Validity of Internships to be put to the test

A talented young football player, Mark Moric, is taking legal action in the Federal Circuit Court against the Mariners Football Club (the Club) for more than $60,000 in unpaid wages and damages.

Mr Moric alleges that he worked for free for almost four months under what the Club labelled as a ‘trial period’. He also claims that within weeks of the trial period commencing he was promised a professional contract valued at $30,000 a year, was promoted on the Club twitter account, webpage and played a number of pre-season games. Despite this, no contract eventuated from these alleged promises.

Mr Moric’s claim includes damages for the unpaid work leaving him “deeply depressed” and doubting his future playing football.

Internships in Australia

There is a potential for this case to have wide ranging implications for the legality and practicalities around unpaid internships in Australia, not just for professional sport.

Research conducted in 2016 found that 58% of people in Australia aged 18 to 29 years old had done unpaid work in the previous 5 years, and that much of the work was legally questionable.

In order for unpaid work to be lawful there must be no employment relationship in the arrangement.

Legality of Unpaid Internships

When looking at whether an employment relationship exists, the true nature of the arrangement should be considered, not just how the parties have chosen to describe it. The Fair Work Ombudsman provides some guidance on the factors that ought to be taken into consideration:

  1. What is the nature and purpose of the arrangement? Was it to provide a learning experience for the worker, or for the worker to assist in the ordinary operation of the business? If the unpaid worker is conducting productive work rather than learning/training, it is likely an employment relationship exists.
  1. How long is the arrangement for? The longer the unpaid arrangement exists, the more likely that the worker is an employee. However, short arrangements can still constitute an employment relationship.
  1. How significant is the arrangement to the business? Is the work usually performed by paid employees? Does the business require the work to be done? The more fundamental that the work is to the ordinary functioning of the business, the more likely it is that the arrangement is an employment relationship.
  1. What are the person’s obligations? In some cases, a person may be required do some productive work to aid their learning. An employment relationship is unlikely to be found in these circumstances if the role is primarily observational, and, the activities are primarily related to the learning experience of the worker, rather than the operation of the business.
  1. Who benefits from the arrangement? The main benefit from a genuine unpaid work arrangement should flow to the person undertaking the role. If the business or organisation is gaining a significant benefit from the person’s work, an employment relationship is more likely to exist.

We look forward to the abovementioned case proceeding to hearing as it may set an important precedent on the legality of unpaid work, trials and internships in Australia.

If you have any questions about the legality of unpaid internships and whether an unpaid arrangement in fact constitutes employment, please do not hesitate to contact Nick Stevens, Jane Murray or Angharad Owens-Strauss.

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