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Should you be paying work experience 

students?
Wednesday, 11th February 2015, by Loran McDougall

In today's Workplace Bulletin:
  • When is unpaid work experience lawful?
Dear Reader,

If you take on unpaid work experience students, it’s important to be sure that the arrangement is lawful – particularly given that the Fair Work Ombudsman (FWO) has recently made its first prosecution since it announced its crackdown on unpaid work experience.
The employer received a $24,000 penalty for breaching the Fair Work Act 2009 (Cth) (FW Act) after it took on two students who sought work experience with them. After undertaking short periods of unpaid work experience, the students wished keep working for the employer as volunteers. Under the arrangement, the employer reimbursed the students for expenses, but paid them no wages.
Even though the employer fully cooperated once the FWO intervened, and back paid the students, the $24,000 penalty stood. The FWO cited a “strong public interest” in stopping employers from underpaying employees.
You might be thinking that unpaid work experience can be perfectly legitimate – and you’d be right. Below, Charles Power clarifies when it’s okay and when it’s not.
Until next time,
Jessica Oldfield
Loran McDougall
Editor
Workplace Bulletin
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When is unpaid work experience lawful?
by Charles Power
Editor-in-Chief, Employment Law Practical Handbook
Unpaid work can be lawful. However, you need to be careful when:
  • an employment relationship exists between you, as the employer, and the work experience student; and
  • the arrangement does not involve a vocational placement.
Is there an employment relationship?
If you intend to create a legally binding employment relationship with a person, an employment relationship will exist.
Consider the purpose of the arrangement and who it will benefit. For example, if you benefit from the arrangement because a person is performing work that someone would usually be paid to perform, it is likely that the person is, in fact, an employee. This means you need to pay them. (A legitimate work experience student, on the other hand, is more likely to be a passive observer.)
That said, if a vocational placement is involved, you’re probably in the clear.
Is it a vocational placement?
Under the FW Act, a person who is on a vocational placement is not an employee.
A vocational placement is a placement:
  • undertaken with you;
  • for which a person is not entitled to be paid any remuneration;
  • that is a requirement of an education or training course; and
  • authorised under a law or an administrative arrangement of the Commonwealth, a State or a Territory.
Usually the institution providing the vocational placement will provide documentation to support this – make sure you see it before the placement starts.
Workers on vocational placements are not entitled minimum wages or other statutory minimum employment entitlements under the FW Act.
Regards,
Charles Power
Charles Power
Editor-in-Chief

Employment Law Practical Handbook




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