Internships are often a good way for individuals to gain experience in business and for the business community to benefit from talent. In most cases, internships are intended to be short periods of work experience, usually for students or graduates.
Recently, the Government launched the Graduate Talent Pool, which is intended to match employers with graduates to provide them with opportunities to try out a potential career, gain experience or prove themselves to a potential employer. Only about half of the places offered by the scheme appear to be for paid employment, but it is up to each employer to make sure that they comply with all the relevant employment law issues.
An internship is a general term which can result in different situations from an employment law perspective. Employers have to be careful when considering taking on interns, as there is a risk that the intern could be considered a worker and should receive the National Minimum Wage (NMW). This is a key issue now, as new penalties were introduced in April 09 for employers who do not comply. Not only do employers have to pay the back pay, but also a fine based on half of the arrears due, subject to a minimum of £100 and a maximum of £5000 within 28 days. There may be some exemptions to the NMW, so it is worth checking. For example, students undertaking work experience as part of a “sandwich” course in association with a higher education establishment will be exempt from the NMW, provided the placement does not exceed one year. However, this does not apply to all internships, so employers need to be aware of the risks. Workers will also be entitled to annual leave and rest breaks under the Working Time Regulations 1998.
Workers
A worker is an individual who has entered into or works under a contract of employment, or undertakes to perform work personally for another and the relationship is not genuinely one of a client or customer on the one part and a profession or business undertaking on the other. A worker could also be considered to be an employee if there is an employment contract based on mutuality of obligation; the employer is obliged to provide work and the individual has to carry it out. If they are employees, they are also protected from unfair dismissal. Although most unfair dismissal claims require one year’s service, there are a number of reasons when an employee can claim unfair dismissal from the outset of the employment such as being dismissed for asserting a statutory right.
An employer also has to ensure that there is no infringement of the wide variety of discrimination law. In Great Britain this encompasses sex, race, disability, religion or belief, sexual orientation and age. Those in employment can allege discrimination. Employment is defined fairly widely as “employment under a contract of service or apprenticeship or a contract personally to execute any work or labour…” Discrimination can be alleged at any time regardless of the length of service of the individual.
Work or play?
So all in all, the key issue is whether interns actually work for the employer. Is there that element of working personally for another? If interns are just going to come to a place of work for a few hours a day, to get a feel for “office life” for example, this may not be considered work. Encouraging work shadowing and limiting the period of work experience to a short amount of time might help to demonstrate that the individual was not working for the employer.
However, the more interns actually do for the employer, the more likely it is that they will be working for the employer. Most interns will be looking to impress the employer in the hope of getting a permanent job, so they are likely to undertake work at some point.
Success stories
There are a wide variety of stories recently reported in the press from interns being exploited by working unpaid for several months, to more positive tales of interns having been offered permanent jobs following well-organised internships. The success stories indicate that the interns were genuinely carrying out work from the outset, such as covering another employee’s maternity leave, or having a set job for a fixed period of time. All clear indications that there was genuine work going on and that on the facts there were contracts of employment in place right from the start of the internship, with all the legal responsibility that brings for the employer.
Gillian Dowling is employment technical consultant at Croner.
