There are some unpaid work arrangements that are lawful and some that are not. Whether an unpaid work arrangement is lawful or not depends upon the nature of the arrangement. Often lawful unpaid work arrangements entered into include:
- vocational placements;
- unpaid internships;
- unpaid work experience; and
- unpaid work trials.
Depending upon the nature of the arrangement, a person doing the work may actually be an employee and be entitled to the minimum rate of pay (for the relevant type of work) and any other minimum employment entitlements. Whether or not the arrangement is lawful or not, depends upon:
- whether an employment relationship exists; or
- whether the arrangement involves a vocational placement.
When does an employment relationship exist?
If an employment relationship is found to exist, the worker should be paid for the work they do. To determine whether an employment relationship exists, the following factors should be considered:
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What is the nature and purpose of the unpaid work arrangement?
Was it to provide a learning experience or was it to get the person to do work to assist with the ordinary operation of the business or organisation? Where the arrangement involves productive work (for example, work that a business would ordinarily have to pay a person to do) rather than just meaningful learning, training and skill development, it is likely to be an employment relationship.
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How long is the unpaid work arrangement for?
The longer the period of the work arrangement, the more likely the person is an employee. Although even relatively short engagements can still be an employment relationship.
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How significant is the unpaid work arrangement to the business?
Is the work normally performed by paid employees? Does the business or organisation need this work to be done? The more integral the work is to the function of the business, the more likely it is that an employment relationship could be found.
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What are the person's obligations to the business?
In some cases, a person engaged in unpaid work might do some productive work to aid their learning. An employment relationship is unlikely to be found in these circumstances if:- the role is primarily observational; and
- the expectation or requirement to perform such activities is incidental to the learning experience and not primarily for the operational benefit of the business or organisation.
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Who benefits from the unpaid work arrangement?
The main benefit from a genuine unpaid work arrangement should flow to the person undertaking the role. If the business or organisation is gaining a significant benefit from the person's work, an employment relationship is more likely to exist.
For more information about employment relationships, you can read our earlier blog, "Case review - when does unpaid work constitute employment?"
Are vocational placements lawful unpaid work?
A vocational placement is a formal work experience arrangement that is part of an education or training course. Vocational placements that fall within the Fair Work Act definition are lawfully unpaid, regardless of whether an employment relationship exists or not.
The definition of a vocational placement under the Fair Work Act means a placement that is:
- undertaken with an employer for which a person is not entitled to be paid any remuneration; and
- undertaken as a requirement of an education or training course; and
- authorised under a law or an administrative arrangement of the Commonwealth, a State or a Territory.
The Fair Work Ombudsman explains that for a vocational placement to be lawful, the following criteria must be met:
- There must be a placement. This can be arranged by the educational or training institution, or a student may initiate the placement with an individual business directly, in line with the requirements of their course.
- There must be no entitlement to pay for the work the student undertakes. Where a student's contract with the host business or organisation entitles them to receive money for the work they perform, the vocational placement will likely have turned into an employment relationship. Similarly, work arrangements covered by industrial awards or agreements are not vocational placements.
- The placement must be done as a requirement of an education or training course. The placement must be a required component of the course as a whole, or of an individual subject or module of the course. It doesn't matter whether that subject is compulsory or an elective chosen by the student.
- The placement must be one that is approved. The institution delivering the course which provides for the placement must be authorised under an Australian, state or territory law or an administrative arrangement of the Commonwealth or a state or territory to do so. Courses offered at universities, TAFE colleges and schools (whether public or private) will all satisfy this requirement, as will bodies authorised to offer training courses under state or territory legislation.
You can read more about vocational placements, including examples, on the Fair Work Ombudsman website here.
Are unpaid job trials lawful?
Before commencing a new job, employers often ask for a work trial to be undertaken. This trial is generally an unpaid short shift in the workplace to help determine a person's suitability for the job.
A work trial can legally be unpaid if it is necessary to evaluate a person's suitability for the role. The Fair Work Ombudsman explains that a job trial can be legal if:
- it involves no more than a demonstration of the person's skills, where they are relevant to a vacant position;
- it is only for as long as needed to demonstrate the skills required for the job. This will be dependent on the nature and complexity of the work, but could range from an hour to one shift;
- the person is under direct supervision of the potential employer (or other appropriate individual) for the entire trial.
If a work trial goes beyond a period that is reasonably required to demonstrate skills required for the job, you must be paid for the work you do at the minimum rate of pay.
Are unpaid work experience and internships lawful?
Work experience or an unpaid internship is often arranged for a person to gain experience in a particular job or industry. An example of this is a university work experience placement.
An unpaid work experience arrangement can be lawful if it is a vocational placement or if there is no employment relationship. The Fair Work Ombudsman explains that for the placement to be lawful:
- the person undertaking the work experience must not be doing "productive work";
- the main benefit of the arrangement should be the person doing the placement; and
- it must be clear that the person is receiving a meaningful learning experience, training or skill development.
Worker's compensation entitlements when performing unpaid work
Worker's compensation schemes are different across Australia, and you should seek advice in your State or Territory if you require further information about any potential worker's compensation for unpaid work.
For information about worker's compensation for a person engaged in unpaid work in Queensland, please visit the WorkSafe Queensland site. Unpaid interns are considered workers for the purposes of worker's compensation in Queensland, however, it is crucial to understand the definition of "intern", which does not include, for example, work experience students, vocational placements or not-for-profit volunteers.
Get help from an employment lawyer
It is important for people considering undertaking unpaid work to be informed about whether or not they should, in fact, be paid for that work. If you're concerned or have queries about whether or not your unpaid work is legal, you should speak with your union or a lawyer experienced in employment law.
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.
