The Government's Internships-for-cash Scheme "Wide Open To Abuse" Says Employment Law Expert - SmartCompany

By Alan J. McDonald

Malcolm Turnbull has revealed small and medium businesses may be eligible for cash bonuses if they offer internships to unemployed young people, as proposed in the 2016/17 budget. McDonald Murholme managing director Alan McDonald discusses the potential for interns to be used and abused with no protection from the Fair Work Act.

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The government’s internships-for-cash scheme “wide open to abuse” says employment law expert

The Government’s internships-for-cash scheme announced in Tuesday’s federal budget is “wide open to abuse”, according to an employment law expert.

Malcolm Turnbull’s first budget revealed small and medium businesses may be eligible for cash bonuses if they offer internships to unemployed young people.

The ‘Youth Jobs Path’ program has three stages, including:

A six-week training program for job seekers in collaboration with employment services groups;
A voluntary internship program, with participating businesses receiving $1000 upfront to host an intern for between four and 12 weeks. The intern will receive $200 a fortnight in addition to their income support payments; and
A wage subsidy of between $6500 and $10,000 for businesses that go on to employ the intern.

While the business community initially welcomed the announcement, doubts began to surface yesterday when Employment Minister Michaela Cash told ABC Radio businesses will have to verify they have a “real job vacancy” before taking on an intern.

However Alan McDonald, managing director of McDonald Murholme lawyers, told SmartCompany this goes against what an internship actually is.

“A true internship is one where there is no job offering, but where the employer volunteers to create an opportunity for a well-intentioned young person who is keen to learn,” McDonald says.

“It might lead to one if a job becomes available. But an internship is volunteering, not a job opening.”

McDonald says from an employment law perspective, the scheme is “wide open to abuse” as it appears the interns will not be protected under the Fair Work Act.

“We are seeing record numbers of disputes between employers and employees, even in the regulated environment of the Fair Work Act,” he says.

“So how much worse would it be if there was no regulation [like in this policy]? I’ve got real concerns about this.”

“Why can’t they make apprenticeships better? Why would a small business put a big effort into an intern – inducting them, training them, showing how their business works – if that young intern can simply go out and work for a big business after?”

However, Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany he spoke to the employment minister last night.

Strong says Cash clarified that businesses will not have to prove they have a job opening to access the internship scheme, but, rather, show they have an opportunity for an intern available.

“It’s a lot better than work for the dole,” Strong says.

“It’s voluntary [the internship]. You can’t force someone to do something they don’t want to do.

“The employer isn’t going to have to find something to do for four people they don’t want there. The people that will come in will want to be there.”

Reference: The government’s internships-for-cash scheme “wide open to abuse” says employment law expert, SmartCompany, 6^th May 2016