Consumer Rights: Internships – useful work experience or unpaid labour?

Some employers ignore or bend the rules to exploit young people trying to enter a profession

Sony settles a claim against it by a disgruntled intern, so are bosses guilty of using unpaid labour to boost their profits?

Internships were hailed as important weapons in the Government's battle against youth unemployment. MPs claimed they'd get people leaving education into work despite dismal jobs figures. Once in the office door the intern would impress and become indispensable ending up with the offer of a permanent, well-paid job where one didn't exist before. That does happen sometimes, but the experience of the majority has been of working for months without hope of joining the ranks of the employed or simply moving from unpaid internship to unpaid internship.

An internship is a method of on-the –job training for would-be IT, design, retail and other professionals. Internships are a bit like the white-collar equivalent of apprenticeships for plumbers, joiners and electricians.

Interns are typically college or university students and can be paid as well as unpaid, but their work placements are meant to be temporary and not to be used as a way to keep unpaid labour contributing value to a company and boosting its profits.

If an internship works well the intern gets experience through shadowing people already working in the profession they'd like to enter and does some work voluntarily for the experience. Students can also use internships to see whether they're interested in a particular career and to make contacts. Experienced interns can be attractive to employers if a job comes up because they often need little or no training.

The problem is that most employers don't know the rules and others bend them. Interns who are given hours during which they have to be at work, with specific tasks to carry out which add value to the company and would otherwise have to be done by a paid employee, are likely to be workers. If an intern can prove that he or she is in reality a worker, they are entitled to be paid at least the national minimum wage. Many of the unpaid internships on offer at the moment are unlawful.

Chris Jarvis set out to prove his internship at Sony was unlawful. He felt he had good grounds to be paid. Chris worked for the company for three months and was given work to do between 9.30am and 6pm. If he hadn't been there to do that work the company would have had to pay someone else to do it. However, when he asked to be paid he was told he was a volunteer and so not entitled to it. He filed a claim against the company at an employment tribunal. Sony has settled his claim before it reached the tribunal and awarded Chris £4,600.

The volunteer argument doesn't hold water.

Charities, voluntary organisations, associated fund-raising operations and statutory bodies can operate with unpaid volunteers. If you volunteer to work at a commercial company and are doing work of value and contributing to the company's profits you qualify for the minimum wage.

The Government claims internships are the answer to getting young people into work, but unpaid ones are possibly part of the problem. Why would any company create paid jobs when they can get the work done for free? Of course there are firms, mostly small ones, which depend on unpaid labour to stay afloat. But surely big, profitable companies should be paying fair wages.

There have been calls on the Government to ban the advertising of thousands of unpaid internships which break the national minimum wage laws. What chance is there of that happening while dozens of MPs have unpaid interns working for them, recruited via public websites?

Deputy Prime Minister Nick Clegg seems to agree something should be done, but argues that an advertising ban would force companies to stop publicising valuable opportunities and drive the unpaid internship market onto the "black market" where the vacancies are filled by people with the best connections.

So while the policymakers back away from tackling the issue perhaps a few more determined interns like Chris Jarvis will force employers to reconsider their reluctance to pay for a job well done.

***

Q: I have two children who will be moving away from home to go to different universities in October which is great for them but a nightmare for me financially. One thing I hadn't added into the calculations is insurance. My son has a car which he wants to take with him. Until now I have been the main driver and the premiums have been affordable as a result. Both have lots of clothes plus Kindles and iPads. What's the most cost-effective way to insure all their stuff, considering they will be living in student houses which probably aren't the safest places in the country? FK

A: If you have been the main driver of the car up until now the premium will go up. Don't be tempted to keep the policy to save money because that's illegal and could be treated as fraud by the insurer. You need to make sure the policy is updated and that you tell the insurance company the truth. If the details aren't accurate the policy will be invalidated which could leave you facing huge bills if any third party were involved in an accident. As far as the clothes and gadgets are concerned contents insurance covers them. There are standalone student contents insurance policies available, but you may find it's cheaper to add you children's belongings to your own home insurance. That would mean their things are covered while away from the family home.

moneyagonyaunt.com

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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