When is an intern not an intern? When she’s an employee
Senior Associate Gerard Elwell spoke to the National Business Review about what constitutes an employee.
Read the full interview below:
Assumptions about what constitutes ‘employment’ continue to be “unpicked and overturned” in the country’s employment courts, with a recent case putting interns and how they are compensated under the microscope.
The case, heard in early June in the Employment Relations Authority, pitted intern psychologist Melanie Govender and her union against the Ministry of Education, and examined the nature of arrangements for post-graduate students of educational psychology undertaking a practicum placement as an “intern psychologist”.
Gerard Elwell, senior associate with Young Hunter Lawyers, said while each case in employment law is decided on its own specific facts, the fundamental test being applied more and more is, “What is the real nature of the relationship between the parties?” The question has come up as the courts have looked at contractors, volunteers, cadets, trainees, as well as the current case examining the nature of internship – especially when it looks, for all intents and purposes, like an employee-employer relationship.
The case has echoes of those coming out of Gloriavale. In 2022 three men from the secretive religious community challenged a Labour Inspectorate finding they were volunteers and thus not entitled to pay or employment rights; the finding was that they had been effectively ‘employees’ from the age of six. A second case concerning six Gloriavale women who said they lived in servitude looked at whether the women were employees rather than volunteers. Chief Judge Christina Inglis has reserved her decision in that case for now.
While the internship case does not contain the extreme level of exploitation that seems to have been a feature of those emanating from Gloriavale, it does represent “another sort of landmark in the movement towards narrowing the opportunities for organisations to engage people and not treat them as employees,” Elwell said.
The case
Authority member Robin Arthur heard that Govender, a member of the Association of Professionals and Executive Employees (APEX), undertook a placement with the Ministry as an intern psychologist in 2019, during her second year of post-graduate study.
This arrangement benefits the student, who needs at least 1500 hours of supervised practise as part of their professional training to attain a qualification. But the Ministry of Education also benefits in terms of fulfilling its own staffing needs and in help with maintaining and developing the educational psychology workforce generally.
Payment for the placement is by way of a scholarship for $25,000, usually paid in two instalments over 40 weeks.
There is a slew of support provided by the three universities that are party to this scheme – Massey University, Victoria University of Wellington and the University of Canterbury – to ensure students are able to fulfil their practical requirements, while being properly supervised and assessed, including “providing access to a diverse range of cases and projects required to fulfil university requirements”.
The latter point was particularly important to the Ministry’s case as it said all those arrangements were for the primary purpose of enabling the intern to carry out the practical assignments needed to complete their university course requirements. APEX, meanwhile, said it indicated that interns were, in reality, working in the same way as other employees of the Ministry.
The work
The work comprised of a regular workday, with absences not allowed unless okayed by a supervisor, and detailed assessment reports required on regular (seemingly quite challenging) cases coming through regular channels (i.e. schools). The Ministry actually argued the assessment reports were more than what was required by qualified educational psychologists, but appear to have been somewhat undone on this point by a video on its own website in which an intern states she was doing “everything a registered educational psychologist would do, but we’ve got the bonus of having supervision and someone checking what we do”.
A point of contention was working alongside qualified psychologists doing exactly the same work and getting paid as employees, said Elwell. The salary of an employee in the job wasn’t even that much more – about $47,000, amounting to some $5000 more than the scholarship if pro-rated – but also allows for benefits that come with it of KiwiSaver, annual leave, and sick leave, none of which accrued for interns.
“In one sense, it's a reminder that it's very complicated if you have two classes of workers within the same organisation, because you immediately open yourself up to a direct comparison,” the employment law expert said.
“And that was the comparison made by the decision, saying that essentially the interns were doing the same tasks, and there was already a category and an award rate or salary for people being intern psychologists [if they had were seconded from other roles], and therefore, it should have applied to the student interns.”
Principles
At issue with for the ERA was whether the arrangements were for the primary purpose of completing training rather than carrying out the work and, if so, whether that precluded a finding that there was an employment relationship.
Like a recent case involving Uber drivers, the case hinged on a few main facts including that the interns “did not control their own hours and their tasks” and were “providing a benefit to the organisation by either doing something that generated profit or alleviated a task that someone else would need to be paid to do”, said Elwell.
Authority member Arthur concluded the ‘real nature’ of the relationship was one of employment. He said the finding was “consistent with the direction of travel apparent in many employment law cases in recent years where assumptions about what is work, what is employment and what it is worth have been unpicked and overturned… People who have to sleep over at their workplace are now recognised as not just resting but also as working; people at home but ‘on call’, and who must be ready to hurry in to their workplace at a moment’s notice, are now acknowledged as working.
“The assumption that certain categories of work or occupation are ‘naturally’ worth less than others has been debunked by the development of pay equity principles and legislation.”
Govender was awarded just over $5000 in salary arrears, plus the amount owing from holiday pay and Kiwisaver contributions.
Elwell called the finding “very much a shift”.
“It's something that not many students or interns may have challenged previously; there may have been wide discontent behind the scenes but most just accepted that was the way it was. But there really are now much wider implications for internships and how they are managed.”
Click on the link below to watch the full interview.
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