Formalised internships are a relatively recent phenomenon in Ireland but in certain industries, and particularly in startups, they are seen as the only way for individuals to gain relevant work experience and to increase their employability in a competitive working environment. For businesses, internships are often a reliable and effective way of accessing talent.
The difficulty however for both businesses and interns in Ireland is that internships are unregulated, with no legislation governing such relationships and, unlike in the United States and in the United Kingdom, no governmental guidance has been provided to ensure minimum rights and obligations of the parties.
Key concerns for businesses are whether or not the intern is an employee of the business and whether the intern is entitled to be paid during the internship. We have addressed these concerns below and set out our top tips for businesses engaging interns. Part 2 of this blog will advise businesses in greater detail how to protect intellectual property created by an intern.
What is an intern?
There is no legal definition of an intern under Irish law and, as internships are unregulated, one intern's experience can vary greatly from that of another's. In general an intern will spend time with a business for the purposes of learning about the day-to-day running of the business and the type of work that employees are engaged in. While some interns will be given sporadic or specific work to carry out, other interns might only be given an opportunity to shadow employees in the business.
Businesses should be aware that depending on the type of work carried out by an intern and the reality of the day-to-day relationship between the intern and the business, there is a risk that an intern could be deemed by an employment tribunal or the courts to be an employee of the business. In such circumstances an intern would be entitled to the extensive legal protections and rights afforded to employees under Irish law. Such rights include an entitlement to be paid the national minimum wage, a cap on the number of daily and weekly hours that can be worked, annual leave and a statutory minimum notice of dismissal.
In assessing whether an intern is an employee of the business, a number of factors will be considered such as the extent to which the intern is integrated in to the business, the level of control exercised by the business over the intern, and whether or not there is an obligation that the business provide work for the intern and that the intern is turn is obliged to perform such work, i.e. the mutuality of obligation test. Further, tribunals and courts will look beyond any label put on the relationship by the parties and will instead focus on the reality of the relationship in practice before determining whether or not it should be classified as an employment relationship.
Should interns be paid?
Whether or not an intern should be paid will depend on the nature of the activity carried out by the intern. Businesses should therefore be mindful that if an intern is doing work of value for the business and has a similar level of supervision and responsibility as the rest of the workforce the intern may assert a right to be paid the national minimum wage. The National Minimum Wage Acts 2000 and 2015 (the 'NMW Acts') oblige employers to pay employees engaged under a contract of employment the minimum wage which is currently €9.15 (gross) per hour.
However, where an internship is purely educative or where the intern is only, for example, shadowing other employees in the business, the issue of payment is less likely to arise.
In all circumstances, and at the very least, an intern should be reimbursed for reasonable expenses incurred during the internship.
If a business wants to engage an intern on an unpaid basis in Ireland it is advisable that the internship is short and predominantly educative in value and should be of benefit to the intern. Further, the intern should not replace regular employees and, perhaps most importantly, that the intern clearly understands and agrees in advance that the internship is unpaid.
Top Tips for Businesses
1. Internship Agreement
Although there is no legal obligation to put in place an internship agreement, it is a useful way to clearly set out the duties and obligations of the business and the intern. The internship agreement should specify the activity that the intern will engage in, the duration of the internship, payment (if any) and/or expenses and should be signed by both parties. It is important that the internship agreement should clearly state that the intern is not an employee of the business, although as pointed out above, employment tribunals and courts will look behind any label put on the relationship between the business and the intern to the reality of the relationship.
2. Induction Training
The business should give the intern induction training which will introduce the intern to the relevant policies and procedures of the business. While not an employee, the intern should be told that he/she is expected to comply with any established policies and procedures in the workplace.
In particular, the business should be aware that the business' obligations under health and safety legislation extend to interns. If the business engages interns on a regular basis, it is recommended that reference is made to interns in the business' risk assessments and safety statements.
3. Protect the Business' Confidential Information
For many interns this may be his/her first time working in a professional environment and it is important to explain to interns what is confidential information and the extent of the intern's obligations to protect such information. In a society where "oversharing" of all aspects of people's daily lives is commonplace online, a business should not underestimate the value of comprehensively addressing the protection of confidential information at the intern's induction.
The intern should also sign a document confirming that he/she will not share or use any confidential information learned during the course of the internship. This document should clearly state that such confidentiality obligations extend indefinitely beyond the termination of the internship.
4. Protect the Business' Intellectual Property
The business should ensure that any intellectual property created by an intern during his/her internship is protected and the business asserts ownership over any such intellectual property. The business may wish to insert a clause to this effect in to the internship agreement or alternatively, it may wish to have an intern sign a more comprehensive Intellectual Property Agreement.
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.