This may include volunteers, fixed-term employees or summer interns. A key issue is the use of unpaid interns and the misconceptions when identifying their legal status and associated employment rights.
Employment status
Determining employment status is complex yet essential. Individuals may be categorised as an employee, worker or volunteer, each carrying different rights and obligations.
The American term "intern" has no formal legal definition in the UK, and labels used in job adverts are not determinative. Tribunals will instead consider the reality of the arrangement and the tasks being performed.
A genuine volunteer is not subject to a legally enforceable obligation to attend or complete work. They are not paid like employees or workers but may receive genuine out-of-pocket expenses. Organisations should ensure such payments do not amount to a reward or benefit in kind, as this could undermine volunteer status. Any payment must not go beyond the reimbursement of actual expenses.
Internships should also be distinguished from work shadowing, commonly referred to as 'work experience', where the individual observes the workplace rather than contributing commercially to the organisation.
Where an intern is expected to turn up on set days, follow instructions, carry out work and meet deadlines and standards, they are likely to be classified, at least, as a worker. Employee status is also a possibility and becomes more likely where the intern is integrated into the organisation in the same way as other staff and is subject to a higher degree of control, particularly where there is mutuality of obligations (i.e. an expectation that work will be offered and accepted on an ongoing basis). The length of an internship may also be relevant; the longer the arrangement, the harder it becomes for an organisation to argue that the arrangement is purely observational and informal.
Why getting status right is important
Employment status determines an intern's entitlements and obligations. The primary concern for organisations is whether they must pay their intern. If an intern has at least worker status, they are entitled to receive the National Minimum Wage or National Living Wage. This applies regardless of the internship's duration, experience gained, the intern's student or graduate status, or any prior agreement to unpaid work.
Workers are also entitled to take and be paid for annual leave. In addition, they are entitled to rest breaks, working time limits, protection from unlawful wage deductions, whistleblowing protection, the right to join a trade union and protection from discrimination and harassment under the Equality Act 2010. Employee status brings further additional rights, including statutory sick pay, family-related rights, notice rights, redundancy pay and rights, and, where certain conditions are met, protection from unfair dismissal.
Rights and obligations unrelated to status
Some rights and obligations apply irrespective of status. From a health and safety perspective, organisations have a responsibility to protect not only their employees but anyone who may be affected by their activities. Interns, therefore, should receive appropriate induction, training, supervision and equipment, regardless of their status. Even if it is an unpaid internship, organisations should ensure suitable liability insurance cover is in place.
Employers should also ensure that data protection obligations are considered and appropriate steps are taken to protect intellectual property. All interns will be considered a 'data subject' under the UK GDPR and the Data Protection Act 2018, as the organisation will process their personal data. If the intern will be handling the personal data of other individuals as part of their role, organisations should consider taking appropriate steps and safeguards, such as providing training.
Interns may bring fresh, original ideas into organisations. They may create, for example, content such as designs, reports, software, databases or other products valuable to the workplace. Ownership of such work will not automatically transfer to the organisation if created by someone who is not an employee. Where relevant, organisations should ensure that appropriate steps are taken to ensure that any IP is assigned to the employer.
What should employers be doing?
There are only limited circumstances in which an individual can lawfully undertake work without entitlement to the National Minimum Wage. These may include genuine work shadowing, specific work experience arrangements for school students and bona fide volunteering in certain settings, such as volunteering for charities or statutory bodies. Certain specific higher education placements forming part of a degree or qualification may also fall outside minimum wage requirements.
Whatever the arrangement, it is essential that employers approach recruitment carefully, as poorly structured arrangements create a significant legal risk. Where an intern undertakes regular, meaningful work, they are likely to qualify as a "worker" and, therefore, should be paid. It is essential for organisations to assess the true nature of the arrangement before the internship begins so as to minimise legal, ethical and reputational risks, alongside potentially damaging media scrutiny.
