"...the available evidence...indicates that unpaid work exists on a scale substantial enough to warrant attention as a serious legal, practical and policy challenge in Australia." - page xi
The Australian government is taking a huge step forward in addressing in the growth of unpaid labour, particularly unpaid internships, in the youth labour market. Last week Australia's Fair Work Ombudsman ("FWO"), a Federal agency dedicated to ensuring compliance with workplace laws, released a landmark report (it clocks in at 382 pages) entitled "Experience or Exploitation? The Nature, Prevalence and Regulation of Unpaid Work Experience, Internships and Trial Periods in Australia". To the best of my knowledge this is the first comprehensive examination of the growth of unpaid labour by any Western government.
This post is going to provide an overview to the research, cover off what's actually in the report, point out the key recommendations arising from it, and comment on the references in the report to Canada's approaches to unpaid labour.
Who Wrote the Report and What Research Methodologies Were Used?
The report was authored by Rosemary Owens and Andrew Stewart. Both of whom are law professors at Adelaide Law School and internationally recognized experts in the field of workplace law. The report represents a progression in the efforts of the FWO to grapple with the issue of unpaid labour. In 2011 the FWO released a comprehensive fact sheet on unpaid internships and decided that a comprehensive report was necessary to scope the full dimensions of the problems associated with unpaid labour in the youth labour market.
The authors deployed a number of approaches in conducting the research and preparing the report. First, they engaged in an analysis of the relevant laws in Australia governing unpaid labour, international standards arising from the International Labour Organization ("ILO"), and the approaches to unpaid labour in Canada, the United States, New Zealand, and the United Kingdom. Second, a comprehensive review of policy materials and literature surrounding the school-to-labour market transition was conducted. Third, the authors conducted a series of interviews with key stakeholders in from post-secondary institutions, government, industry, organized labour, and young people themselves. Fourth, a number of surveys were distributed in different geographical areas to gauge the deployment of unpaid labour in the youth labour market.
What Ground Does the Report Cover?
The report is comprehensive and I'm not going to attempt to summarize it much beyond giving you a basic sense of what it covers. Chapter 1 covers the origin, focus, preparation, and structure of the report.
Chapter 2 (starts at page 13) of the report starts by locating the discussion of the growing use of unpaid labour in the context of the school-to-labour market transition. This is a key period of transition in the lives of youths where many aspects of their life-course are set. This framework is grounded in recent ILO research on youth employment (see: here and here). This chapter also covers the fall-out from the financial crisis and the impacts arising from globalization.
Chapter 3 (starts at page 28) of the report covers the nature and prevalence of unpaid labour. First off, the report notes that there is a lack of data (official or unofficial) arising from government statistics and that the report had to rely on other methods to chart of the scope of unpaid labour. A number of examples are provided in the chapter to illustrate the concerns relating to unpaid labour. The chapter also contains an excellent discussion of the use of work-integrated learning programs at the secondary and post-secondary level. Finally, this chapter ends with an examination of the prevalence of unpaid internships in the labour market via a discussion about: what are internships; how widespread is the practice; which industries use internships; and, how internships target young migrant students and workers.
Chapter 4 (starts at page 72) and chapter 5 (starts at page 89) charts the legal regulation of unpaid labour under Federal, state, and territorial laws. Chapter 4 starts by reviewing various legal definitions, such as "employee", "employer", and "vocational placement. From there the impact of the Fair Work Act 2009 is reviewed in light of issues such as as minimum wage, enterprise agreements, obligations on the employer, and the consequences arising out of non-compliance. Chapter 5 covers the application and impact of other types of statutes on the legal regulation of unpaid labour, laws reviewed cover the regulation of: industry; education and training; child labour; occupational health and safety; workers' compensation; anti-discrimination; superannuation; and, consumer protection.
Chapter 6 (starts at page 116) covers a topic near and dear to my hear: whether employment contracts exist in the context of unpaid labour. The chapter runs through key aspects involved in the formation of an employment contract, including the intention to create a binding agreement, consideration, mutuality of obligations, and the what employment status exists in the context of unpaid labour.
