Law in practice: taking on interns and running internships

The government is encouraging employers to offer internships to youngsters. Beware – it’s a legal minefield, writes Laura Nadel. 

Tips on using interns
The rights and status of interns.

Internships are increasingly popular with employers and work experience candidates, but there are legal risks associated with their potential employment status. So how can you ensure the intern/employer relationship is mutually beneficial and risk-free?

Internships originated in the US, where employment status rights are minimal. In the UK, interns tend to work in the media, in Parliament, or professions where competition for paid work is fierce and experience is highly valued.

Employers should be concerned about the employment and legal status of interns. Interns may acquire rights as workers under minimum wage and working time laws, or more extensive rights as employees under employment protection laws including those that cover redundancy and unfair dismissal.

Organisations should engage interns as volunteers to reduce any risk of employment or worker status. In genuine volunteer arrangements there is no mutuality of obligation between the volunteer and the organisation, so there is no employment relationship. Melhuish v Redbridge Citizens Advice Bureau clarified this when an unpaid volunteer working for the CAB, who had no obligation to attend work, was held not to be an employee.

Interns, if they are genuine volunteers, do not have to be paid. The employer may voluntarily meet expenses but this is not compulsory. Workers are entitled to the national minimum wage (NMW), so if the intern qualifies as a worker on the tests above, the employer must pay the NMW. It is therefore essential that the tests of volunteering are met or the organisation may commit a criminal offence by failing to pay it.

The position for interns on the rights under the Working Time Regulations 1998 (WTR) regarding holiday pay, rest breaks and weekly working hours is more complex since the regulations state that anyone who is receiving relevant training is entitled to protection under the WTR. This applies even if the interns do not satisfy the definition of ‘worker’.

Organisations should be very wary of extended engagement of interns, and should review their position after three months. By the time an intern has 12 months’ service with the organisation they are likely to have full employment protection against unfair dismissal.

It is advisable to develop an interns policy that clearly sets out the voluntary status of the internship. If there is no obligation on the intern to work then it is unlikely that either a worker or employee relationship will be implied.

Regardless of their legal status, interns have a right to health and safety protection. Also, organisations should be wary of discrimination in recruiting interns, especially where an internship is a method of selecting for future paid employment. Interns have full protection against discrimination.

The Equality Bill aims to reduce social exclusion in the professions where internships are most common, and since unpaid internships are an area where social exclusion operates, organisations recruiting interns should be aware of any new duties that may be imposed in the future.

Laura Nadel is an employment solicitor at DLA Piper


Tips on using interns

  • You must open up opportunities for internships to all candidates regardless of sex, race, sexual orientation, religion or belief, disability or age
  • Record the arrangement with the intern in writing. Make sure it deals with what, if any, pay or expenses will be covered; the fact that there is no obligation to attend; that it complies fully with your policies; that it covers the importance of confidentiality about your business
  • Make sure your managers understand the legal risks of creating obligations for interns to carry out work and implying an employment relationship
  • Always review interns after a maximum of three months
  • Remember that after one year interns will have employment rights.

 


The rights and status of interns

  • The legal status and rights of interns depend on the terms of their appointment and the reality of their treatment by the employer. It is critical that the reality of the relationship reflects what is written down. To avoid risk of any employment or worker status, they must be genuine volunteers. This means that:

  • They must give services freely and voluntarily
  • There should be no obligation either on the organisation to provide work or on the intern to attend work
  • There should be no other contractual obligations between the organisation and the intern
  • The only benefits received for work done should be expenses and necessary training
  • If there are any contractual obligations on the organisation or the intern, or benefits like holiday pay, or the intern is paid and must carry out services personally, then the intern is likely to be a ‘worker’, with worker’s rights
  • If there is a contract requiring personal service and mutual obligation between the intern and the organisation to provide and do work, and some control over the intern, then the intern is likely to be an ‘employee’, with full employment protection rights. If one of these elements is missing, the intern is unlikely to be an employee, but case law makes it clear that mutuality of obligation is decisive. The tribunal’s decision on ‘employment’ or ‘worker’ status depends on the facts of each case.