Unpaid internships: Essential work experience or exploitation?

Kiwi David Hyde who lived in a tent during his UN internship admitted it was a publicity stunt.

Kiwi David Hyde who lived in a tent during his UN internship admitted it was a publicity stunt.

Unpaid internships have been making headlines in international media for all the wrong reasons, with class action lawsuits settled for millions of dollars.

Employers say they're essential to give inexperienced workers a foot in the door. Critics say they can be exploitative, and are only a realistic option for rich kids whose parents can pay their rent while they're working for free.

The recent case of David Hyde, the UN intern who quit his unpaid role after living in a tent in Geneva, has sparked the debate in New Zealand.

READ MORE: Kiwi intern who lived in a tent showed 'moral leadership', says mum

Internships have always been common in some industries, such as advertising, arts and media - and many postgraduate courses require students to undertake unpaid work placement.

However, student advocates say unpaid internships are on the rise and are becoming more demanding, with some employers asking interns to work full-time for no remuneration.

Employment law expert Blair Scotland, partner at Wellington law firm Dundas Street, saids  no unpaid internship case has been brought before the courts here, but it's "only a matter of time."

"The legal situation is an interesting question. For the employer, there is a danger of forming an employment relationship in a situation where an employer derives value from the work done."

In 2013, Chief Employment Court Judge Graeme Colgan upheld the Employment Relations Authority's decision to award $6200 to a dismissed Salad Bowl worker, including payment for wages, after she was sacked following a two-day work trial. 

READ MORE: Ruling may end unpaid job trials

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In his wider findings - which were not binding - Judge Colgan said that, while the Salad Bowl case was about work trials, the potential for "abuse of vulnerable job seekers" was more concerning in the case of long unpaid or underpaid internships.

"Australian research… illustrates that substantially longer periods are a feature of [unpaid] work in a number of sectors and that, in extreme cases, unpaid or inadequately remunerated 'internships' may occupy very long periods.

"The principles applied to the categorisation in law of pre-permanent employment trial periods must be applicable not just to the particular facts of one case but across the board of such arrangements."

Interns do not have a legal status, and as yet it's an issue untested in New Zealand courts.

Scotland says that a document signed by both parties, which clearly sets out that the internship is unpaid, would help clarify the legal situation for both the employer and intern.

"What's important is that there's a mutual understanding of the arrangement."

The nature of the work performed can also be important. If an employer is able to make money from a person's labour without paying them, that could be considered exploitative.

"Is the employer able to turn a dollar from it? The challenge would be from someone who had started unpaid work, and then turned around and said actually, this is paid work I'm being asked to do." 

In July this year, the United States Court of Appeals for the Second Circuit ruled that the determining factor in whether an intern should be paid is the 'primary beneficiary test' - whether the internship was primarily for the education of the intern, or whether the employer benefited the most by having the intern take on the responsibilities of a paid employee.

Council of Trade Unions secretary Sam Huggard says that while there's nothing in the law to say someone can't volunteer, the comparison between volunteering and internships isn't a good one.

"When people volunteer, it's because they want to do something for the common good. With unpaid internships, a company is getting the benefit of that unpaid labour, so they're not the same at all."

Victoria University student president Rick Zwaan says that interns could be put off taking legal action because they're in a disadvantaged position compared to employers.

"People in these positions are really unlikely to speak up."

While Zwaan knew  some students wanted to do unpaid internships, they were the domain of the wealthy, he said.

"It's a small, selected group because it's only those who can afford to do so. It definitely further ingrains social inequality."

 - Stuff

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