The hiring of student interns by companies using the formulation "internship agreement" signed with schools or universities has increased significantly in recent years.
This type of agreement is very attractive for the company, since labour law is not applicable to the student interns (there is no mandatory minimum wage, or severance pay, etc.), and, in addition, the Social Security contribution cost for said company is limited to a fixed amount of 48.41 Euros per month for each student intern (much lower than the cost of approximately 33% of the salary of the employee applicable in the employment contract).
However, many companies improperly use this intern formulation as a basis for an “internship agreement” in order to avoid signing employment contracts subject to labour regulations, and, therefore, they benefit from the advantages detailed in the previous paragraph.
Said practice has proliferated unceasingly in the business world and increased the number of company positions which are coined as “fake interns”.
This circumstance has significantly increased the percentage of conflicts in this context, and also therefore, the actions taken by the Labour Inspectorate and judicial decisions on this matter, which have had to outline the distinguishing criteria between the "real student intern" and the "fake student intern".
As an example, and as an illustrative pronouncement on the different characteristics of both concepts, we cite below the Judgment of Valencian High Court in December 14, 2018, which is presented in the following terms:
"The key to distinguishing between an internship agreement and an employment contract is that the purpose of the granting of internships is not to benefit from the work of the student intern, but rather to provide them with help with their training.
The distinguishing feature of the internship agreement is that its main purpose is to facilitate the student intern's study and training, and not to appropriate the results or fruits of the student intern's effort or study, obtaining a benefit for the company's own use.
The essence of the training scholarship is to grant financial assistance of different types to provide the student intern with the appropriate training for the degree certificate that he intends to hold or that he already holds while the ordinary labour relationship does not include that training aspect and remunerates the services provided by the employee according to the orders of the employer, regardless of whether the performance of the work entrusted may have the effect of training, which is inherent in any professional activity.
Hence, the tasks entrusted to the intern must be in line with the purpose of the internship agreement and, if this is not the case, and the tasks that he is to perform are ones included in the professional category, the relationship between the parties will be of the employment nature.
For this reason, there will be no internship agreement when the services of the student intern concerned meet or satisfy needs, which, if not carried out by the intern, would have to be entrusted to another own or subcontracted employee. In this activity, the fundamental characteristics of employment relationship are present, since the work is rewarded and performed under the direction and supervision of another, which is manifested through paid remuneration.
The doctrine that has just been explained is perfectly applicable to the case in hand regarding the consideration of the employment relationship sustained by the student intern concerned and las Cortes Valencianas (legislative body of the Valencian Community), since the services she undertook were highly individualistic, not being possible to replace one intern with another. She was regularly attending the work centre in compliance with the agreed timetable and was enjoying paid holidays. Her work took place on the premises of las Cortes Valencianas, which as a company organizes and provides all the means of work, and so the student intern was incorporated in the organizational environment of the institution, integrated in the department in which the practices were developed as another component of the staff, and finally, the results of the activity of the intern became immediately part of the property of las Cortes Valencianas."
Therefore, in view of all the above, it is highly recommended that all companies act with the greatest prudence in this area, using the formulation of “internship agreement” exclusively in those cases in which the characteristics of a "student intern" as a legal concept clearly apply.
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.