The owner of a childcare centre is facing court accused of not paying two student workers for an entire year, in a case highlighting the nuances of unpaid internships and work experience.
Both Chinese workers at Joys Child Care centre in Sydney’s west performed general duties at the long day care centre between February 2016 and February 2017, and were initially taken on under a work experience placement as part of their studies.
However the centre and its owner, Jan Shang, extended these placements indefinitely, which the Fair Work Ombudsman determined was well beyond the required four-week unpaid period of work experience.
In doing so, Mr Shang was able to retain $54,752 in unpaid wages and entitlements.
A major part of its justification for taking legal action against Mr Shang and his business was that both workers were found to have carried out duties with little to no supervision, making them entitled to wages rather than being classified as supervised work experience students.
The Fair Work Ombudsman issued compliance orders to Mr Shang and Joys Child Care in November 2017 to pay the two workers in full for the period or dispute the findings in court. However, he failed to do so.
If found guilty of breaching the Fair Work Act by not abiding by the compliance notices, Mr Shang faces a personal penalty of up to $6,300 while his business could stand to lose $31,500, in addition to the unpaid wages.
The case will go to court on 18 June.
“Legitimate internship and work placements can be a genuine way for people to further their learning or gain skills that assist in finding employment,” the Ombudsman, Natalie James, said.
“The system allows for unpaid work in some circumstances — for example, where they are part of an approved program. But the law prohibits the exploitation of workers by characterising them as ‘interns’ or as doing ‘work experience’ when those individuals are fulfilling the role of an employee. Such workers must be paid minimum employee entitlements.”
Ms James warned employers to also keep their records accurate and up-to-date, since amendments to the law now place the burden of proof on employers rather than workers.
“A reverse onus of proof can also now apply, meaning that employers who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove allegations of underpayments made in a court,” said Ms James.
“If you have failed in your obligations to keep records — obligations the courts have held to be ‘the bedrock of compliance’ — any records kept by employees will be the first reference point for the Fair Work Ombudsman and the Court.”
Last month, another childcare operator was charged by police over a $5.7 million fraud, after some 1,600 false enrolments were lodged in a bid to claim government funding.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.