Newspaper article International New York Times

Lawsuit in Australia Challenges Companies' Use of Unpaid Internships

Newspaper article International New York Times

Lawsuit in Australia Challenges Companies' Use of Unpaid Internships

Article excerpt

Australia is about to test just how much employers can ask young workers to do without paying them.

Stuart Cottle's first unpaid internship here landed him on "The Great Gatsby" movie set. From there he headed to New York, where he worked on high-end fashion set designs.

Both seem like cushy gigs, but each came with a catch: One was unpaid; the other didn't pay the rent.

Although he said they were "privileged positions" that eventually secured him the offer of a much sought-after job, they drained his bank account. Mr. Cottle, 28, used his savings to live in New York.

But Australia is about to test just how much employers can ask young workers to do without paying them -- often in positions loosely termed training or internships -- before facing fines for breaching Australia's labor laws.

One of the most prominent cases in Australia involves the sports broadcaster Crocmedia, which is in Federal Circuit Court over the issue. Gemma Smith, at the age of 20, produced radio programs there, starting her shifts at midnight or later and finishing just before dawn. In the six months she spent at the media company, which began in August 2012, she worked as many as seven days out of 10. She was paid nothing.

Jonathan Wilkinson, starting at age 23, worked about the same hours in his 15 months with Crocmedia. He was paid 2,940 Australian dollars, or about $2,500 at current exchange rates, but should have made almost seven times that amount, the lawsuit says.

Court documents show both should have been paid about 18 Australian dollars, or about $15, per hour under minimum wage laws as casual workers. Crocmedia, which is based in Melbourne, has since paid the former interns but may face fines for breaches of workplace laws when Judge Grant Riethmuller hands down his decision on the lawsuit, which was filed in June 2013. Mr. Wilkinson was not immediately reachable for comment; Ms. Smith declined to comment.

Steve Ronson, executive director of the Fair Work Ombudsman, an Australian agency that oversees workplace issues, said, "The significant alleged underpayment of vulnerable, young workers and the need to deter employers from such behavior were key factors in the decision to commence legal action."

Crocmedia's marketing and communications manager, Leah Grant, said the company could not discuss the case until the judge handed down his decision.

A ruling in favor of the interns could open the possibility of legal action for pay and benefits for any underpaid intern in the past six years, under Australia's Fair Work Act, said Josh Bornstein, an employment lawyer and a principal at the national class action specialists Maurice Blackburn Lawyers.

Rosemary Owens, a University of Adelaide law school professor, said, "At the very least, employers will have to sit up and take notice."

She said the practice of using young people and not paying them was common in many industries. …

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