Learning and Teaching ForumJanuary 2011

NMW and unpaid graduate jobsEquality Act 2010

Placement and the UMF

National Minimum Wage

Does everyone doing ‘work’ in the UK have to be paid the NMW?

NO

includinggraduate interns?

I don’t think so!!

What will affect NMW application?

• age

• nature of organisation

• employed / self employed status

• nature of activity

• student status

Basic Law

• NMW introduced 1st April1999 under the National Minimum Wage Act 1998 and the National Minimum Wage Regulations 1999 (SI 1999/584)

• Most ‘workers’ to be paid NMW.

NMW Rates from October 2010

• £5.93 / hour 21 years +

• £4.92 / hour 18 – 20 years

• £3.64 / hour 16 – 17 years

Accommodation offset :

• £4.61 / day

• £32.27 / week

Information and Administration

• HMRC

www.hmrc.gov.uk/nmw/

• Pay and Work Rights Helpline

0800 917 2368

www.payandworkrightscampaign.direct.gov.uk

• www.businesslink.gov.uk/bdotg/action/layer?topicId=1074402393

Penalties

• Enforcement notices from HMRC.

• Appeals to Employment Tribunal.

• Increased powers introduced in January 2009 under the Employment Act 2008 giving Police and Criminal Evidence Act 1984 powers of entry, search and seizure.

• Prosecution in Magistrates or Crown Court.

Classifications

• Workers (most) - NMW

• Workers (some) - exempt

• Voluntary Workers - exempt

• Volunteers - exempt

Workers

Most within NMW.

Individual cannot contract out - s.49 NMW Act.

‘Workers’ but exempt• Modern apprentices (if < 19 or in 1st year) s12(3) • Other government training schemes s12(5)(a)

• HE up to first degree s12(8)(a)(i)

• Teacher training s12(8)(a)(ii)

• Schemes assisting homeless back to work s12(11)

• Share fishermen s43

• Voluntary workers s44

• Prisoners s45

• Agricultural workers (Agricultural Wages Board) s46

• s12 = National Minimum Wage Regulations 1999• ss43-46 = National Minimum Wage Act 1998

Sandwich Students / Work Placements

• NMW Regs 1999, s12(8)(a) those in HE and required to do work experience as part of their course (for up to 1 year) before the course ends are exempt from NMW.

No need to pay NMW

• HE, for the purposes of s12(8) - 1999 Regulations - includes :

• Higher education course (following SI 2000/1989)

• DipHE• HND• HNC – BTech• Cert. Ed

Education Reform Act 1988, Schedule 6

Further and Higher Education (Scotland) Act 1992

Further Education (Northern Ireland) Order 1997

Voluntary WorkersStatus based on type of business : charity, voluntary sector, fund-raising organisation, amateur sports club, etc.

• Exempt under s44 NMW Act 1998

• NB : not everyone working in this sector are ‘voluntary workers’. If people are doing work for remuneration they must be paid NMW.

• If ‘voluntary worker’ - can only be paid expenses and some b-i-k.

No need to pay NMW

Volunteerthe classification attempted for graduate interns

Any sector.

• Not a ‘worker’.

• No contract– No obligations / service– No intention to create legal relations.

• No money, other than expenses.

No need to pay NMW

Key features of ‘Volunteer’ Status

• Lack of mutual obligation.

• Lack of contract.

What is a worker?

Per s54(3) 1998 Act

• Contract - written or oral, express or implied

• Normal contractual principles– Offer, acceptance, consideration, intention to

create legal relations.

• Obligation to do something - work or services performed rather than just shadowing

What is a contract?• Offer and acceptance• Consideration

work / services

experience /

job opportunities

• Intention to create legal relations

intern provider

Does it matter what the student is called?

NO

In the event of a dispute, tribunals and courts look at the facts - calling someone an ‘intern’ or a ‘volunteer’ will not avoid NMW requirements if they are actually working (and not within any of the exemptions).

House of Commons Library Note SN/BT/697

‘Common sense would suggest that if someone is doing a ‘job’ with set hours and tasks they are under an obligation to work.’

But, the note goes on to say : interns generally not ‘workers’ because …

• No obligation to perform work … not a ‘worker’.

• Intern doesn’t expect pay, sponsor doesn’t expect to pay them. Intern works for personal and educational reasons, not to provide a service. ‘Sponsor’ gains very little from the relationship.

• But … take care not to treat interns as workers. Do not subject them to any obligation to perform work or provide services which may give rise to NMW rights.

