Australia Challenges Use of Unpaid Internships
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Version 0 of 1. SYDNEY, Australia — Stuart Cottle’s first unpaid internship here landed him on the “Great Gatsby” movie set. From there he headed to New York, where he worked on high-end fashion set designs. Both seem like cushy gigs, but each came with a catch: One was unpaid; the other didn’t pay the rent. Although the positions eventually secured Mr. Cottle the offer of a much sought-after job, they drained his bank account. Mr. Cottle, 28, used his savings to live in New York. But Australia, much like the United States, is about to test just how much employers can ask young workers to do without paying them before facing fines for breaching Australia’s labor laws. One of the most prominent cases in Australia involves the sports broadcaster Crocmedia, which is in Federal Circuit Court over the issue. Gemma Smith, at age 20, produced radio programs there, starting her shifts at midnight or later and finishing just before dawn. In the six months she worked there, starting in August 2012, she worked as many as seven days out of 10. She was paid nothing. Jonathan Wilkinson, starting at age 23, worked about the same hours in his 15 months with Crocmedia. He was paid 2,940 Australian dollars, or about $2,500 at current exchange rates, but should have made almost seven times that amount, the lawsuit says. Court documents show both should have been paid about 18 Australian dollars an hour under minimum wage laws as casual workers. Crocmedia, which is based in Melbourne, has since paid them but may face fines for breaches of workplace laws when Judge Grant Riethmuller hands down his decision on the lawsuit, filed in June 2013. Mr. Wilkinson was not immediately available for comment; Ms. Smith declined to comment. “The significant alleged underpayment of vulnerable, young workers and the need to deter employers from such behavior were key factors in the decision to commence legal action,” said Steve Ronson, executive director of the Fair Work Ombudsman, an Australian agency that oversees workplace issues. Crocmedia’s marketing and communications manager, Leah Grant, said the company could not discuss the case until the judge handed down his decision. A ruling in favor of the interns could open the possibility of legal action for pay and benefits for any underpaid intern in the past six years, under Australia’s Fair Work Act, said Josh Bornstein, an employment lawyer and a principal at Maurice Blackburn Lawyers. Rosemary Owens, a University of Adelaide law school professor, said the practice of using young people and not paying them was common in many industries. “It entrenches disadvantage, because only someone who is well off can afford to work for nothing,” she added. The first push against unpaid internships started in Europe, a trend that soon spread. In the United States, news media organizations including Hearst Magazines, Fox Searchlight Pictures, Gawker, Condé Nast and Warner Music are facing lawsuits over unpaid internships. Olivia Rothnie-Jones, who worked three unpaid internships in China and Australia that soaked up hundreds of hours — one while she was juggling university studies and a part-time job waiting tables — said she saw the risks in agreeing to work without pay. “I understand the imbalance,” Ms. Rothnie-Jones said. “I would hate to see Australia go down the path of unpaid work becoming the norm.” One factor behind the use of unpaid workers is high youth unemployment: Young Australians are more than twice as likely to be unemployed as older workers. That means they are more likely to take low-paying or unpaid jobs in hopes of parlaying it into better work, experts say. Australia’s case follows a June 2013 decision in which a Federal District Court judge in Manhattan ruled that Fox Searchlight should have paid two production interns who worked on the movie “Black Swan.” The magazine publisher Condé Nast recently settled a suit brought by former interns who said they had been paid less than minimum wage. The United States Labor Department uses a six-point test to determine when interns should be paid. It includes whether the internship focuses on training and whether the intern does the work of a regular employee. In Europe, where more than one in five young people in the labor market cannot find a job, governments have passed legislation on internships. In France, for instance, where youth unemployment hit 23.2 percent after the 2008 financial crisis, employers must offer interns payment after two months. In Australia, short, fully supervised unpaid work trials to test a job applicant’s skill are legal, as are college-backed, short-term student placements that allow students to accrue course credits for a term of work. Even unpaid internships are legal. A benefit test — showing whether the intern or the employer gains the most from the work completed — is one factor that determines whether a worker should be paid. “If a business or organization benefits from engaging the person, it is more likely the person is an employee” and should be paid, according to the Fair Work Ombudsman’s office. Joellen Riley, the dean of the University of Sydney law school, said relying on unpaid workers “is a creeping problem. It is gaining bigger and bigger purchase. And as soon as you go down that path of not paying, when do you ever pay? You end up creating real labor market problems.” Michael Rice, who employs 60 people at Rice Warner, his financial services consulting firm in Sydney, said that he used interns as a cheap recruiting tool. “But we pay our undergraduates 25 dollars an hour, and they do one day or maybe one and a half days a week,” he said. “At the end of a year, we know whether we might want to hire them and they know if they want to work for us. There’s good will on both sides.” |