Most of us engage in unpaid work at some point – whether it is as a volunteer, work experience, traineeships or trials.
But when is unpaid work simply you being taken advantage of and when are you owed unpaid wages?
A report released in 2013 by the Fair Work Ombudsman showed a growing trend for Australian businesses to engage staff on unpaid work schemes rather than employing paid workers.
The Federal Circuit Court recently penalised a Melbourne media company $24,000 for “implementing an unpaid work arrangement that led to two young employees being underpaid thousands of dollars.”
One employee was a sports journalism student and the other a recent journalism graduate.
They both approached the company to gain work experience in the media industry.
Initially, the company classified them as “work experience” but soon changed them to “volunteers” and only reimbursed their personal expenses.
After the investigation both workers received their unpaid wages – one $5,767 and the other $16,401.
When is Unpaid Work Okay?
According to the Fair Work Ombudsman, unpaid work is lawful only when it is a vocational placement or if there is an employment relationship.
A vocational placement is “a formal work experience arrangement that is part of an education or training course”.
An employment relationship exists when an employment contract is in place.
This doesn’t have to be a written contract but can be verbal.
Fair Work says that 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.
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Fair Work Claims is a private consultancy and advocacy firm with no affiliation to any government agency, commission or tribunal.