Kylie Minogue’s dancers and the problems of unpaid work

Analysis

Kylie Minogue’s dancers and the problems of unpaid work

Recent media reports surrounding allegations by backing performers to Kylie Minogue of non-payment or underpayment of wages highlights some of problems that can arise when work or activities are performed for a business, but no payment is made.

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Recent media reports surrounding allegations by backing performers to Kylie Minogue of non-payment or underpayment of wages highlights some of problems that can arise when work or activities are performed for a business, but no payment is made.
 
This can be problematic for a business where the person has approached the company requesting unpaid work. Unpaid work would also describe arrangements such as internships, vocational placements, volunteer work, and work experience.
 
A common issue that can arise in these arrangements is whether or not an employment relationship has actually been created.
 
An employer offering a person the opportunity of unpaid work experience should be viewed as a philanthropic exercise on the part of the business and not an arrangement that is to the advantage of the business.
 
Work experience
 
Unpaid work experience placements that don't meet the definition of vocational placement can be lawful in some instances. To be lawful, businesses need to ensure that the work experience participant is not an employee.
 
One key issue in determining whether an employment contract has been formed is whether the parties intended to create a legally binding employment relationship.
 
The Fair Work Ombudsman advises that when assessing whether the parties intended to form a legally binding employment relationship, some key factors include:
    • Purpose of the arrangement — was it to provide work experience to the person or was it to get the person to do work to assist with the business outputs and productivity?
    • Length of time — generally, the longer the period of the placement, the more likely the person is an employee.
    • The person’s obligations in the workplace — although the person may do some productive activities during a placement, they are less likely to be considered an employee if there is no expectation or requirement of productivity in the workplace.
    • Who benefits from the arrangement? The main benefit of a genuine work placement or internship should flow to the person doing the placement. If a business is gaining a significant benefit as a result of engaging the person, this may indicate an employment relationship has been formed. Unpaid work experience programs are less likely to involve employment if they are primarily observational.
    • Was the placement entered into through a university or vocational training organisation? If so, then it is unlikely an employment relationship exists.
Breach of Fair Work Act
 
It's important for a business to ensure that any unpaid work arrangement is not that of an employment relationship. An unpaid work arrangement subsequently deemed to be an employer/employee relationship would breach the FWAct and could result in a maximum penalty of $10,200 for an individual and $51,000 for a company.
 
Modern award
 
The wages and conditions of employment for employees in the live performance industry are regulated by The Live Performance Award 2010. The award provides for the payment of amounts relating to auditions (in certain circumstances), rehearsals and performances, as well as certain monetary allowances .
 
Vocational placements — FWAct
 
The FWAct recognises formal work experience arrangements that are a mandatory part of an education or training course. These arrangements are referred to as vocational placements, and are defined as being:
  • Undertaken as a requirement of an Australian-based education or training course;
  • Authorised under a law or an administrative arrangement of the Commonwealth, a State or a Territory; and
  • Undertaken with an employer for which a person is not entitled to be paid any remuneration.
If all of these criteria are met, the person will not be covered by the FWAct and is therefore not entitled to the minimum wage and other entitlements provided in the NES and modern awards.
 
Other employment laws
 
It is important to note that exclusion from coverage under the FWAct does not limit any obligations that may arise under other legislation, including workers compensation laws, workplace health and safety laws, discrimination and other relevant laws.
 
Unpaid trials
 
Trial work involves a person performing work (or trialling) at a place of business. If it is expected the person will be performing productive activities, the person would normally be an employee in these circumstances and entitled to be paid as such.
 
If a work experience placement is used to determine a prospective employee’s suitability for a job, the person would be considered an employee for the trial period and should be paid as such.
 
Similarly, probationary employees are paid for all hours worked.  While this does not prevent a person taking up employment after a genuine unpaid work experience, each situation should be carefully considered to determine if the facts have given rise to an employment relationship.
 
Volunteers
 
Another arrangement that would be considered unpaid work is where a person volunteers to help an organisation in its activities or to help achieve its goals. A person may offer to volunteer their services to gain work experience.
 
The Fair Work Commission (FWC) benchbook, which is written in the context of an application for unfair dismissal, describes volunteer work as follows: 
A volunteer is ‘someone who enters into any service of their own free will, or who offers to perform a service or undertaking for no financial gain’.
 The Commission considers volunteerism as an arrangement generally motivated by altruism, rather than for remuneration or private gain. Therefore, the commitments shared between the parties are usually considered moral in nature, rather than legal.
 
Payment unrelated to hours of work or the actual performance of work does not of itself imply that a worker is an employee. In these circumstances, the payment can more aptly be described as an ‘honorarium’ or gift.
 
For example, a worker may receive board and lodgings or reimbursements for expenses and still be considered a volunteer.
 
In other situations, a worker who performs work for non-monetary benefits, such as rent free accommodation, can be considered to be an employee rather than a volunteer.
 
Contractor arrangements that could create problems
 
Other arrangements which relate to contractual matters such as intellectual property, may also create problems for businesses. The following article highlights some of these issues:
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