During the summer break you may have missed an important decision handed down by the Federal Circuit Court when it fined a Melbourne-based company $24,000 for an unpaid work arrangement with two young employees.
So why is this important and how does it impact you?
The employees in question had initially approached the business seeking work experience.
Sound familiar? These days, who isn’t approached by fresh-faced school leavers and students who are desperate to gain work experience and so they offer to work unpaid?
However, in this case, after completing short periods of unpaid work experience at the company, the pair then worked for six months and 12 months as ‘volunteers’.
Yet the ‘volunteers’ routinely worked multiple shifts each week, mostly from midnight-to-6am.
Fair Work inspectors told the company that because the two had performed productive work for the business that was not a formal part of their university studies, they were entitled to be paid the applicable minimum wages.
The Circuit Court Judge also imposed a fine of $24,000.
The judge found that while this case was not a deliberate strategy to exploit the employees, the company was content to receive the benefits that flowed from the arrangement which was exploitative.
Genuine learning opportunity
Of course, this decision doesn’t mean all work experience students must be paid. Vocational placements allow for formal work experience as part of an education or training course.
But, if they’re doing real work which you would otherwise have to pay someone to do, then you have to pay them.
The decision over here follows a number of cases in the United States against employers including Conde Nast, Hearst and Fox Searchlight Pictures for failing to pay or underpaying interns.
So the next time you are approached by a student or young graduate offering to work for no pay so that they can gain work experience, make sure you consider the consequences. To comply with Australian workplace laws in this area, the student or graduate must not be performing work that you would otherwise have to pay someone to do.
As the Fair Work Ombudsman says, “When a worker moves beyond merely learning and observing and starts assisting with business outputs and productivity, workplace laws dictate that the worker must be paid minimum employee entitlements.”.
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