Employment Update - July 2008

Published: 31st July 2008

Traditionally, summer time sees an influx of students into organisations on work experience placements. Work experience can be beneficial to all involved but a recent case highlighted a risk that the organisation had probably not anticipated when it opened its doors to placement students. The organisation involved was City law firm, Freshfields Bruckhaus Deringer, who took on a teenage girl on a work placement scheme. She had carried out work experience at the firm in 2005 and in June last year she spent a further period of time in the firm. Unfortunately during this second period she stole 11 cheques and wrote them to herself in amounts totalling around £60,000. Subsequently the teenager was charged with theft and fraud by abuse of position. She pleaded guilty and was jailed for 5 months. The lesson for us all here is do not be complacent about security and do not leave your organisation open to dishonest or fraudulent activities by 'visitors' you have welcomed in! On a practical point, some organisations ask students to sign confidentiality agreements to help protect them and it could be also worth considering asking for a character reference.

This is an extreme example of what can go wrong with work experience students and it would be a great shame if it put organisations off taking them on. Work experience can be beneficial for both the organisation and the student: - the student gets a 'taster' of the real world and an insight into an organisation and area of work in which they may be interested and the organisation can see the student "in action" in the work environment and consider whether they might be interested in employing them on a permanent basis once they leave college.

Some work experience placements offer the student the opportunity to get genuine 'hands on experience' while others are more of a "watch and learn" experience.

Whether the placement involves the student in carrying out genuine work or in just observing the work of others has implications for the organisation and we touch upon these in this update.

Problems can arise because organisations do not realise that in certain circumstances work experience students may have the status of employees or 'workers' and enjoy the protection and rights that go with this status. This very much depends on the nature of the arrangement with the individual and the expectations of the organisation.

If a student is taken on under a formal work experience scheme with an understanding that they are obliged to carry out certain tasks and be paid for them and the individual is under some degree of control by the organisation (such as a requirement to attend for certain hours or to carry out certain tasks) then they are likely to be classed as employees. This means that they can benefit from the protection that goes with that status, such as the right not to be dismissed for asserting certain statutory employment rights.

It is not always clear cut whether an individual is an employee or not. A key test that is used by employment tribunals to help determine employment status is whether there is an obligation on the organisation to provide work for the individual and whether there is an obligation on the individual to carry out work. It follows, therefore, that if the arrangement with the individual is just that they can turn up when they wish, don't get paid and don't have to do anything when they are in the organisation, apart from watch, then they are unlikely to be deemed to be employees.

However, even if the student is not paid, they may still be deemed to be a worker. This may arise if the test for employee status is not met but the individual is under some personal obligation to the organisation such as to provide a service for them - for example, carrying out certain work.

Consequently, organisations should be mindful that, in certain circumstances, work placement students may be classed as employees or, more often, workers. If they are then the organisation should be aware that, amongst other things:-

• The student may be eligible to be paid the national minimum wage;
• The student may be protected by the Working Time Regulations and be entitled to statutory rights such as paid holiday;
• The anti-discrimination legislation covers not only employees but workers. This means that work experience students have the right to bring discrimination claims against the organisation (or its employees);
• They must ensure that a risk assessment is carried out in relation to health and safety of the work experience, taking into account that special rules apply to young people under the age of 18. It is essential that the organisation carries out the assessment of risks to the student before they start the placement.

Given the potential liabilities and risks that can arise in the circumstances outlined in this update (which arise mainly when the student is required to carry out certain work, or to work particular hours and if they are paid), organisations might prefer to take to the easier option which is for the placement to be unpaid, with no obligations on the student to carry out work or on the organisation to provide any. In this situation it would be more of a 'watch and learn' type of experience.

However, this route may not give either the student or the organisation the opportunity to gain as much as they might from the work experience if the student was able to get some genuine 'hands on experience'.

In summary, there are risks for the unwary in taking on work experience students but hopefully this will not deter organisations from getting involved in what can be a mutually beneficial experience.

If you have any concerns about your organisation's potential liabilities in relation to work experience placements and students then we advise that you should seek specialist legal advice.