New legislation always throws up some unexpected consequences and the former Employment Equality (Age) Regulations 2006, now contained within the Equality Act 2010, are no different. Unlawful age discrimination can occur in a number of ways and is as likely to affect young workers as older workers.
One interesting phenomenon which may be more a consequence of the economic climate over the last decade, but which may also be indirectly related to the age legislation, is the recent increase in middle aged or older individuals entering the workplace as interns.
The last decade has seen significant displacement of workers in traditionally “safe” jobs and gaining work experience has long been seen as one route into a new career. It is interesting, then, that many organisations are now offering internships to older workers. Corporations such as US banks, Goldman Sachs and MetLife, together with UK accountancy giant PricewaterhouseCoopers, now have internship programmes for older workers. UK bank Barclays is another such corporation, which in 2015 announced its "Bolder Apprenticeships" programme, being a paid 12-month scheme for prospective employees aged up to 65.
The trend has even been reflected in recent films such as The Internship where Owen Wilson and Vince Vaughn undertake a career change and apply for an internship at Google and, more recently, The Intern, starring Robert de Niro.
What, in legal terms, is an intern?
With the usual caveats of an (I hope) well-trained lawyer, namely that each situation will depend on the specific facts and circumstances of the situation, interns are not employees. For those with some knowledge of employment law, nor does an intern fall within the lesser status of a "worker" for legal purposes. In basic terms, interns are akin to volunteers. They are very unlikely to be classed as employees or workers for the simple reason that they will not be paid for the work they do. In employment law terms, there requires to be a mutuality of obligation, that is to say an obligation on the individual to do the work and an obligation on the organisation to give them work and pay them for doing it. Employers should be wary where an individual is brought in as an intern to replace the role of a previous employee. This factor, considered together with the employer–intern relationship as a whole, could support an argument that the individual is in fact an employee or a worker.
Where things can get a little bit trickier, from the organisation's side, is where the organisation's internship programme pays a nominal amount to the intern to cover their expenses. If, in fact, the intern does not incur expenses and the allowance (for want of a better word) constitutes some kind of financial benefit to the intern, the organisation could be said to have, albeit inadvertently, created an employment relationship between itself and the intern. In one litigated case, a volunteer who worked four mornings a week was paid "expenses" of £40 per week even though no such expenses were incurred. In addition, these "expenses" were paid even when the individual was on holiday or off sick. In those circumstances, it was held that the £40 per week constituted a payment for work which, in turn, created an employment relationship between the parties.
As you can imagine, where an employment relationship is created, a whole raft of potential claims become available to the individual. Firstly, they are entitled to be paid the National Minimum Wage or, in an older worker’s case, the National Living Wage. HMRC have engaged in efforts to investigate employers not paying interns the National Minimum Wage. As well as investigating potential breaches of the National Minimum Wage legislation, HMRC view these situations as a potential loss of tax and National Insurance revenue. The organisation is also obliged to fulfil its obligations under the Working Time Regulations 1998, namely in respect of rest breaks, holiday pay and the like. Furthermore, the employment relationship can give rise to claims of unfair dismissal and unlawful discrimination, not available to an intern or volunteer.
The point of highlighting these potential pitfalls is not, in any way, intended to put organisations off bringing interns (old or young), volunteers or work experience students into their organisation. Rather, it is simply important for the organisation to be aware of the legal implications of doing so and to ensure that it is not doing anything inadvertently to create an unintended employment relationship.
So what are the other legal implications for taking on an intern or volunteer?
Firstly, the organisation will need to remember its obligations under the Data Protection Act 1998. The Act restricts a data controller from processing personal data relating to data subjects. As with any other individual within the organisation, interns and volunteers will qualify as data subjects if, as is likely, they have had to provide their personal details as part of the "recruitment" process.
Secondly, the normal rules relating to the creation of Intellectual Property apply and therefore the organisation will need to ensure that the intern or volunteer, should they be creating anything which could constitute Intellectual Property, assigns the rights of the creation to the organisation.
Another couple of important points are health and safety, on the one hand, and insurance on the other. Under the Health and Safety At Work Act 1974 employers have an obligation to "ensure, as far as reasonably practicable, that persons not in their employment who may be affected by their undertaking are not exposed to risks to their health and safety". Interns and volunteers should not therefore be forgotten in respect of health and safety issues. Similarly, although organisations will generally have public liability insurance and employers' liability insurance, they should ensure that they have sufficient insurance cover to include interns and volunteers.
Under the Employment Rights Act 1996, it is mandatory for employers to provide employees with a statement of their main terms and conditions within one month of employment. No such legal obligation applies to interns or volunteers. However, for the reasons outlined above, I would always recommend having something in writing in respect of any interns or volunteers, in order to ensure that both sides are clear about the basis on which the individual is within the organisation. That makes legal sense but it also makes practical sense, particularly to ensure that it is clear to the intern the basis on which they have been brought into the organisation.
So, what of the silver-haired intern?
Internships can be a great way to gain experience in a new field. Changing careers is never easy and an internship is unlikely to be the panacea it might be seen as. There remains concern that interns can be exploited by large corporations, being required to work long hours on no pay while, at the same time, potentially reducing the opportunities for others to paid employment.
Where internships probably work best is where they are undertaken in conjunction with completion of an academic qualification in a field where there is an existing skills shortage. That takes a lot of commitment, particularly for older workers when family commitments are likely to be at their highest. However, the introduction of programmes such as Barclays' "Bolder Apprenticeships" has to be a good thing for those who might otherwise, rightly or wrongly, consider themselves to be on the career scrapheap.
The small print: This blog is for information purposes only and should not be construed in any way as providing legal advice.
Get in touch
If you have interns or volunteers that work for your organisation and wish to discuss their role and status please get in touch.