Internships & Work Experience: Employment Law Issues

Internships & Work Experience: Employment Law Issues

This article appeared in Industrial Relations News on 3rd October 2013. 

The sudden death of a 21 year old intern working for Bank of America in London last month has led to calls for greater regulation in this area. It is alleged that the intern collapsed from exhaustion after working for 72 hours without a break.  This is the latest, and certainly the most tragic, example of possible exploitation of interns in the UK.  Indeed, earlier this year the UK Department of Business, Innovation and Skills introduced guidelines aimed at preventing employers using unpaid interns to do actual work for which the national minimum wage was due.

In Ireland there has been less discussion around the whole area of internships and work experience programmes.  While the introduction of the JobBridge scheme has led to more awareness of the possibility of internships, businesses must note that while the JobBridge initiative and various FAS schemes are specifically exempted from employment legislation, a private internship or work experience arrangement is not.  Therefore, businesses must be conscious of the risk of an intern being deemed to be an employee with all of the resulting legal protections and rights. That said, businesses should not turn their backs entirely on the possibility of internships; there can be huge benefits to both businesses and interns if the arrangement is handled appropriately. Internships can help businesses to identify a suitable future employee and for the intern, the experience can givean  invaluable insight into a possible career.

What is an Intern?

There is no statutory definition of an intern or a person availing of work experience in Irish law. Similarly, there is no single internship or work placement programme. 

Typically, an intern is an individual who is engaged for a period of time to observe and gain experience in a particular business or profession.  Many internships are unpaid, with provision only that the intern's expenses will be discharged. In the absence of any national guidelines, the terms and conditions of internships vary considerably from business to business.  However, all employers need to be aware that depending on the circumstances of the internship and the actual nature of the work being undertaken, there is a risk that the intern may be found to be an employee.   As a rule of thumb, a genuine internship will generally be for a relatively short period and the intern will be engaged mostly to "observe" rather than actually work.

When will an intern be an employee?

There is no universal definition of "employee" in Irish law. However, employment legislation commonly defines an "employee" as a person engaged under a contract of employment.  A "contract of employment" is typically defined as a contract of service or apprenticeship or a contract with an employment agency to personally provide work to a third party.   Such a contract can be express or implied, oral or written.

Whether or not parties have a contract of employment will depend on the facts of the situation, and while a court or tribunal may look at the terms of any written document, case law demonstrates that the label parties use to describe their relationship will not be determinative.  A court or tribunal will always look at the actual facts of the situation.

There is an enormous volume of case law on the issue of employee status.  However, there is no fixed test to determine where a contract of employment exists.  However, from the case law, it is possible to divine that there must be:

1. Control:  an employer will generally exercise a high degree of direction and control over the way in which the employee works e.g. he will supervise the work in accordance with fixed hours and conditions, providing necessary equipment etc.
2. Mutuality of Obligation: for an employment relationship to exist, the agreement between the parties will centre around the employee using his/ her skills and experience to carry out  work provided by the employer in exchange for remuneration.
3. The other terms of the arrangement are consistent with a contract of employment.

To pay or not to pay?

The entitlement of an intern to payment has not, to date, been tested under the National Minimum Wage Act 2000. However, businesses should note that the definition of a contract of employment under the National Minimum Wage Act 2000 is broad and could easily be held to include an internship/ work placement arrangement.   

Section 2 of the Act defines a contract of employment as meaning either:-

(a) a contract of service or apprenticeship; or

(b) any other contract whereby an individual agrees with another person to do or perform personally any work or service for that person or a third person (whether the third person is a party to the contract) whether the contract is express or implied and, if express, whether or not it is in writing.

In the UK there has been a considerable amount of case law in relation to the entitlement of unpaid interns to the national minimum wage. In the case of Hudson v TPG Web Publishing the Claimant responded to an advert for an unpaid intern placed by the online review site, My Village. She received no training or induction and found herself working for free from 10am until 6pm. She eventually ended up managing 6 other unpaid interns who worked in cramped conditions at a desk designed for one person. The Claimant left after 6 weeks and referred a claim under the UK equivalent of the Payment of Wages Act. 

