Late last year, the Employment Court delivered a decision which all employers who take
staff on for unpaid work trials or unpaid/poorly paid internships need to note.
In Salad Bowl Limited v Howe-Thornley  NZEmpC 152 Ms Howe-Thornley applied for a job working in a mobile salad cart. At her interview she was told there was no reason why she wouldn’t be hired if she satisfactorily completed a three hour work trial. The employer also intended to pay her for the time she had worked on trial. She worked her three hours satisfactorily but the employer later came across a discrepancy in the till takings, suspected Ms Howe-Thornley was responsible, and sent her a text telling her not to come back. She brought a personal grievance.
An employee is defined in the Employment Relations Act as anyone doing work for hire or reward under a contract of service. The Court held that Ms Howe-Thornley had been performing “work” in that she was doing tasks of economic benefit for the company, and that this work came with an expectation of some reward. Therefore she was an employee and was entitled to bring a personal grievance.
The Court noted that the employer could have placed the employee on a 90 day trial period in a formal employment agreement but it had elected not to do so.
While the decision is particular to its facts, the Court sent a clear message in its judgement that it is aware that there are several industries where unpaid work or internships are prevalent. It noted where “work” is performed which provides a benefit to the employer, there is likely to also be a payment obligation (usually at least to the level specified in the Minimum Wage Act).
The bottom line here is that if an employer wants to provide work experience to somebody or genuinely wants to assess suitability for work, and in doing so, has that person performing tasks that provide a benefit to the employer, that person should probably be paid. The exception might be very brief engagements (for example asking a prospective barista to make a coffee) or a genuine volunteer with no expectation of any reward.