Offering Internships? You May Have to Pay the National Minimum Wage

Employers who offer unpaid internships often feel that they are acting benevolently in giving inexperienced people a chance to learn the ropes. However, many interns have a legal right to be paid the National Minimum Wage (NMW) and, as one case showed, a failure to remunerate them accordingly…

Aug 17, 2022

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The case concerned two former unpaid interns at an online publishing company who complained to HM Revenue and Customs that they had not been paid the NMW. An investigation ensued, which culminated in the company being issued with a notice of underpayment. It was directed to pay the interns a total of more than £5,000 and received a penalty of £9,207 for its failure to pay the NMW.

Challenging that outcome, the company asserted that the interns were not ‘workers’ within the meaning of the National Minimum Wage Act 1998 and were therefore not entitled to receive the NMW. It said that they were mainly engaged in shadowing experienced personnel and that tasks they performed were for their own benefit and of no benefit to the company. It contended that, had it considered them workers, it would have sacked them for their slow and under-par performance.

Rejecting the appeal, however, an Employment Tribunal noted that, by virtue of Section 28 of the Act, there is a presumption that an individual qualifies for the NMW unless proved otherwise. The interns, who were not students or volunteers, did not fall into the category of workers undergoing training or work experience who are excluded from entitlement to the NMW.

Their roles were not confined to shadowing and some of the tasks they carried out were clearly in furtherance of the company’s business. The suggestion that they provided no benefit to the company was disingenuous. There was a verbal contract between them and the company, and they were expected to work to it. They could not substitute others to perform their tasks and, far from being free to come and go as they pleased, they were required to be in the office for eight hours a day.

Should the National Minimum Wage Be Paid During Induction Training?

Many employers require prospective employees to undergo induction training before they are taken onto the payroll – but, during such training, are prospects entitled to receive the National Minimum Wage (NMW)? The Employment Appeal Tribunal (EAT) addressed that issue in an instructive decision. The case concerned a care professional who was offered a job by a company that provided home-based services for adults. She was required to carry out a week of induction training before she was given a…

Disability Discrimination – ET’s Reasons for Dismissing Claim ‘Inadequate’

One of the most fundamental principles of justice is that unsuccessful litigants must be given an adequate explanation of the reasons why they have lost. In the context of a disability discrimination claim, an Employment Tribunal (ET) was found to have failed in that basic task. The case concerned a probationary employee who suffered from medical conditions that amounted to a disability. She was dismissed, purportedly due to performance issues. She launched a direct discrimination claim on the…

Employment Contracts and the Implication of Terms by Custom and Practice

Workers wishing to discern the extent of their entitlements need usually do no more than read their employment contracts. As one case showed, the occasions when further rights are to be implied into a contract, having been established by custom and practice, are few and far between. The case concerned a claim by 27 ex-employees of a food company to enhanced redundancy payments. Their contracts did not expressly give them a right to such payments, but they argued that the company and others in…