Unpaid workers and the fair work ombudsman

Many businesses and organisations have people involved who are not paid.

These “unpaid workers” could be engaged in:

  • work experience
  • volunteering
  • vocational placements
  • internships
  • trial employment

Until recently the issues associated with unpaid workers have largely gone under the radar with regulators, such as the Fair Work Ombudsman (FWO). However, things are starting to change following the release in 2013 of a report commissioned by FWO into unpaid work. One of the many recommendations in the report was that the FWO should consider instigating test cases against employers with unpaid workers in order to obtain greater legal clarity around unpaid work. While the first of these types of cases are now underway, the FWO is still seeking more and it is important that business and organisations with unpaid workers remain aware of this.

As a result it is important for all businesses and organisations with unpaid workers to review their operations in order to assess whether the arrangements that they have in place for their unpaid workers are not likely to expose them to actions by the FWO, or by the unpaid workers themselves.

For some organisations this can actually be quite a difficult process. For example, many not-for-profit organisations have a mix of many paid and unpaid workers, particularly volunteer workers, and the line between who is a genuine unpaid worker and who is a paid employee can become quite difficult to determine. As a result, it is important to be aware of some of the key issues and indicators associated with determining whether a worker is a genuine unpaid worker or whether they should be regarded as a paid employee. Failure to get this right could result in a business or organisation facing substantial back pay claims, as well as significant penalties also being imposed.

What should you do?

If your business or organisation utilises any type of unpaid workers, we suggest your business or organisation review its arrangements and implement measures that comply with the guidelines the FWO uses in assessing whether a worker is a genuine unpaid worker or whether they should be a paid employee. Our Employment, Industrial Relations and Safety team has experience acting for businesses and organisations with unpaid workers and dealing with the FWO. As a result, we are well placed to assist your business or organisation in implementing appropriate arrangements to effectively manage unpaid workers and reduce the possibility of becoming an FWO test case or facing hefty back pay claims.

Announcement

We would like to announce the addition of William Ward to our Employment, Industrial Relations and Safety team. Will is an Accredited Specialist in Employment and Industrial Relations Law. Will joins us having been practicing in Employment and Industrial Relations law at Toomey Pegg in Sydney for the last 12 years and for 5 years prior to that he was a university lecturer in Employment and Industrial Relations. As a result he brings a considerable amount of experience in this area to our firm and our clients.

For more information contact the Employment, Industrial Relations and Safety Team:

William Ward — Special Counsel — Employment, Industrial Relations and Safety Team
(02) 6279 4366
william.ward@meyervandenberg.com.au

Hugh Chalmers — Special Counsel — Employment, Industrial Relations and Safety Team
(02) 6279 4451
hugh.chalmers@meyervandenberg.com.au