Dept. of Finance and Administration guidance note – 2007

Interns who are obliged to do work under the control of the Member or Member’s representative are likely to be workers under the NMW legislation and so should be paid the minimum wage.

Unite Agreement - Interns for MPs

• ‘Interns provide an important service for Members of Parliament and their staff.’

• ‘This Agreement exists to ensure that their work in Parliament is diverse and fulfilling and is to the mutual benefit of both the intern and the Member of Parliament.’

• ‘… it is important that [interns] have adiverse workload.’

Unite Agreement - Interns for MPs

And the opening paragraph of the agreement …

‘Interns work for Members of Parliament and their staff. They receive no payment … Interns have no formal contractual obligation with the Member of Parliament.’

My concern

• Graduate interns are not volunteers.

• They are workers and should either be paid minimum wage or the law should be altered to extend the HE exemption.

Why does it matter?

• If graduates are willingly taking unpaid internships, why does it matter? Where’s the victim?

• Many opportunities and even professions are effectively closed to those who are without private means.

• It is contrary to the ethos of government reports such as :

Unleashing Aspiration: The Final Report of the Panel on Fair Access to the Professions, July 2009Cabinet Office

Followed the White Paper New Opportunities : Fair Chances for the Future - January 2009.

• Low / no pay for internships discourages applicants from lower socio-economic groups.• Restricted access to jobs / professions for young people.• Restricted talent pool for employers.

Nine recommendations ostensibly aimed at ‘removing financial constraints’ but none involved NMW.

Low Pay Commission Report, March 2010Department of Business, Innovation and Skills

• NCWE believed there was confusion and inconsistency with guidance and advice given by different government departments.

• Labels such as ‘volunteer’, ‘intern’ or ‘work experience’

are sometimes applied to activities that are clearly work and for which NMW should be paid.

• Particular industries highlighted : performing arts, media, journalism, entertainment, politics - ‘employers have built unpaid work placements into their business model.’

CIPD Internship CharterVoluntary Code of Practice2010

Version of Charter on House of Commons website indicates that Internships on expenses only should be for no longer than four months.

Version on CIPD website just indicates that there should ‘as a bare minimum’ be payment of expenses and adherence to relevant legislation at all times.

Internocracy Guide

Refers to :

• Job description and person specification

• Providing intern with a good mix of work

• Managing the intern’s workload

• Routine tasks of a clearly ‘work’ nature

but

• Recommends the use of UNITE Interns Agreement and CIPD Internship Charter, both of which make assumptions of no pay.

Graduate Talent Pool website

The government encourages employers to pay a wage that reflects the value of the intern's contribution and the level of training and support offered by the employer.

Employers also urged to make sure that any internship they offer complies with the law on minimum wages.

… in some limited circumstances, employers may wish to offer unpaid internships.

It will then be for graduates to decide whether the benefits of taking up the internship outweigh the fact that it is unpaid.

Vetta v London Dreams Motion PicturesReading Employment Tribunal, 20th November 2009

Held : workers on expenses-only are entitled to NMW.

Nicola Vetta, an intern, was supported in her action by the Broadcasting union, BECTU.

The tribunal's decision confirmed that workers cannot be denied statutory rights to NMW even where they respond to ads which offer work on an expenses-only basis.

NB Not yet seen a full report, and have seen comment that this case had specific facts and cannot be taken as a blanket principle.

Dept. for Business, Innovation and SkillsJune 2010

National Minimum Wage – Low Pay Commission remit for 2011 report …

Review the labour market position of young people, including those in apprenticeships and internships.

Workplace Law, 6th July 2010 /NCWE website

If internships are not of benefit to both parties, they ought not to be offered or accepted. If the intern adds value, the company should pay at least the NMW.

Unpaid internships should be treated now as a breach of National Minimum Wage (NMW) legislation, as seen in the recent case against London Dreams Motion pictures.

Heather Collier, NCWE

Why Interns Need a Fair WageInstitute of Public Policy Research / InternocracyJuly 2010

Found four common features of internships which would indicate that many interns currently working in the UK should be defined as workers under NMW legislation.

a) Length - up to a year.

b)Time commitment - usually set hours.

c)Work expectations - specific tasks with set goals or deadlines, often with monitoring and evaluation.

d)Contribution - work which would otherwise be done by a paid member of staff.

David WilletsMinister for Universities and ScienceDepartment of Business, Innovation and Skills31st July 2010

‘We will be considering the IPPR report carefully over the coming weeks.’

At the invitation of the NCWE I submitted a note in September 2011 as part of the consultation process on the National Minimum Wage 2010 feeding in to the Low Pay Commission Report for 2011.

