Could providing an unpaid work trial cost your business thousands, not to mention its reputation?
It’s not uncommon for employers to include an unpaid work trial as part of their recruitment processes. In fact, according to a study by Australia’s Department of Employment half of Australia’s young adults aged between 18 and 29 years of age have done unpaid work as part of an internship or job trial and an estimated one third of all adults have done some form of unpaid work in the hope of securing their next job.
Clearly unpaid work trials are commonplace, but did you know that in the majority of circumstances unpaid work is in fact unlawful? There is a very fine line between providing an opportunity and exploiting workers as one QLD labour hire company discovered. More about that shortly.
Whether unpaid work arrangements such as a work trial are lawful or not depends on two factors:
- Whether an employment relationship exists and
- Whether the arrangement involves a vocational placement eg. work experience
To be lawful, a work trial must:
- Only be for the purpose of a job applicant demonstrating their skills
- Only last as long as is necessary to demonstrate the person’s skills (a few hours only)
- Be fully supervised for the entire length of the work trial.
If you step outside the rules outlined above for an unpaid work trial or in the absence of a bonafide vocational placement, an employment relationship will be found to exist for which wages and other entitlements must be paid. This was found to be the case when the Fair Work Ombudsman started proceedings in the Federal Court against Workforce Solutions Pty Ltd a QLD based contract labour business.
In this shameful case, 10 hopeful job applicants applied for paid employment with Workforce Solutions. With their job applications turned down due to lack of industry experience, the workers were offered unpaid work experience with the business’s clients operating in the warehousing and manufacturing sector. Up to 26 days of unpaid work was performed under the guise of “work experience”. Underpayment of wages to the value of around $14,000 in total was ordered with the owner of Workforce Solutions facing penalties of up to $54, 000 per breach and $10,800 per violation of the legislation by the business owner. By the way, the unsuspecting clients were charged $15.00 per hour for each worker.
Although the case discussed in this article was a case of “ taking advantage”, if your business conducts unpaid work trials, hosts vocational placements or engages volunteers it is essential you understand and comply with the Fair Work rules to prevent the risk of inadvertently creating an employment relationship that could cost you dearly.
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