The recent case of Keri Hudson brings the issue and status of "interns" into the spotlight. Keri was an intern with My Village website for two months. During that time she was responsible for a team of writers, scheduled articles and hired interns, but she was not paid. An employment tribunal found that she was a "worker" and was therefore entitled to the national minimum wage and holiday pay. This highlights the fact that employers need to be aware of the legal implications of work experience students, or interns coming into the business.
Practical experience and training in the workplace through work experience, often known as internships, is invaluable for those starting out. However, their use has come under a lot of criticism because individuals are usually unpaid. So, what rights do interns actually have?
There is no legal definition of an internship and therefore the potential employment rights the individual may have will depend to a large extent on what the intern is actually doing and if they are a "worker", or even an "employee", rather than the label applied. An internship should be an opportunity to gain an insight into the workplace, the chance to acquire skills and experience, make important contacts and ultimately help the individual secure a permanent job. It should not be for the purposes of undertaking work.
If, in reality, the intern is expected to work set hours, carry out duties and is actively contributing to the organisation, there is a risk that an employment tribunal could find the individual is a "worker" (as they did with Keri Hudson) for the purposes of entitlement to the national minimum wage and the employer is at risk of claims for up to six years of back-dated unpaid wages from current and former interns (subject to bringing the claim in time).
They would also be entitled to paid holiday and rest breaks under the Working Time Regulations. The definition of a "worker" includes anyone who works under a contract to personally perform work or services and it is a relatively easy test to satisfy. An intern should not actually work but should shadow an employee to learn what to do.
There is no safe minimum or maximum length of time for an internship to last to aviod the intern becoming a worker. Government guidance has suggested that genuine internships should last no more than 2 – 4 weeks and for no more than 40 hours a week. The CIPD found that most last for 3 - 12 months which is much riskier for employers.
If an intern is held by a tribunal to be an "employee", which is a more difficult test to satisfy and involves establishing mutuality of obligation and personal service, they will be entitled to employment rights such as the right not to be unfairly dismissed and to a statutory redundancy payment.
Interns may also be protected by discrimination legislation depending on circumstances and covered by the employer's health and safety obligations.
While there is no specific legal obligation to pay interns, the CIPD has recommended a special interns wage of £2.50 per hour based on the amount paid to apprentices. If the employer reimburses an intern for genuine and reasonable out of pocket expenses this will not mean the intern can claim "worker" status. However, if any other sums are paid or the individual is given other non-monetary benefits, there is the risk that they may be able to claim worker or employee status.
There has been a lot of criticism of internships (including by the CIPD and the left-wing think tank the IPPR), but this has focused on the fact that there is no requirement for them to be paid and because this tends to exclude those from less well-off backgrounds. It remains to be seen whether the coalition Government will introduce any formal legislation for a minimum interns wage but it seems unlikely in the current economic climate. However, the benefits to both parties are clear and internships are recognised as providing a valuable opportunity to gain work experience and contacts which should ultimately help secure paid employment and competition for these positions is often fierce.
In taking on interns, employers should ensure they are fully aware of their responsibilities, take advice on the particular circumstances and put in place measures to minimise the risk of potentially significant claims.
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.