Unpaid work: is it right for you?

Hi Bare Bones Consulting, we have been bombarded with enquiries from people offering to do unpaid work to get a start with us. Can we accept these offers?

Hi right back at you! And great question…given the number of people laid off recently, I’m not surprised to read you’re hearing from people willing to work for free for a period. Before accepting, here’s what you should consider.

Unpaid work can occur in different forms – from vocational placements to unpaid job placements, internships (which we’ve written about previously), work experience and trials.

Unpaid work is typically performed for a number of reasons, including:

• to give a person experience in a job or industry;
• to provide training and skills and/or work experience as part of formal programs to assist people to obtain work;
• to undertake a task or perform a short skills demonstration to assess their suitability for a position; or,
• to volunteer time and effort to a not-for-profit organisation on an ad hoc basis,

There are times when not paying a person for doing certain work is lawful: for defined vocational placements, or where a job seeker is not an employee, but rather is receiving benefits from the government and undertaking a work placement as part of a Commonwealth employment program.

Under the Fair Work Act 2009 (the FW Act), whether an unpaid work arrangement is lawful will depend on whether an employment relationship exists. Unfortunately, there is no definition of employment under the FW Act. Instead, it is a matter of working out whether the arrangement to work involves an employment contract. That contract does not have to be in writing; it can be a purely verbal agreement.

For an employment contract to exist it must be clear that:

• the parties intend to create a legally binding arrangement
• there is a commitment to perform work for the benefit of the business or organisation
• the person performing the work is to get something in return (which might be just experience or training)
• the person must not be performing the work as part of a business of their own.

In cases where the person is actually an employee, they are entitled to pay and conditions under the Fair Work Act.

Employees have to be paid the right pay rate for all time worked, including time spent:

• training (whether this be complete formal or informal training to make sure they have the right skills and knowledge to perform their job. This can include on-the-job training, online or formal training courses or team training
• in team meetings
• opening and closing the business (if the employer requires them to perform this duty)
• working unreasonable trial shifts. This can include where a trial shift extends beyond one shift, where the trial does not reflect the person’s skills or where the person is undertaking the work trial unsupervised.

Care should be exercised before proposing (or accepting) the engagement of a worker on an unpaid basis. Should any sort of employment relationship be shown to have formed, an employer can be exposed to significant risks, such as back payment of minimum wages and other entitlements (such as annual leave, personal/carer’s leave) under the National Employment Standards, or any applicable modern award or enterprise agreement.

Like to know more? Bare Bones Consulting specialises in what we call “cover your butt advice”. We’ll help you get things right first time so you don’t pay the price down the track. And we make things simple. Give us a call to find out more…we’d love to hear from you!