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
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 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.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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