10 weeks of unpaid work did not constitute an employment relationship

In a recent case, Klievens v Cappello Row Lawyers , the Fair Work Commission found Practical Legal Training was not employment and was instead a vocational placement.

Mr Klievens was a law graduate required to undertake Practical Legal Training (PLT) to be qualified as a solicitor. He met with Ms Cappello, an employee of Cappello Row Lawyers, to discuss commencing PLT at the firm. As a consequence of this meeting, Mr Klievens formally commenced unpaid PLT at Cappello Row Lawyers on 5 August 2016.

Throughout his PLT, solicitors at Cappello Row Lawyers recorded time for reviewing work Mr Klievens had performed, however clients were not charged for Mr Klievens’ work.

On 14 October 2016, Mr Klievens commenced formal employment with Cappello Row Lawyers. On 27 March 2017, Mr Klievens wrote to Ms Cappello and complained about several issues in the workplace, stating these issues had impacted his health and he was seeking a referral to a psychiatrist from his GP.

Mr Klievens was diagnosed with “anxiety, insomnia, and depression” 2 days later. On the same day, he received a termination letter stating his employment was terminated due to reduced business at the firm.

Mr Klievens claimed he was unfairly dismissed. Cappello Row Lawyers argued he was not eligible to bring an unfair dismissal claim as his employment did not meet the minimum employment period because the work performed during the PLT was not “employment”. It was not billed to clients, he was set research tasks with little value to the company, he attended work when he wished, and he was not paid.

Similarly, one employee at Cappello Row Lawyers stated that Mr Klievens assisted administratively and with legal research, however he was allowed to follow solicitors to court cases as he pleased and was not assigned deadlines or cases.

Conversely, Mr Klievens claimed the work he performed during his PLT was more than vocational placement and he was attending the workplace full-time and undertaking work of value as the PLT progressed. He claimed that from 15 September 2016, he was doing the same work as paid employees and Capello Row Lawyers had a high degree of control over when he attended the workplace.

In line with this contention, an employee said Mr Klievens was assigned as part of a team working on a large case and she delegated some tasks to him.

Decision

The Fair Work Commission said the following of an employment relationship:

1) Unpaid work experience is often conducted on a full-time basis and is not evidence of the existence of an employment relationship. The fact that Mr Klievens worked on a full-time basis was thus immaterial.

2) Work is more likely to suggest an employment relationship exists if it is to help with the ordinary operation of the business rather than work performed for experience.

While the intended setup of a PLT is to include “real work” and not be limited to observational work, a PLT is not required to generate revenue for the firm. Further, PLT meets the definition of a vocational placement as remuneration does not have to be paid, it is undertaken as a requirement of an education or training course and it is authorised under law or an administrative arrangement of the Commonwealth, a State or Territory.

3) The longer the period of engagement, the more likely an employee relationship will exist. Mr Klievens’ PLT placement was relatively short, being only 31 days over 10 weeks.

4) If the work is significant to the business, meaning the work is normally performed by paid employees and the business requires the work to be performed, then it is likely the person is engaged in an employment relationship.

Although Mr Klievens performed some ancillary tasks, the majority of his tasks, even those that would be considered “significant work”, were performed within the scope of his PLT.

5) Mr Klievens was not expected to assist the firm generate revenue and there was nothing to suggest an intention to enter into an employment relationship or an expectation to receive payment for his work.

6) Mr Klievens received the main benefit of the arrangement as he had just finished a law degree and was eager to obtain a practicing certificate which he could not do without completing a PLT. Additionally, the work performed by Mr Klievens’ was not billed to clients.

The Fair Work Commission found the work performed during Mr Klievens’ PLT did not constitute employment. He thus did not satisfy the minimum employment period of 6 months to be able to bring an unfair dismissal claim.

The case was subsequently dismissed.

Key issues for employers

This case demonstrates the key elements required for an employment relationship to exist. Employers who engage unpaid work experience students or interns should be aware that an employment relationship is likely to exist if:

• the work occurs over a substantial time period;

• the individual assists in the ordinary operation of the business;

• the individual completes tasks that would ordinarily be completed by paid employees;

• the individual is expected to work on productive activities; and

• the employer receives the main benefit from the arrangement.

Determining whether an employment relationship exists is crucial for employers. If it does exist, then not only may the individual be protected from unfair dismissal, but they are also entitled to the employment conditions in the National Employment Standards such as the minimum wage, annual leave, personal leave, etc.

Read the full decision here

* PCC Employment Lawyers are a team of employment practitioners based in Sydney, with many years of combined knowledge and experience in workplace law, industrial relations, workplace investigations and training.  They provide a high standard of excellence and an exceptional level of personal service to a variety of clients in the Sydney metropolitan area, Central Coast, regional NSW and interstate. 

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