I am in discussions with Edward Timpson, Conservative MP for Crewe and Nantwich who has passed my comments on to Vince Cable and wants to meet again once I’ve prepared a more detailed paper.

In preparation :

• Professional note for industry publication • Academic paper on Agricultural Minimum Wage history and role, possibly for presentation at COBRA Conference 2011

So - current thinking is to push internships towards NMW

but

in some industries, both businesses and graduates are unwilling to take action and are happy, or willing, to maintain the status quo.

Note :

Some HEIs clearly understand the legal issues with unpaid graduate positions and have introduced such programmes as ‘graduate certificates of employability’ such that they fit their graduates within the s12 exemption, as undertaking work ‘as part of’ HE course.

Examples

• Student doing a compulsory sandwich year with substantial responsibilities under a formal contract of employment.

• s12 exemption - no NMW requirement.

• University student carrying out work shadowing. Not part of formal course requirements although relevant to course subject area and Course Handbook stresses the importance of gaining relevant work experience.

- during term time.- in the summer holidays

• No s12 exemption as work not a required part of course - but no work performed therefore not a ‘worker’ - no NMW requirement.

• On graduation, three months unpaid internship undertaken. The graduate is promised a permanent job if this period proves satisfactory.

• No s12 exemption as course finished - should be paid NMW throughout.

• Requirement to carry out internship ‘satisfactorily’ implies more than job shadowing with no obligation.

• Trainee home economics teacher does several months of unpaid teaching experience as part of her course. She also works in the evenings at a local restaurant to gain further food industry experience. This is unpaid but she is given dinner and they pay for a one day training session.

• Teaching - no NMW requirement per s.12. • Restaurant work not part of course, not

voluntary shadowing - work performed and b-i-k received, therefore NMW should be paid.

• Young man worked for an electrical firm on leaving school. He then signed up for a College course (governed by LSC) which set up an ILP (Independent Learning Plan) based at his work - a ‘modern apprenticeship’ tri-partite arrangement between student, employer and training provider.

• s12 exemption for apprentices.

• Agriculture graduate doing farm work on graduation.

• Agricultural Wages Board provisions - higher rates than NMW and detailed job grading system.

• Agricultural Wages Act 1948 / Agricultural Wages Order 2009 (revised annually)

• www.defra.gov.uk/foodfarm/farmmanage/working/agwages/awb/index.htm

Overseas Students

• Immigration Directorate Instructions ("IDI") and Rules

www.ukba.homeoffice.gov.uk/studyingintheuk/quickguideforstudent/adultstudents/applyingforanadultstudentvisa/

Students should work no more than 20 hrs / week in term time, except as part of sandwich course or internship. May work full time during vacations and during period following end of course whilst waiting for exam results, prior to attending graduation ceremony or before commencement of a new course. Student cannot fill a permanent full-time vacancy.

Overseas Students

• Note special provisions for doctors, dentists and certain schemes such as the Science and Engineering Graduates’ Scheme.

Judgments• British and Irish Legal Information Institute

www.bailii.org/

• Employment Appeals Tribunalwww.employmentappeals.gov.uk/Judgments/judgments.htm

• Online databases available through library : Lexis

• Employment TribunalThe Tribunals Service, Field Support Unit, Employment Tribunal, 100 Southgate Street, Bury St Edmunds, Suffolk, IP33 2AQ. Tel. 0845 795 9775 .

• National Minimum Wage Act 1998• National Minimum Wage Regulations 1999

• House of Commons Library SN/BT/697, 27.9.06

• www.direct.gov.uk/en/Employment/Employees/TheNationalMinimumWage/index.htm

• www.businesslink.gov.uk/bdotg/action/layer?topicId=1081657912

Equality Act overview

From 1st October 2010 :

• Replaces all previous anti-discrimination law

• Provides legal protection on the basis of ‘protected characteristics’

• Protects from unlawful discrimination, harassment and victimisation

• Allows for lawful positive action

• Protects against discrimination by association

‘protected characteristics’

• Age• Disability • Gender reassignment• Marriage and civil partnership• Pregnancy and maternity • Race• Religion or belief• Sex• Sexual orientation

What is unlawful?

• Direct discrimination / by association / by perception• Indirect discrimination• Discrimination arising from disability• Failure to make reasonable adjustment for disabled

people• Unwanted conduct (harassment) related to protected

characteristic (whether or not victim has characteristic)• Sexual harassment• Victimisation (following complaint of unlawful treatment)

The above all subject to an exception of ‘objective justification’.

