Exciting times for INTERNSHIPS

Our hopes for a taxpayer funded internship program to modify the Work for the Dole have been dashed at the same time as we were encouraged to learn that the Victorian Government was opening new opportunities for work (*see below)  for those who are not covered by federal schemes.  The differences are significant.

On budget night we, at ‘Life. Be in it.’ were excited to hear the Treasurer indicate that the Government had accepted the need to add INTERNSHIPS to the range of apprenticeships and traineeships for the long-term unemployed.  The Treasurer called it "real work for the dole" -- a massive framework to get young people off the couch and into jobs at the centre of his first budget.

From April 2017, unemployed young people can participate in "intensive pre-employment skills training," which will include teamwork activities, presentation, technology literacy and job-hunting skills. This new youth jobs project -- titled Prepare, Trial, Hire, with the strained acronym PaTH – hopes to facilitate 120,000 internships over four years, giving incentives to employers who take on young people with the hope that internships will lead to proper paid jobs.

The media initially informed us that ACOSS and community organisations welcomed the announcement of the PaTH youth internship program, only to report their disappointment as more details were announced by Minister Cash.

ACOSS head Dr Goldie, says  "young people in the internships should receive at least the equivalent of the minimum hourly wage or a training wage where appropriate training is provided".

"It's also essential that health and safety protections are in place, that interns are mentored and have the opportunity to raise complaints of exploitation, that existing workers are not displaced, and that employers can't 'churn' people through internships without offering them jobs," she said.

"If a long-term unemployed young person gets a job as a result of being offered the opportunity to demonstrate their abilities, that's good for them, good for society, and it also strengthens jobs growth in the long run. On the other hand, work for the dole is a punishment, not a opportunity."

"The program should be seen as a complement to apprenticeships not a replacement for them."

 After two years of seeking a meeting with the Employment and Vocational Ministers this appeared to be a great step forward. Employment Minister, Michaelia Cash initially said that to take on a taxpayer-funded intern, a company would have to have a real vacancy. A day later she completely reversed her position on this key Budget policy and indicated that there was to be no requirement of additional employment.

A treasury spokesperson indicated  that enrolments in the program would be sourced through employment and welfare services, and that participation would be voluntary for both job seekers and businesses. Then we learned that at least part of the scheme would be compulsory and that international standards for internships were not to be introduced to protect workers from exploitation.

Minister Cash said the training would include "two blocks of three weeks, up to 25 hours a week.” It will be compulsory for all young job seekers within the first five months of being in receipt of welfare It’s part of your mutual obligation requirement. The alternative is this: we let our youth linger in welfare for the rest of their lives."

Minister Cash indicates that the employment department would monitor the program to ensure displacement does not occur indicating that if abusers exploit the program or job seekers, those employers will then be banned from using it.”

An innovative centrepiece of Tuesday's federal budget, the PaTH -- 'prepare, trial, hire' -- scheme was originally introduced by the Treasurer as offering opportunities for 120,000 intern placements for young people currently on unemployment payments. but unlike the Victorian Government* JVEN scheme, does nothing for those that are ineligible for federal programs.

The $750 million program gives "intensive pre-employment skills training" including teamwork activities, presentation, and technology literacy and job-hunting skills. Then places young people in trial internships of four to 12 weeks, Employers are to be given financial benefits to take on interns, and larger payments if they actually employ that person after their internship ends

Once the job skills program is finished, young people will be paired with employers -- examples in budget documents include supermarkets and newsagents -- to "gain valuable work experience within a real business". Job seekers and businesses will work together to design the work placement, which can run from four weeks to three months and include 15 to 25 hours a week of work.

Businesses will be given an upfront $1000 incentive to take on such "interns", while up to $10,000 in wage subsidies will be offered if the job seeker is taken on as a proper employee; a sort of "direct action" for employers. It is reported that an employer could save in excess of $400 per week by taking on an intern instead of a standard paid employee.

The treasurer said that in 2012, 12 percent of Australian children under 15 lived in a jobless home, with the PaTH program targeted at young people from families with generational unemployment. The internships are paid, in a way; in addition to existing welfare payments, young jobseekers who work up to 25 hours a week can get $200 extra in their pockets.

In our submissions to all parties, we suggested adoption of a combination of on and off the job internships with small businesses that have additional job vacancies including a 25 hour per week on and off the job training program that would follow career counselling, trial placements and wage subsidies in the second six months providing an equivalent to the minimum hourly rate.

