In what is being called a landmark decision, the Federal Circuit Court in Melbourne has fined Crocmedia Pty Ltd for underpaying two interns employed in the company for 20 months.
The two employees, a journalism student and a journalism graduate at the time, were found to have provided Crocmedia with 6 months and 12 months work, respectively, after completing short periods of unpaid work.
Crocmedia, a media company that produces television and radio content, was penalised $24,000 for implementing an unpaid work arrangement.
“I am not persuaded that (Crocmedia) engaged in a deliberate strategy to exploit the employees, although it is clear that (Crocmedia) was content to receive the benefits that flowed from the arrangement, and that the arrangement itself, when viewed objectively, was exploitative,” Judge Riethmuller said in his judgment.
“There is little doubt that this case, and cases like it, will attract considerable media attention, which will have a positive effect in informing and educating employers generally.”
The interns were underpaid a total of $22,168 for work that involved multiple shifts each week, ranging from midnight to 6am. One intern was found to be entitled to $5,767 for work performed August 2012 – February 2013 and other was entitled to $16,401 for work performed June 2011 – August 2012.
Crocmedia is the first company to be penalised after Fair Work Ombudsman legal action since the Agency released a report looking into the issue in 2013.
“When a worker moves beyond merely learning and observing and starts assisting with business outputs and productivity, workplace laws dictate that the worker must be paid minimum employee entitlements,” Fair Work Ombudsman Natalie James said.
“We don’t want to stifle genuine learning opportunities that help young people get a foot in the door but we also don’t want to see young people being treated unfairly through unpaid work schemes.”
Interns and students support and advocacy body Interns Australia welcomed the decision, calling it a major step forward in cementing the rights of vulnerable job seekers.
“This decision is crucial in highlighting the responsibilities of employers to comply with minimum wage laws and to ensure they play their role in protecting the notion of a fair day’s work for a fair day’s pay,” Colleen Chen, Interns Australia co‐founder, said.
“While internships can provide valuable hands on experience for students and job seekers, the lack of provision in employment laws for interns and very high youth unemployment means that we are seeing more and more cases of interns working for free in positions when they should be paid a wage.”
