FWO to crack down on unpaid work experience after research reveals exploitation: What your business needs to do

The Fair Work Ombudsman today announced a new focus on educating employers and employees about the legitimacy of schemes for unpaid work experience, following research by the University of Adelaide Law School.

The FWO commissioned the research, published in the report Experience or Exploitation?, which uncovered a growing number of businesses using unpaid work schemes as an alternative to hiring paid staff.

The report also found young people and migrant workers are particularly vulnerable to being exploited through these schemes.

Key sectors of concern for unpaid work were trials in the hair and beauty industry, retail and hospitality while unpaid internships in the media, accounting and legal professions are quite widespread.

Fair Work Ombudsman Nicholas Wilson said he was concerned at the growing prevalence of unpaid work experience in Australia but said he did not want to stifle genuine learning and development opportunities.

“There are many quite legitimate work-based learning programs and vocational placements which genuinely enhance the learning of participants,” he said in a statement.

“Generally these vocational placements are linked directly to formalised training through universities or other training institutions.”

Instead, Wilson said he would focus on exploitation.

“A young person who is required to work unpaid in a café for a full week to test his or her ‘suitability’ for a paid position as a barista, waiter or kitchen-hand is clearly being exploited,” he says.

“That’s the type of exploitation that will be my focus.”

The Fair Work Ombudsman is going to work towards implementing the report’s six recommendations, which are:

• to better define unpaid work experience;
• expand guidance and education activities;
• conduct targeted campaigns in key industries identified in the report;
• instigate legal action before relevant courts where appropriate;
• improve liaison with relevant government agencies; and
• engage with key stakeholders representing employers and employees, vulnerable workers and educational institutions.

The report’s co-author, Professor Rosemary Owens of the University of Adelaide, told SmartCompany it is very important small businesses understand what the law is in relation to unpaid work experience, internships and trials.

“The evidence we have encountered suggests it is quite a widespread problem.

“In the US, internships are ubiquitous and the Fair Work Ombudsman has noted quite an increase in complaints to his agency and certainly our report absolutely supports that,” she says.

Owens says one of the worst examples she came across was one worker who said they did work for more than 12 months unpaid.

“The broad message is that these unpaid internships are said to act as a gateway to professional employment often. The very large concern that sits behind our report is that if there is not transparency with these internships, and they are not compliant with the law, there are limited people who can access them; and these people tend to be wealthier as they are the only ones who can afford to work unpaid,” she says.

Owens offered the following guidance for businesses that use unpaid trials, internships or work experience:

1. Is there a contract?

Look at whether there is a written or oral contract of employment.

“The broad principles of the law are that if someone has a contract of employment then they are covered by the legislation,” she says.

“If someone is doing work for you and you are not paying them in broad terms, it is unlawful under the legislation if that person is an employee.”

2. Vocational educational placements are exempt

Owens says there is a special exemption in the legislation for those who are working on a vocational educational placement.

“But that has quite a strict meaning, it is for those who are doing work as a placement as part of a course or degree they are studying and that course has to be approved by government,” she says.

3. Check with the Fair Work Ombudsman

“If businesses are at all hesitant they should contact the Fair Work Ombudsman,” Owens says.

She says the FWO is a good port of call as it has the responsibility for providing education and information about rights and responsibilities.