Worker or just getting experience?

Our previous blog Plug the Hole, in January raised the fact that employers need to be cautious with those who do work experience for them as they could fall foul of the law if they failed to pay at least the national minimum wage, not to mention the risk of HMRC looking in depth into your affairs.

With so many employers still keeping a tight grip on those purse strings, more and more employers are taking on interns. Between April to September 2010, the CIPD’s Labour Market Outlook found that 21% of employers in the UK planned to hire interns, an increase of 8% on the previous year. The big question though is “are employers really aware of the legal implications of doing this?”

In November 2009 the Employment Tribunal awarded Nicola Vetta who was engaged by London Dreams Motion Pictures Ltd, a film production company, on an expenses only basis, over £2,000 for unpaid wages, including payment of accrued holiday.

There is no official or agreed definition as to what an internship is, although it is generally thought that it means a graduate or student receiving practical experience and or training in the work environment. Previously people have used the phrase work experience but they really do mean the same thing.

If the intern or the person on work experience answers yes to the following questions, then they are likely to be regarded as a worker and are therefore entitled to the minimum wage, currently £5.93 for anyone aged 21 and above (rising to £6.08 in October):-

• Is there a requirement on them to perform work personally?
• Is there a sufficient degree of control exercised over the individual by the organisation?
• Is there an obligation on the organisation to provide work and is there an obligation on the individual to do that work?

There are then other factors which need to be considered:

1. Is the person actually doing work of benefit to the organisation? If they are genuinely shadowing someone and not actually doing the work then they are unlikely to be a worker.
2. How long is the placement? The longer the placement the more likely they are to be a worker.
3. Are they genuinely able to come and go as they please or are they required to perform a certain amount of work? The more obligations on them and requirements to complete certain amounts of work the greater the argument that they are a worker.
4. What hours are they working? The more flexible the hours the less likely they are to be a worker but if they have to work certain hours at a specific place then possibly they will be a worker.

Employers should be aware that internships are likely to be a “hot topic” in coming months, particularly as the governments recent new social mobility and child poverty strategy, Opening Doors, Breaking Barriers, has already led the government to ban informal internships in Whitehall.

Bribery Act Update

The Bribery Act will be coming into force on 1st July 2011 and after a long time waiting the government issued their guidance notes on 30th March 2011. At the same time the Serious Fraud Office and Public Prosecutions issued “joint prosecution guidance” on the act. Many Companies will be heaving with a huge sigh of relief to hear that the now customary corporate hospitality that many enjoy is unlikely to fall foul of the Act, provided it is sensible and proportionate and not found to be too lavish.

The guidance itself sets out 6 key principles which are to provide all organisations with a starting point for ensuring that their business are bribery free. The 6 principles as set out in the guidelines are:-

1. Proportionate procedures: - Make sure that any procedures to prevent bribery are proportionate to the bribery risks to that organisation.

2. Top level commitment: - Ensure that those at the top of the organisation are committed to an anti bribery stance and enforce both internally and externally.

3. Risk assessment: - Adopt a risk assessment of all procedures that is proportionate to the organisations size, structure and nature, scale and location of its activities.

4. Due diligence: - Undertake internal and external due diligence procedures which will adequately identify risks to that organisation.

5. Communication: - Make information available both internally and externally so that the organisation can effectively monitor, evaluate and review its bribery prevention procedures. This includes the requirement to train employees where necessary and proportionate.

6. Monitoring and review: - Make sure that the organisation is aware as to how they will monitor and review their anti bribery policies and procedures to ensure that even though the risks that they may face may alter over time, they remain compliant.

With such a short time left before the Bribery Act comes into force it is important that all organisations start to fully assess the risks their organisation is open to and address them at the earliest opportunity, preferably by implementing an appropriate Anti Corruption and Bribery Policy. At the very least, they should ensure that their disciplinary policy, whistle blowing policy and policy on accepting and receiving corporate hospitality and gifts are clear and up to date well ahead of July. Failure to do so may result in severe sanctions including a jail term and or an unlimited fine.