and entitled to be paid an award rate of more than $18 an hour. The Sydney Morning Herald reported that 20 year old Gemma Smith worked there for over six months starting in August 2012. She worked as many as seven days out of 10, from midnight until dawn, which was all unpaid. 23 year old Jonathan Wilkinson worked at the company for 15 months. The Sydney Morning Herald reports “He was paid $2940, but should have made almost seven times that amount.”
Crocmedia has since rectified the underpayments, but Steven Ronson, executive director of the Fair Work Ombudsman told the Sydney Morning Herald:
“The significant alleged underpayment of vulnerable, young workers and the need to deter employers from such behaviour were key factors in the decision to commence legal action.”
Rachel Drew from TressCox Lawyers told SmartCompany that the case highlighted the importance of having the correct documentation for these kind of arrangements:
“Employers need to have clear arrangements with their staff. They may have had full conversations about their entitlements, but if it's not recorded in writing, eight to 12 months later you will be in a very difficult position trying to prove what was agreed…
If you're at a company on work experience, it's often lawful and common for this not to be paid. There isn't any legal limit on how long a person can conduct work experience for, but you would think a court looking at an arrangement which extends over such a longer period of time would think it was a relationship other than a volunteer one.”
Overseas
In the United States, NBCUniversal is attempting to settle litigation with nearly 9,000 unpaid interns who worked on shows like “Saturday Night Live”. According to the Huffington Post, the interns claimed that NBCUniversal incorrectly classified them as interns when they were actually doing employee work. NBCUniversal has not admitted any wrongdoing, although they are currently offering a $6.4 million settlement, although it has not yet been approved by a judge.
The case follows a ruling last year by a judge in New York who “ruled that Fox Searchlight Pictures violated minimum wage and overtime laws by not paying interns who worked on production of the 2010 movie “Black Swan.””
According to The Sydney Morning Herald, governments are leading the charge against unpaid internships in Europe – “[i]n France, for instance, where youth unemployment hit 23.2 per cent after the 2008 financial crisis, employers must offer interns payment after two months.”
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