Peter Strong, the Council of Small Business Australia is reported to have told the government that requiring business to have a genuine vacancy would damage take up of the scheme. John Hart, CEO of  Restaurant and Catering Australia says that a vacancy first approach could be 'self-defeating'

The opposition has not taken up our alternative approach that combines prior vacancies, on and off the job training  and  would follow the rules adopted to prevent exploitation of unpaid interns and employee substitution in Canada and States of the USA that state:-

“Unpaid internships are illegal unless the internship falls under one the three narrow exceptions listed in Ontario’s Employment Standards Act:

1. Internships that are part of a program approved by a secondary school board, college, or university;
2. Internships that provide training for certain professions (g. architecture, law, public accounting, veterinary science, dentistry, optometry);
3. Internships that meet the six conditions required for the intern to be considered a “trainee”:
4. The training is similar to that which is given in a vocational school
   2. The training is for the benefit of the individual
   3. The person providing the training derives little, if any, benefit from the activity of the individual while he or she is being trained
   4. The individual does not displace employees of the person providing the training
   5. The individual is not accorded a right to become an employee of the person providing the training
   6. The individual is advised that he or she will receive no remuneration for the time that he or she spends in training
   .

The proposed rules and procedures need to consider these constraints, provide for workers compensation and career counselling that are based on real job vacancies. This needs to address the ACTU concern that employers who want to do the right thing are disadvantaged, because they are forced to compete with dodgy employers relying on  cheap labour to get their work done.

It is not too late for the incoming Federal Government to work with the Victorian Government to establish a genuine guaranteed income scheme based on a “learn and earn” INTERNSHIP framework that avoids the perils of exploitation and absence of supervised training being addressed by the ACTU and ACOSS in their statements of concern about the current proposal..

* The Jobs Victoria Employment Network (JVEN)  aims to:

• assist Victorians who are disadvantaged in the labour market to gain and retain employment, contributing to increased social and economic inclusion and assisting Victorian businesses to meet their skills and labour needs

•  contribute to a more coordinated and streamlined suite of employment-related services for Victorian jobseekers that extend beyond existing Jobactive regional schemes.
• U P D A T E   FROM    Giri Sivaraman

• Malcolm Turnbull's internship program will create a new working underclass

  This election campaign has started with a promise of jobs and growth but the Turnbull proposed "internship program" threatens to create a new working underclass, in what is essentially corporate welfare and government endorsed 7-Eleven-style worker exploitation.

  This seriously flawed proposal sets out a plan to engage unemployed youth as interns for $4 per hour. This devalues blue-collar work and is setting the course for the Americanisation of the employment market. It could also be illegal. If the internship is considered a contract between employer and employee, then the intern is entitled to minimum conditions set out in FairWork and other legislation. Four dollars an hour is not even close to minimum wage.

  Historically, internships allowed young people seeking employment in skilled professions such as medicine to obtain experience in a low-risk, supervised environment. In recent years the traditional internship model, which was inextricably linked to education and white-collar work, has undergone a significant metamorphosis due to the increasingly global economy. In Australia, interns are not generally able to look forward to the prospect of secure employment at the end of the internship period.

   According to the Interns Australia 2015 Annual Survey, only 21.39 per cent of respondents were offered ongoing employment at the end of their internship period.

  Internships have never been as significant in the Australian labour market as they have in other jurisdictions like the United States, where interns can work up to 40 or 50 hours for free. Internships have also never really been used to carve out employment pathways in blue-collar jobs. Features of the program are barely distinguishable from current jobseeker requirements under our social security law, which allows jobseekers to engage in up to four weeks of work experience. The current program is really just another tip of the hat to the private sector.

  What the federal government proposes is a dramatic departure from acceptable forms of vocational training.  The program exists in a murky legal space, which exposes vulnerable young workers to an unacceptable risk of mistreatment.

  There is a very fine line between genuine unpaid educational or vocational work and legally impermissible unpaid labour. Conveniently for the government, the Fair Work Act 2009 (Cth) is silent on the definition of "intern" and does not adequately define "vocational placement", meaning there is potential for unprincipled employers to avoid compliance with workplace protections, like paying youth jobseekers a minimum wage.

  Under the program, businesses need only demonstrate a "reasonable prospect of a job" instead of an actual job at the end of the "internship" period to qualify for government incentives. 

  Businesses stand to gain significant sums in return for taking on "interns" under the program, with no tangible obligation to keep them at the end of the period. With the lack of jobs in the current market, what this really means is that businesses will get to exploit the cheap labour of program participants because the program does not create an employment relationship, meaning they will be outside the scope of the Fair Work Act's protection.

  It is wholly inconsistent with Australia's industrial law framework to normalise systemic underpaid work and support the avoidance of workplace protections. There is little evidence in the Australian jurisdiction to suggest that the program will produce the benefits it anticipates. If the government is really serious about developing policy that will meaningfully engage youth jobseekers in the labour market, they will consider measures that foster the protection and security that employment relationships offer, or alternatively, appropriately regulate their program to ensure the protection of vulnerable workers.

  Giri Sivaraman is a principal in employment and industrial law at Maurice Blackburn