Emil Ford Lawyers

Work experience or wilful exploitation?

The Federal Circuit Court of Australia recently ordered Crocmedia, a media company, to pay a $24,000 penalty for breaches of the Fair Work Act relating to an unpaid work experience scheme. This case raises important considerations for employers that accept unpaid work experience interns or volunteers.

The arrangement

Two students initially contacted the company requesting a position as work experience interns. At the conclusion of the three week work experience, the students continued to work for the company as producers on a late night program, for a period of one year in the case of one of the students, and six months in the case of the other. They were reclassified as “volunteers”, but received a reimbursement of “expenses” for each shift that they performed.

Investigation by the Fair Work Ombudsman

The two students lodged complaints to the Fair Work Ombudsman for their employment arrangement, which found that the employer had contravened the Fair Work Act in the following ways:

(a) failure to pay minimum wages;
(b) failure to pay casual loadings;
(c) failure to pay in full, at least monthly; and
(d) failure to provide pay slips.

The company cooperated with the Fair Work Ombudsman and rectified the alleged underpayments, totalling $22,168. The company was not entitled to offset its previous payments against the wages owing, since these had been classified as “expenses”.

The Court’s decision

The Fair Work Ombudsman brought proceedings for breaches of the Fair Work Act. In imposing a penalty of $24,000, the Court gave consideration to mitigating factors such as the company’s early rectification, remorse and full cooperation, corrective action and lack of any previous breaches.

Implications for employers

This decision highlights that it is imperative for employers to correctly classify their employees, and ensure that they meet the minimum entitlements under national employment legislation. The Court acknowledged the difficulties involved with work experience arrangements, but warned that “profiting from ‘volunteers’ is not acceptable conduct” within Australia’s industrial relations scheme and the penalties for future contraventions are likely to increase significantly.

Please contact or if you have concerns about interns or volunteers working with you.

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