4th April 2014

The Intern Debate

“We don’t wake up for less than $10,000 a day”
Linda Evangelista

Unfortunately, not everyone in the fashion industry can demand the same wage as supermodels. In fact, many people work as unpaid interns in the hope of gaining valuable experience and perhaps a job at some point in the future. An important question employers should consider is whether they should be paying interns in exchange for their blood, sweat and tears.

My colleague Sarah Winter wrote an article last year about voluntary workers and whether they shared the same rights as employees under discrimination law. Sarah commented on a decision by the Supreme Court where it was decided that a volunteer with Mid-Sussex Citizens Advice Bureau was not an employee and was not protected by discrimination legislation.  Sarah concluded that it is now clear for charities that volunteers are excluded from discrimination protection, but noted that it is often unclear whether a volunteer has employment status or volunteer status. This can only be determined by the facts in each individual case.

This position is the same when it comes to the question of whether or not an intern is entitled to be paid. This can only be determined by looking at the role, duties and obligations of each individual rather than the job title.

It is interesting to note that a woman is currently suing a top fashion house for payment of wages for four months’ of unpaid work. The woman worked for Alexander McQueen fashion house as an intern between 2009 and 2010 and claims that she should have been paid the national minimum wage. Her lawyer claims that when interns do “real work under a contract” they are entitled to be paid at least the national minimum wage. The internship included drawing artwork for embroidery and dyeing large quantities of fabric for no pay.

The National Minimum Wage Act 1998 section.1 outlines that a worker shall be paid by his/her employer in respect of any work at a rate which is not less than the national minimum wage. Section.54 defines a worker as an individual who has entered into, or works under, a contract of employment or any other contract whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual. Whether an intern would fall into this category would depend on the type of duties and obligations which the intern undertakes.

Employment law expert Timothy Brennan QC has said that “If someone is engaged on a regular basis for an extended period of time to sew sequins on to ball gowns or similar work, which is a core part of a clothing manufacturer’s operation, then that person may well be considered an employee or worker and would be entitled to the minimum wage.

In 2009, an employment tribunal decided that an art department assistant who had been taken on by London Dream Motion Pictures on an ‘expenses-only’ basis was to receive backdated minimum wage payments. The tribunal’s decision confirms that in certain circumstances workers cannot be denied their statutory rights to payment even where they agree to work on an expenses-only basis. The employment tribunal held that the intern was a worker as it was clear that “she carried out all of the tasks that one would have expected of an assistant in that position”.

In determining whether an individual has ‘worker’ status, a tribunal would consider:

  • Whether there is an obligation on the individual to perform the work personally
  • Whether there is an obligation for the company to provide the individual with work, and
  • Whether the individual is to be rewarded for work undertaken.

In a more recent case Keri Hudson v TPG Web Publishing Limited, Ms Hudson was hired as an unpaid intern for TPG Publishing Limited. During her internship, Ms Hudson worked between 10 am and 6 pm and was responsible for a team of writers and hiring new interns. She had discussions with the company that she would be paid. The employment tribunal held that these discussions, taken together with the extent of the work Ms Hudson was undertaking, was sufficient to show that Ms Hudson was a “worker”.

Employers should carefully consider the role and obligations that an intern will have within the business. If an intern is obligated to do work which is of value to the employer then they may have a valid claim for National Minimum Wage. Remember that an employer who breaches the National Minimum Wage Regulations can be subjected to a penalty of up to £20,000!

Cheryl Hogg 
Trainee Solicitor – Employment Law

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