Employers who exploit unpaid workers are facing a crackdown by the Fair Work Ombudsman and face fines up to $51,000. Individuals may be fined up to $10,200.
The Ombudsman Nicholas Wilson said last week in a report on unpaid work there was a growing trend to exploit people taken on as interns or an unpaid trial basis by keeping them hanging on with promises for paid positions that never eventuate.
The retail, services, hospitality and media industries are the worst offenders and will be singled out for attention, but he will also be examining hairdressers, beauticians, restaurants and cafes.
These industries are increasingly using unpaid interns or trials to perform work that would otherwise be done by paid employees.
Some international students and migrant workers are actually paying agents to find them unpaid internships in the hope of securing permanent residency.
Mr Wilson said guidelines were clear for what work should be paid and the circumstances under which employers can have unpaid workers. Under the Fair Work Act employees must be paid the minimum wage for work that is not linked with an educational or training program. Generally, if the person has done work that would have been done by a paid employee, then they should be paid.
But when it comes to clearly defining what constitutes a working relationship then the law is open to interpretation. Many have to be determined on a case by case basis and there are different considerations in each industry.
In media for instance, it is commonly accepted young people start off working for free to get a foot inside the industry. The question is how long that arrangement can last before it breaches the law.
The Ombudsman is considering legal action in a range of industries to help establish more clarity. "There is a clear need for cases to be brought before the courts to test out the legality of arrangements that appear to undermine the standards established by the Act," Mr Wilson said.
One common example is the young person taken on at a shop or café for a week's unpaid "trial" with the promise of a job if all goes well.
"That's the type of exploitation that will be my focus," Mr Wilson said.
Employment Law expert Kym Luke of Stacks/The Law Firm said both employers and unpaid workers should be certain of their rights and obligations under the law. Employers in those industries about to be targeted would be wise to get legal advice on whether they are doing the right thing. Those who've been exploited might need legal help to get justice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