Notwithstanding the fact that the Claimant agreed at the outset of the arrangement that the internship would be unpaid, the UK Employment Tribunal awarded her £1,025 for 5 weeks work at the national minimum wage rate plus pro rata holiday pay. The Tribunal agreed that the Claimant was not performing the sort of duties normally associated with an unpaid internship but that she was, in reality a worker.  It seems very likely that if the same situation occurred in Ireland, a Rights Commissioner or Tribunal would give a similar decision.

In Vetta v London Dreams Motion Picture Limited an unpaid intern brought a claim under the National Minimum Wage Act in the UK. In considering the case, the Employment Tribunal looked at the entire facts of the case in determining that the Claimant, who had been engaged as an art department assistant on an expenses only basis was a worker within the definition of worker under both the National Minimum Wage Act and the Working Time Regulations. In that case, the Employment Tribunal in reaching its determination focused on the nature of the work that was undertaken, the manner in which the Claimant was recruited and the expectations of her role.

Other Rights of an Intern:  

If an intern is deemed to be an employee, they will acquire various rights under employment legislation.  In the first instance, they will of course be entitled to payment for their work.  They will also be entitled to rest breaks, public holidays and annual leave in accordance with the Organisation of Working Time Act, 1997.  Similarly, they will have rights not to be discriminated against or harassed in accordance with the Employment Equality Acts, 1998 - 2011.  

In every situation, a Court or Tribunal will look at the actual facts of the situation to determine whether not a contract of employment actually exists.  

In the recent case of Ravinder Singh Oberoi v Commissioner of An Garda Siochana, the High Court considered the application of the Equality Acts to volunteers, and its findings are relevant to interns seeking employment status.  In the case, a Sikh member of the Garda Reserve brought a claim of discrimination under section 8 of the Employment Equality Acts on the grounds of religion and ethnicity, because he was unable to wear his turban during training due to a rule requiring that a Garda hat be worn.

The Court considered whether the applicant, as a member of the Garda Reserve constituted an 'employee'. The Court explored the employment status of the applicant and concluded that he was a volunteer and not an employee for the purpose of the Act. The Court stated that in order for there to be a contract of employment and for a person to be an employee, a mutuality of obligation must be present. The Court noted that on the facts there was:

"……no obligation to provide work to a Garda Reserve and there is therefore, no contract of service, or other form of contract whereby an individual agrees with another personally to execute any work or services for that person."

The Court went on to note that:

"A Garda Reserve (member) has no obligation to perform work and can withdraw his or her services with impunity and merely has to notify the District Officer that he intends to be unavailable ... Both the legislative scheme and the documentation relating to the operation of the scheme make it clear that a Garda Reserve is a volunteer."

Best Practice Tips for Engaging Interns:  

• Operate transparent and non-discriminatory procedures for the selection and engagement of interns.  This will minimise the risk of the internship programme being found to be unfair or "crony-ist".   It will also ensure that the organisation has a large pool of candidates from which to select its interns.
• Ensure that there is a written agreement, setting out the terms of the internship.  This document should state the parties' expectations of the internship and set out certain basic terms around training, mentoring and feedback.  While a court or tribunal will look beyond the written description parties give to their relationship, this document should confirm that the purpose of the internship is to give the intern an opportunity to learn about the business and should confirm that the intern is not an employee.   Overly legalistic language should be avoided in this document as it would be inconsistent with the position that the intern is not an employee.
• The internship should be relatively short, preferably for just a few weeks.  The longer an internship continues, the more likely it is that the intern will be doing the actual work of an employee and therefore will acquire employee status.
• There should be a structured plan setting out what the intern will do or learn during the work placement.  This should involve "shadowing" employees; an intern who primarily observes the business rather than does actual work is less likely to be found to be an employee.  However, this of course needs to be balanced with the need for the intern to really learn from the experience.
• The intern should be made aware of the business' policies and procedures that will be applicable during the work placement.  For example, the intern should be made aware of the organisation's Anti- Bullying and Harassment policies.  Similarly, they should be made required to confirm that they will abide by the organisation's requirements with respect to confidential information.
• Where the business agrees to discharge the intern's expenses, this should only be done on the basis of actual verified expenses.  
• Businesses should note that the provisions of the Safety, Health and Welfare at Work Act, 2005 apply to all in the workplace, and not just employees.

By following these tips and being mindful that an intern is not an employee and should not be treated as one, the internship should be a rewarding and beneficial experience for both the business and the individual. 

For further information contact our Employment Law Department.