Internships – a source of free labour or a

labyrinth of confusion?

Alex Kleanthous

Matt Gingell

What interests you?

• Internships on the agenda – 1 in 3 unpaid

• Politics – campaign for fair pay

• Benefits of internships - varied

FAQs we cover

• What is an intern and the employment rights

• Can interns be unpaid?

• Other legal and practical issues

• Immigration considerations

What is an intern - label

• No legal definition – life gets complicated

• Usually short term

• Shadowing and completing tasks

Why do you care?

Employment rights will depend on status

• Employees: unfair dismissal plus the rest

• Workers: the rest - NMW, holiday, whistleblowing, part

time workers protection and discrimination

Employees

• Require:

- a contract of service

- personal service – no right of substitution

- mutuality of obligation (work in return for a

wage)

- employer in control

Workers

• Require:

- a contract of service

- personal service

- less control – can turn down work

- not consultant or self-employed or sent to work

for clients

Is there a contract?

A contract requires:

• Offer

• Acceptance

• Consideration

• Intention to create legal relations

• Certainty

No contract = mess

National Minimum Wage

• Anyone who “works” is entitled

• £6.19 for those over 21 – rates vary

• 6 years backdated claims

• Criminal penalties if wilfully neglected to pay NMW

But does it really happen? • Central London Employment Tribunal, 12 May 2011

• Keri Hudson v TPG Web Publishing

• £1,025 for 5 weeks work

• Supported by NUJ

• Reading Employment Tribunal, 20 November 2009

• Vetta v London Dreams Motion Pictures

• £2,400 including accrued holiday pay

• Supported by BECTU

• Other reports

• NOW magazine - £750 for one month (Justice for Interns

campaign)

• Arcadia – “dozens” of interns received pay for up to a year after

HMRC enforcement

• Vast majority are quietly settled

Practical guidance

• Less control over what is done when – encourage

shadowing

• Be clear what payments are being made – clear

reimbursement of expenses

• Avoid language of contractual obligations (“might”,

“could include”, “possible”, “approximate”)

• Be fair and reasonable

• But the label does not matter – the facts of the

arrangement do

Documenting the arrangement

• Placement dates

• Suggested hours

• Location

• Supervisor’s name

• Specific learning

objectives

• Work related expenses

• Health and safety

• Insurance

• Intellectual property

• Confidentiality

CIPD Internship Charter

• Recruitment

• Induction

• Supervision

• Treatment

• Payment and duration

• Certification/reference and feedback

CIPD Guide for Employers

Internships that Work

http://tinyurl.com/cipdinterns

Immigration issues

• International dimension and access to talent

• Disconnect between employment law and

immigration law

Right to work in the UK

• Employing non-EEA (European Economic Area)

nationals

- Need express right to work

• Nationals of EEA countries

Tier 4 – Student visas

• Degree level or above/Recognised Body or Higher

Education Institution (HEI)

- Term-time – 20 hrs max

- Vacation – Full time

• Below degree level

- Term-time - 10 hrs max

- Vacation – Full time

Tier 5 – Government Authorised Exchange

• Approved schemes

• Overarching bodies – sponsors

• Lack of candidates in financial sector

BUNAC

• Overarching sponsor/any industry

- Aged 18 and over

- Current full-time degree level student (or

graduate in last 12 months)

- Good English skills

- Internship max 6 months/structured programme

Other solutions

• Tier 5 (Youth Mobility Scheme)

- 18 to 30 years olds

- Participating countries

- Max 2 years

- National government acts as sponsor

Other solutions

• Tier 2 (Intra-Company Transfer) (ICT) Skills Transfer

- Licensed sponsor

- Bypass Tier 5

- Acquire/impart skills

- Minimum salary £24,000 per annum

Other solutions

• Tier 1 (Graduate Entrepreneur)

- Graduates with endorsement from approved HEI

- Up to 2 years

- Max 20 hrs per week

Illegal working

• Civil offence

- Maximum fine £10,000

• Criminal offence

- Punishable up to 2 years in prison

• Entry bans

• Reputational damage

Conclusions

• Consider what you need interns to do

• Which category do they fall into?

• Consider whether NMW applies

• Draft an appropriate contract

• Consider immigration issues and risk of

discrimination claims

Future fixtures

• New Year 2013

Social media and restrictive covenants

- How will you protect the Company’s IP?

• Spring 2013

Consultants

- Could you get clobbered?

ANY QUESTIONS?

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