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CANADIAN HR LAW
Apr 7, 2014

Calling a worker an 'intern' is not a magic bullet

Unpaid internships should only be used in educational contexts, such as co-op programs
    

By Stuart Rudner

The subject of unpaid issues seems to be one that will not go away.

Several months ago, the issue was in the news along with criticisms of employers that take advantage of the concept of an unpaid intern to, effectively, obtain free labour. I was quoted in the media on the issue and, coincidentally, I then received an email message from a young lady interested in a legal career, offering to work at my firm as an unpaid intern.

It was clear from the content of the email message that while she was hoping to learn more about the legal profession, the offer was to provide office services that would otherwise be paid. Mindful of the potential headlines if our employment law firm was found to be breaching the Employment Standards Act, we declined the offer. We received several more over the following months, and the issue of unpaid interns is now back in the headlines after reports that the Ministry of Labour has been cracking down on the practice and a number of high-profile publishing internship programs have been shut down.

Employers need to understand that applying the term "intern" or "unpaid intern" is not a magic bullet that allows you to avoid all of the requirements of employment standards legislation. While the concept of an unpaid intern is legitimate, it is only to be used in truly educational contexts, such as co-op programs where the student spends part of the year in class and part of the year in the workplace in order to gain practical experience.

In Ontario, the Employment Standards Act specifically includes “a person who receives training” in the definition of an “employee.”

A true intern arrangement is based on the following concepts:

1.  The training must be similar to that which is given in a vocational school.

2. The training must be for the benefit of the individual.

3. The person providing the training should derive little, if any, benefit from the activity of the individual while he or she is being trained.

4. The individual should not displace employees of the person providing the training.

5.  The individual should not be accorded a right to become an employee of the person.

It is always advisable to hire trainees through educational institutions, if possible, to provide further evidence that the “hiring” is for the individual's education and training, and not to obtain free labour.

I should add that even if the intern agrees to work without pay, it does not mean the organization is protected from future penalties and liability whether legislative or under common law. Parties cannot agree to contract out of legislated rights such as those pursuant to employment standards legislation.

The bottom line for employers is that there are no easy way to avoid employment standards laws and obtain free labour. Much like our courts and government bodies will closely scrutinize any purported contractor relationship, they will also examine the basis for deeming a worker to be an unpaid intern.

Employers expose themselves to substantial liability and embarrassment if they "employ" an unpaid intern when there is no legitimate basis for calling them such. While many older works scoff at this notion and reminisce about how they “paid their dues” working for free to get their foot in the door, that is not how our current laws work. Even when individuals seeking to get "a foot in the door" genuinely agree to work on an unpaid basis, that is not a factor in the assessment of whether or not they are entitled to the protections of the Employment Standards Act, including the right to be paid for their labours.

Making such an offer to an employer can get the employer into trouble if they accept.

    
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