Regulating for Decent Work Experience:

Meeting the Challenge of the Rise of the Intern

Rosemary Owens & Andrew StewartAdelaide Law School

Regulating for Decent Work ConferenceInternational Labour Office, Geneva, 8-10 July 2015

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Australian Research Council funded Discovery Project, 2015-2018

‘Work Experience: Labour Law at the Intersection of Work and Education’

Anne Hewitt, Joanna Howe, Rosemary Owens, & Andrew Stewart

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Structure of our paper I Introduction

identifying the issues

2 Globalisation elaborating the contextual basis in which internships

have proliferat

3 Conceptualising Work Relationships at the boundary of work & education

4 Regulatory Strategies examples from different jurisdictions

5 International Standards the need for a global response

6 Concluding comments

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Variety of Forms of Work Experience

Combining work and training apprenticeships vocational education and training work experience for school students ‘work integrated learning’ in universities ‘open market’ internships – established by

businesses, not-for-profit sector, governments

support programs for unemployed or injured workers – mandated or facilitated by governments

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Forms of Work Experience

Growth of arrangements for work experience outside of formal education and training often now performed by an ‘intern’

‘a kind of smokescreen, more brand than job description, lumping together an explosion of intermittent and precarious roles we might otherwise call volunteer, temp, summer job, and so on’ (Ross Perlin, Intern Nation)

compare volunteering: unpaid work performed with the primary purpose of benefiting someone else or furthering a particular belief

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Prevalence of Unpaid Work Experience

No definitive statistics In Europe

2013 survey of 27 countries – 46% of young people had undertaken a traineeship Germany – 74% Netherlands – 79%

In United States estimated 1.3% of labour force estimated at least 50% college students

have undertaken internships

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Prevalence of Unpaid Work Experience

In Australia - evidence of significant use of unpaid trials/training,

especially in certain industries use of unpaid interns to perform

extracurricular work that could or would otherwise be done by paid employees well established in some sectors on the rise in many others

61% of university graduates had undertaken 2 or more internships with no formal contract arrangements (Interns Australia survey – April 2014)

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Unpaid Work Experience – the Issues

Gap between promise and reality not all internships are quality learning experiences no empirical evidence that internship enhances general

employability ‘all new employees have had internship experience’ ‘all

internees will become employees’

Problems of social exclusion promotes inequality, especially in gaining access to the

labour market potential to exacerbate problems of youth employment

Undermines labour standards and decent work for all promotion of precarious, non-standard form of work replacement of paid workers with unpaid/poorly paid

workers

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Context – Globalisation & Work Social and economic impacts of globalization

eg GFC and impacts on youth employment

Pressures on industry productivity and flexibility constancy of need for adaptation, change and

responsiveness

Transformation of work rise of the service and technology sectors transformation of agricultural production and

manufacturing (and now service delivery) – advent of global supply chains

growth in non-standard, precarious work, outsourcing – at both the local and global levels

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Context – ‘Drivers’ of Internships

Demand from individual young persons seduced by the promise of short term trade off/long

term pay-off see no alternative, pervasive culture, an ‘individual’

response to a systemic problem

Business in an era of global competitive pressures benefits – the ‘long interview’, work that has to be

done ‘outsourcing of training’

costs shifted to workers risks of demands for new skills etc always on worker

non-standard employment – reduction of incentives to ‘invest’ in employees who do not remain long term

the production and operation of an informal economy

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Context – ‘Drivers’ of Internships

Developments in Formal Education increased participation in formal education – more

students and for longer periods over- and under-qualification, skills mismatch

education services as part of a global competitive industry regulatory changes – increased number of players both public and private changes in funding arrangements increased global movement of students

pressures for more ‘work integrated learning’ (‘WIL’) young people spending longer in formal education industry demanding ‘job ready’ graduates

Government policies ‘work for the dole’ schemes ‘high end’ aspirations – equipping national citizens to be

global citizens ‘the new Colombo’ scheme in Australia

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Conceptualising Work Relationships

The centrality of the employment relationship generally identified in context of a binary

divide – employee/independent contractor the problem of ‘disguised employment’ the challenge of non-standard employment

ILO Recommendation 198 identifying an employee based on facts categorization by the parties to be

disregarded – no waiver of statutory rights presumption in favour employment

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Conceptualising Work Relationships Are interns in an employment relationship?

What is the significance of a different set of binary divides? work - employment/volunteering

is there a ‘contract’ between the parties? does the identity of the entity for whom the work is done matter? – profit

or not for profit

work – employment/education or training

Is the approach used in distinguishing employees from individual contractors transferable by analogy? consider all the facts, the totality of the circumstances is there a place for a presumption? the limits of individual intentions

Deconstruction of the binary division between employment and education and training – the two are not mutually exclusive and separate work usually/very often involves a process of continual learning

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Regulatory Strategies

Note: context and complexity of regulatory intersections governing both work and education and training

Five different approaches specific regulation of internships regulation by inclusion regulation by exclusion the role of enforcement ‘soft’ law initiatives

codes of conduct, role of civil society, social partners

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Specific Regulation of Internships

Europe little consistent or comprehensive regulation pre-

2014 France – ‘Cherpion Law’, 28 July 2011

internships as part of a course of study tripartite contractual arrangements – intern, educational

institution, business duration – usually 6 months max some (sub-minimal) payments after 2 months probation reduced if subsequently employed not work usually performed by employee mandatory break before next internee taken on mandatory reporting requirements regarding ## etc

problems/criticisms – false enrolments/contracts??