Positive Action

• Positive action, i.e. to tackle disadvantage, different needs, low participation of particular group = lawful.

• Positive discrimination, i.e. discriminating in favour of a candidate solely because of their protected characteristic = unlawful.

Public sector equality duty

Public authorities must have ‘due regard’ to the need to :

• Eliminate discrimination, harassment, victimisation and any other prohibited conduct

• Advance equality of opportunities

• Foster good relationships

Placement Issues

Be alert to :

- Needing to stay local or work limited hours due to care commitments

- Being unable to take unpaid work

- Fear of disclosure - disability, sexual orientation, etc.

- Unrealistic expectations / lack of understanding - students and employers

- How to deal with being ‘odd one out’ in the workplace, e.g. disabled or ethnic minority

Current equality issue

• How far can we ‘control’ student job applications?

• Acceptable to bar job from a protected group where there is ‘objective justification’, e.g. there will be certain jobs someone with particular disability simply cannot do.

• Question of barring ‘weak’ or ‘difficult’ students from jobs, particularly overseas :– should, in theory, be acceptable to require good academic

record (although beware potential exposure to indirect discrimination)

Suggested approach

1. Be robust in indicating requirements, within the law.

2. Field as much as possible by student and employer liaison rather than overtly prohibiting students from applying for particular positions.

3. Academic criteria for overseas is probably the best route, rather than the exposure of a rather vague ‘placement manager’s discretion’ which invites charges of discrimination / justification of basis for decision.

• Last week I responded (late!) to consultation on Code of Practice for Higher and Further Education on the Equality Act, receiving this acknowledgement.

Friday 07 January 2011

Dear Carrie,

I was very happy to extend the deadline and we are very grateful that you have taken the time to respond to our consultation on the draft FHE Code of Practice.  I've passed your submission to my colleagues who are redrafting the code before it is laid before Parliament later this year.  If they have any queries they will be in touch.

Best wishes,

Finola KellySenior Consultation Officer - Codes and Guidance Project TeamEquality and Human Rights Commission

Resources

Equality and Human Rights Commission

www.equalityhumanrights.com

Government Equalities Office

www.equalities.gov.uk

Equality Challenge Unit

www.ecu.ac.uk

Higher Education Academy

www.heacademy.ac.uk

Resources : Reports / Documents

Various materials on ECU site, e.g. :

Trans staff and students in Higher Education

Pregnant students / taking maternity absence

Various materials on HEA site, e.g. :

www.heacademy.ac.uk/ourwork/teachingandlearning/inclusion/ethnicity

Faith guides as to how staff in HE can best support students

www.prs.heacademy.ac.uk/publications/faith_guides.html

• Employer Guide (700 + pages)

• HE / FE Guide (251 pages) - currently draft but fit for use

www.equalityhumanrights.com/advice-and-guidance/new-equality-act-guidance/equality-act-2010-guidance/

Placement and the UMF

• Save time and money in servicing placement.

whilst

• Enhancing the student / employer experience.

• Is the second aim simply PR ‘lip service’ against the inevitable needs of the first aim?

• An overall review of means of communication, administration systems and management should indicate : no we can do both.

Pilot Group

All staff offered the opportunity to take part in pilot from Summer 2010 - March 2011. Group comprises :

Charles Cowap Land Management

Carrie de Silva Land Management

John Donaldson Agriculture

Richard Langley Engineering

Tric Parrott Business / Agri-Food

Graham Scott Animals

Simon Thelwell Business / Agri-Food

Jim Waterson CELT

Consultation with Jo da Silva and Kathy Smith.

IT lead from Roger Greenhalgh and support from Henry Keil.

What are we doing?

• Pilot study of having one on-site visit per year to UK placements but more regular remote contact.

• Enhanced use of electronic communication, e.g. Skype, text tools, on-line diaries, blogs, forums, conference calls.

• Visiting tutor administration - automatic logging of emails and ‘phone calls - to avoid some of the labour intensive placement monitoring systems.

• Efficiency gains through the integration of the placement administration system with SITS to ensure accurate, up to date information and streamlined data entry.

Feedback to date

• One visit : largely uneventful feedback. Clearly two visits are valued many staff, employers and students, but most are broadly unconcerned, given the ease of contact by ‘phone and email and the assurance of increased contact throughout the year - a feature which the enhanced monitoring systems will support.

• Skype / video conferencing : not without teething problems - probably to be used with overseas students and offered as an option for UK students thus offering good PR without undue burden.