Chapter 7 (starts at page 155) addresses the oft-ignored area of migration and unpaid labour. The chapter examines how unpaid labour is regulated under Australia's immigration laws. The focus here is on young workers and students coming to live or work in Australia and whether these specific groups face heightened risks for exploitation by unscrupulous employers.
Chapter 8 (starts at page 183) overviews the various approaches to the regulation unpaid labour in the school-to-labour market transition. Four common law jurisdiction are examined, these are: Canada, New Zealand, the United Kingdom, and the United States. Additionally, the use of unpaid internships at international organizations (i.e. the United Nations) is also examined. This chapter makes for some interesting reading if you're interested in comparative labour law.
What Responses Does the Report Recommend?
Chapter 9 (starts at page 245) finishes the report by recommending a multi-pronged response to the growing problem of unpaid labour in the Australian labour market. The recommendations centre around increased education and better compliance efforts. There six distinct areas are: defining unpaid work experience; expanding guidance and education activities; greater education and compliance activities in relation to unpaid labour; commencing test cases; partnering with other government agencies to construct a coordinated response to unpaid labour; and, greater stakeholder engagement.
One of the points that the report raises (on page 245) is that ameliorative action is needed to prevent Australia from going down the route of the United States (and arguably Canada) where young people are forced to engage in long periods of unpaid labour in a wide swath of industries if they are to gain the necessary experience to obtain paid employment. It's important to note that enforcement action can have an impact on the prevalence of unpaid labour in the labour market and taking concrete steps can have an effect.
The FWO outlines their proposed responses to the report's recommendations in this document (see pages 6 to 10). Here are the main regulatory responses: developing a position on what constitutes illegal unpaid labour; develop educational training materials such as online content, industry-specific materials, a handbook/e-book, and e-learning training; a targeted engagement, monitoring, and enforcement strategy which is industry specific; give consideration to developing a litigation strategy; liaise with other government agencies to coordinate strategy on unpaid labour; and, develop a stakeholder engagement strategy focusing on the post-secondary educational institutions and industries where unpaid labour is common.
When it comes to regulation of the labour market, unsurprisingly, I'm a big fan of the hard law approaches, rather than soft law approaches. Overall the FWO's proposed responses are quite sensible, but I have two critiques of the FWO's proposed responses. First, a dedicated litigation strategy is absolutely necessary to show employers that the fist is ready when the velvet glove doesn't persuade compliance. Second, the role of technology needs to be grappled with and new enforcement techniques developed that address employers using the anonymity that the Internet provides to cloak their illegal actions. I won't say much other than to point people to some of my earlier writings on the intersection of technology and employee misclassification or the proposed ban on advertising illegal unpaid internships in the United Kingdom.
What Does the Report Say About Canada's Approach?
The report (see pages 187 to 201) reviews the approaches used by Ontario and British Columbia in regulating unpaid internships. It utilizes some of my early research into the legal regulation of unpaid internships, selected blog posts, and my recent submission to the Law Commission of Ontario on the issue of unpaid internships. The report also references Leah Vosko's excellent book Managing the Margins and the Law Commission of Ontario's research on vulnerable workers and precarious work.
The report Juxtaposes B.C.'s approach to Ontario's one is interesting given that B.C. (at least on paper) officially acknowledges the problems arising from unpaid internships and provides some sensible guidelines. Ontario on the other hand gets criticized in the report (at page 193) for the misleading fact-sheet on unpaid internships that appears on the Ministry of Labour's website which lacks any context or commentary that interns or employers can refer to.
The report covers off the statutory approaches under employment standards legislation in B.C. and Ontario. There's a review of some of the Ontario Labour Relations Board jurisprudence, which is fairly reasonable and straight-forward for the most part. The report also hones in some of the problematic outlier decisions arising from B.C.'s jurisprudence that fail to grasp that interns derive employee status from B.C.'s Employment Standards Act.
Here is some of the media coverage on the release of the FWO report, see: here, here, here, and here. Check out Nicholas Wilson, Australia's Fair Work Ombudsman, discussing the report and laying out the FWO's response, see: