Unpaid work experience; the law

The following case deals with an application for an unfair dismissal remedy by a young law graduate who sought to gain some experience with a law firm. The Fair Work Commission reviewed the law about vocational experience arrangements and ultimately ruled that in all the circumstances the graduate was not an employee and therefore was not able to sue for an unfair dismissal remedy. The case also deals with when work experience arrangements will be lawful and when they are not.

“Unpaid work experience, job placements and internships that are not vocational placements will be unlawful if the person is in an employment relationship with the business or organisation they are doing the work for. Section 13 of the FW Act expressly excludes from the definition of “national system employee” a person “on a vocational placement.”

“Vocational placement” is defined as,

“…a placement that is:

  1. a) undertaken with an employer for which a person is not entitled to be paid any remuneration; and
  2. b) undertaken as a requirement of an education or training course; and
  3. c) authorised under a law or an administrative arrangement of the Commonwealth, a State or Territory.” 32

To work out whether or not a person is an employee each case must be considered on its own facts. It is a matter of working out whether the arrangement involves the creation of an employment contract. That contract does not have to be in writing; it can be a purely verbal agreement. An employment contract can arise even where the parties call the arrangement something else, say it is not employment, or if a person agrees not to be paid wages for work they do. …..

There are a range of indicators that an employment relationship exists, and it needs to be assessed on a case by case basis.  Key indicators are:

  1. a) an intention to enter into an agreed arrangement to do work for the employer
  2. b) a commitment by the person to perform work for the benefit of the business or organisation and not as part of a running a business of their own, and
  3. c) an expectation that the person receive payment for their work.

The indicators below are useful in determining whether an employment relationship exists and an unpaid work experience, job placement or internship is likely to be unlawful……………………….If the purpose of the work experience, placement or internship to give the person work experience it is less likely to be an employment relationship. But if the person is doing work to help with the ordinary operation of the business or organisation it may be an employment relationship arises.  The more productive work that is involved (rather than just observation, learning, training or skill development), the more likely it is that the person is an employee……………….In the present matter the Applicant had finished a law degree. He was eager to obtain a practising certificate. He could not do so without undertaking PLT. In the Relevant Period the Respondent did not charge clients for the work he performed. In all the circumstances of this matter the main benefit of the arrangement from 5 August 2016 to 14 October 2014 flowed to the Applicant. There was a benefit to the Respondent too, but the PLT benefited the Applicant more in his desire to be admitted to practice.

There were also additional benefits such as meals, taxis and a work related trip. However, none of these benefits constituted consideration for the work performed…………………….For the reasons above I am not satisfied that the Relevant Period or any part of the PLT should be counted as an employment relationship between the Applicant and the Respondent.

Consequently, the Commission, as presently constituted, is not satisfied that the Applicant was protected from unfair dismissal because he did not complete the MEP. Consequently, his application for an unfair dismissal remedy must be dismissed.”

 

Klievens v Cappello Rowe Lawyers (2017) FWC 512 delivered 3 October 2017 per Johns C