Inspired by Is it legal to work without pay - Canada?; I figured I would ask the same question for a different jurisdiction.
In what circumstances is it legal to work without pay in Australia?
There are circumstances in Australia where it is legal to work unpaid.
A work trial is okay when:
it involves no more than a demonstration of the person’s skills, where they are directly relevant to a vacant position
it's only for as long as needed to demonstrate the skills required for the job. This will be dependent on the nature and complexity of the work, but could range from an hour to one shift
the person is under direct supervision for the entire trial.
Any period beyond what is reasonably required to demonstrate the skills required for the job must be paid at the appropriate minimum rate of pay. If an employer wants to further assess a candidate's suitability, they could employ the person as a casual employee and/or for a probationary period and pay them accordingly for all hours worked.
Under the FW Act, a vocational placement is lawfully unpaid if it meets all the following criteria:
There must be a placement
There must be no entitlement to pay for the work the student undertakes
The placement must be done as a requirement of an education or training course
The placement must be one that is approved by the training institution
When all of the above criteria are satisfied, hosts are not required to pay students entitlements under the FW Act. However, a host can choose to pay the student at their own discretion if they wish.
If the placement doesn't meet all of the above criteria, it won’t be a vocational placement under the FW Act.
However, this doesn't automatically mean that the person is an employee and entitled to payment. The relationship may be a ...
A work experience placement is an unpaid internship only if it meets a number of criteria; if it doesn't it is an employment relationship and the worker is required to be paid.
The criteria are:
the person must not be doing “productive” work
the main benefit of the arrangement should be to the person doing the placement, and
- it must be clear that the person is receiving a meaningful learning experience, training or skill development.
Key characteristics of a genuine volunteering arrangement include:
- the parties did not intend to create a legally binding employment relationship
- the volunteer is under no obligation to attend the workplace or perform work
- the volunteer doesn't expect to be paid for their work.
The more formalised that volunteer work arrangements become (for instance if the volunteer is expected to work according to a regular roster) the greater the possibility that an employment relationship will be found. It is less likely that an employment relationship will be found to exist where the volunteer work is undertaken for selfless purposes or for furthering a particular belief in the not-for-profit sector.
Large not-for-profits (e.g. Red Cross) consist of a mix of paid employees and volunteers; smaller not-for-profits (e.g. a local rugby league club) may consist entirely of volunteers. In this context it is important to note that if there is an expectation of payment (other then reimbursement of expenses) like a stipend for officials then the arrangement is an employment arrangement and all relevant employment law (e.g. minimum wage, workers compensation etc.) kicks in. As an aside a not-for-profit that has even a single employee loses its exemption under Work Health and Safety laws for all their workers; both employees and volunteers.