There is growing public opinion that some businesses are exploiting unpaid interns who sometimes work 12 hours or more a day for months with little to no prospect of a paid job at the end.
Richard Brennan, an employment specialist solicitor at TLT, outlines what fashion retailers need to know when running internship schemes and how to avoid the pitfalls.
Employment status of interns
In employment law a person’s employment status helps determine their rights, and their employer’s responsibilities. Depending on an intern’s status, retailers could be exposed to a long list of claims, including for wages if they are a ‘worker’, and even unfair dismissal if an ‘employee’. Whether an intern is a ‘worker’ or an ‘employee’ will depend on a number of circumstantial factors.
It is important that supervisors understand how to inadvertently avoid giving an unwanted ‘worker’ or ‘employee’ status to an intern and should be aware that anything beyond ‘shadowing’ can represent a potential risk.
For example, if the intern supplies valuable work; works unsupervised; or is promised paid work, there is an increased risk that they will be categorised as a ‘worker’. This means that they would have additional rights such as qualifying for the National Minimum Wage (unless they fall within one of the relevant exceptions), the statutory minimum level of paid holiday andprotection against unlawful discrimination.
‘Employee’ status is less likely to apply to short-term internships; however there is a risk it will apply if the intern is controlled to a sufficient degree by the business.
Be clear on your obligations
Many retailers are not clear or aware of their responsibilities when dealing with interns. As well as attracting negative publicity for the business and brand, it can also carry serious legal consequences, including:
- criminal convictions;
- costly and time-consuming tribunal claims;
Interns are not the only ones prepared to challenge unpaid work. At the end of last year, the Government published new guidance on interns’ rights and HM Revenue & Customs (the enforcer of the National Minimum Wage) are due to carry out spot-checks on over 200 employers. This is obviously an important issue for a sector that uses a lot of interns. Retailers must make sure that they are clear on their obligations regarding interns or face costly consequences.