Recent years have seen fewer employment opportunities for new graduates and the rise of “intern culture”, a form of quasi-work experience, frequently unpaid or for small stipends, and usually informal in arrangement.
In many industries these internships are a necessary way to get a foot on the career ladder. Intern culture has been in existence in the US for decades and the legalities of these arrangements have been scrutinised and protected by law.
The most recent protection took effect in June when New York prohibited harassment and discrimination against interns by their employers. In Ireland, there is a distinct lack of legal clarity, with internships existing somewhere between volunteering and employment.
Problems begin with classification. Internships should not be confused with apprenticeships. As far back as 1959, the High Court held that arrangements resembling pupil- teacher relationships did not qualify as employment situations, for example medical or legal trainees. Similarly, apprentices under the Industrial Training Act 1967 or Fás schemes are not considered employees.
Many third-level courses include periods of work experience in the form of unpaid work placement. “Internship” is frequently used as a catch-all term to describe any unpaid working situation. This ambiguity allows some in business to obtain low-cost labour while evading the legal responsibilities of being an employer.
The Social Welfare and Pensions Act 2011 introduced the JobBridge scheme and specifically provided that an intern under the scheme is “deemed not to be an employee”. The Oireachtas saw the need to provide a specific statutory exemption to what would otherwise be an employment situation, clear recognition that internships are in the nature of employment.
Not defined in law
The recency of these developments means that “intern” and “internship” are not defined terms in Irish law.
Certainly interns are protected under health and safety law, which applies to all persons in the workplace, but Ireland’s extensive protection is based upon employee status. This is the case for rights such as the minimum wage, a limit on working hours and statutory minimum notice of dismissal.
The question is whether interns can be considered to be employees. Factors which indicate a person is an employee include the level of control exercised by the employer over the person, the extent to which the person is integrated into the workplace and the concept of mutuality of obligation (meaning that an employer is obliged to provide work and the employee obliged to perform it).
If these factors are present in an internship, the arrangement is probably in the nature of employment. Some employers may try to contract out of this and the terms of any agreement or contract can be relevant, but a clause stating that a person is not an employee is not necessarily binding.
Take, for example, a graduate taken on as intern for a period of three months, expected to work a full working week carrying out entry-level work and who is not paid but is given a small stipend. This person would have strong grounds to be considered an employee with all of the attendant rights of that status including minimum wage, minimum notice, holiday entitlements and employment equality protection.
In the US, the Department of Labor uses “educative” as a differentiator between true internships and workplace exploitation.
If an employer derives no immediate advantage from the activities of the intern, the arrangement is likely legal. In this area the US are light years ahead of Ireland (in some cases the Department of Labor will pay back wages from an illegal internship). Irish employers need to exercise care and our legislators need to take action to prevent vulnerable workers being exploited.
I would advise any employer taking on interns to ask what their objective is. If it is an educative process to allow voluntary workplace experience, the arrangement should be short, clearly defined and not involve the person performing services of value.
Short-term, low-cost
If the employer wants short-term, low-cost workers, they should hire on those terms, with the attendant legal rights and responsibilities. The only legally permissible way hire an intern who provides valuable work is through the JobBridge scheme.
People contemplating an internship or managers with unpaid interns should consider the following questions: is this an extended job interview? Can the employer charge for the work? Is the intern carrying out the work of a regular employee?
If the answer to any of these questions is Yes, then the terms of the internship are likely exploitative and strong consideration should be given to ceasing such a precarious legal situation.
It is only a matter of time before this issue arises in legal proceedings. Internships that are found to actually be in the nature of employment may cost employers dearly, not just in terms of a lost case or adverse finding but also in terms of the obligation to make employer’s PRSI contributions to the Revenue Commissioners. David Boughton is a practising barrister and specialist in employment law.