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Specific Regulation of Internships Europe - Quality Framework Agreement for Traineeships (March

2014) prior written agreement – on educational objectives, duration, working

conditions, remuneration or compensation, parties’ rights and obligations; a supervisor to be designated; ensuring respect for laws on working time, rest periods, and holiday

entitlements; clarifying health and accident insurance, as well as sick leave; ensuring a reasonable duration for traineeships – generally not exceeding six

months; clarifying the circumstances in which a traineeship may be extended or renewed; encouraging agreements to clarify the circumstances in which a traineeship may

be terminated; promoting the recognition, assessment and certification of the knowledge, skills

and competences acquired during a traineeship; and promoting transparency – advertisements, terms and conditions of a traineeship,

and the number of trainees typically recruited into ongoing employment.

The Quality Framework Agreement – Follow-up EU members to report on initiatives at end of 2015 Romania, Bulgaria – amongst others to introduce new internship laws Comparative law’s awareness of issues of ‘transplantability’ – eg compare

Germany and Spain An initial reaction? – are the requirements enough to prevent exploitation and

undermining decent work standards

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Regulation by Inclusion The problem for many interns undertaking

internships as part of a course of study- who is responsible eg for minimum standards, sexual harassment?

USA – specific extension of New York’s ‘Human Rights Law’ to interns, s296(c)

Canada – May 2015 – introduced amendment to the federal Canada Labour Code to cover ‘any person who is not an employee, but who

performs for an employer … activities whose primary purpose is to enable the person to acquire knowledge or experience …’

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Regulation by Exclusion Canada – May 2015 – proposed amendment to the federal

Canada Labour Code also exempts Cl167(1.2) those undertaking work as part of formal education

course (time restrictions, intern as beneficiary, not replacing employee, no rights to employment)

Canada – Ontario Employment Standards Act 2000 employee includes ‘a person who receives training from an employee

…’ but exempts those under a college/university program, and those

meeting 6 point test

Australia – Fair Work Act 2009 (Cth), s12 exempts those on ‘vocational placements’ – required part of course,

authourised by government – even if otherwise an employee

Germany – new federal minimum wage law for all with vocational/university degrees – an end to ‘generation internship’ – but excludes internships as part of vocational training provided not >4 months

Effectiveness – depends on enforcement?

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The Role of Law Enforcement

USA - Is an intern an employee? Walling v Portland Terminal Co (1947) – Sup Ct of USA

held railwaymen were trainees, not employees ‘primary beneficiary test’ or ‘totality of circumstances’

American Law Institute, Third Restatement of Employment Law (2015) interns are not employees, they work for their own benefit

A mix of case law – need a USA Supreme Court ruling? Masri v State of Wisconsin Labour and Industry Review

Commission (2014) Wisconsin Sup Ct majority – no pay, therefore not an employee minority – powerful dissent – purpose of the statute

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The Role of Law Enforcement

USA – DoL Guidance – Fact Sheet #71 similar to training in an educational institution primary benefit of intern doesn’t displace regular employees close supervision of staff employer gets no immediate advantage no entitlement to a job at the end of internship

USA - Recent Individual/Class Actions – ‘totality of circumstances’ Wang v Hearst Corporation (2013) – on appeal Glatt v Fox Searchlight Pictures Inc (2013) – on appeal Conde Naste – reported $5.85m settlement NBC Universal – reported $6.4m settlement

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The Role of Law Enforcement

Australia – role of the Fair Work Ombudsman A multi-level, approach – responsive & strategic

proactive identification of the problem research education stakeholder engagement

– young people, migrants, students, educational institutions, business, trade unions, civil society

assisting best practice – the development of model policies and procedures

Enforceable undertakings 2014 - Architecture firm – repayment of $7,000

Test cases FWO v Devine Marine Group Pty Ltd (2015)‘the true substance of the relationship’, statement of intentions notwithstanding, and no matter if some training provided FWO v Crocmedia Pty Ltd (2015)‘exploitative conduct’, ‘profiting from volunteers’

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‘Soft’ Regulation

UK – Public debate and action involvement of all stakeholders

government, industry, trade union, education authorities and institutions, young people

activist awareness raising – use of social media, engagement of civil society

concerns about equity, access and social mobility ‘Gateway to the Professions’ initiative 2011 ‘Common Best Practice Code for Higher

Quality Internships’ adoption of industry specific initiatives/codes of

practice government leading by example

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International Context

International Labour Conference June 2012, resolution concerning The Youth Employment Crisis: A Call for Action:

‘[A]pprenticeships, and other work experience schemes have increased as ways to obtain decent work. However, such mechanisms can run the risk, in some cases, of being used as a way of obtaining cheap labour or replacing existing workers.’

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International Context

ILO comment, August 2012 ‘internships have become increasingly common

in developed economies, as has controversy over the practice’

warning of the dangers if internships become simply a ‘disguised form of employment’ and without any of the benefits they promise, such as real on the job training

2013 - ILO’s Committee of Experts on the Application of Conventions and Recommendations (CEACR) noted this risk in its General Survey on Minimum Wages

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A need for an International Approach?

Role of UN agencies Internships are global big business

business partnering with educational institutions

governments partnering with educational institutions and business

International Labour Standards scope and coverage work includes training value of specifically naming work

relationships in attaining decent work for all

Thank You