While unpaid work provides valuable experience for students transitioning from study to work, employers need be aware of their obligations, particularly with an increased media and regulatory spotlight on sham internships and exploited students. The Federal Government’s recent announcement of the Youth Jobs PaTH program, designed to create around 10,000 new internship positions in the hospitality industry, has led the Fair Work Ombudsman to caution employers about the need to comply with relevant legislation.
What is a Vocational Placement or Internship?
- There must be a placement – which can be arranged by the educational or training organisation or the student;
- The placement must be a required component of an education or training course;
- The student is not entitled to any payment for work performed; and
- The student’s course must be a government approved course.
What should you consider?
- Is the student undertaking productive work or work that would have otherwise been performed by a paid employee? Are you charging clients for the work that the student has completed? If so, this may indicate an employment relationship.
- Who is receiving the benefit of the work? It should be the student receiving the benefit, not your business.
- What is the duration of the placement? Generally, the longer the placement, the more likely it is that an employment relationship will be formed, because of the increased possibility that the student will be undertaking productive work and performing tasks beyond what the placement originally required and intended.
- Did you intend to form a legally binding employment relationship?
- Any work the student performs beyond what is specified in the training contract will not be covered by the vocational arrangement. If work is performed beyond the scope of the placement, an employment relationship may have been formed, meaning the student is eligible for remuneration and other employee entitlements.
Remember that an agreement to provide any remuneration to the student will risk turning the placement into an employment relationship. You can reimburse students for expenses or give the student a gratuity with no obligation attached. However, any payment should be labelled differently to clearly show it is not a payment for the work undertaken.
Are you thinking about engaging a student on vocational placement? Contact us to ensure your company is meeting your obligations.