Australian Media Company Fined for Not Paying Interns
By MICHELLE INNISJAN. 29, 2015
SYDNEY, Australia — An Australian media company that did not pay its interns and breached the nation’s labor laws has been fined in federal court in a decision that will affect workers across Australia.
Crocmedia, a sports broadcaster based in Melbourne, was fined 24,000 Australian dollars, or about $18,900, on Thursday in the Federal Circuit Court of Australia, after Judge Grant Riethmuller found the company had exploited two young interns — one a student and the other recently graduated — who had been looking for work in the media industry.
One intern, Gemma Smith, 20 at the time, produced radio programs, starting her shifts at midnight and working until dawn for about six months. The other, Jonathan Wilkinson, then 23, worked similar hours over 15 months at Crocmedia, also producing radio programs. The two were together owed about 22,000 Australian dollars, or about $17,400, based on a minimum wage for casual shift workers of about 18 Australian dollars an hour.
In a statement, Judge Riethmuller said that Crocmedia had engaged in an arrangement to avoid its obligations. He said that Crocmedia had not intended to deliberately exploit the interns, but “the company cannot avoid the proposition that it is, at best, dishonorable to profit from the work of volunteers, and at worst exploitative.” The lawsuit was filed in June of 2013.
The ruling, closely watched by labor law academics and lawyers, is intended to send a strong message to employers that underpaying or not paying young workers could result in legal action and fines.
“It is groundbreaking because the regulator pursued the issue, and the company has been fined,” said Josh Bornstein, an employment lawyer with Maurice Blackburn Lawyers. “It sends a message that businesses should not cross that line.” The regulator, Australia’s Fair Work Ombudsman, which oversees workplace issues, took the case to court on behalf of Ms. Smith and Mr. Wilkinson.
Experts said the case would cause ripples throughout the work force. “This is a big development,” said Professor Andrew Stewart of the University of Adelaide’s law school.
He said that the judge could have imposed a penalty as high as $90,000 but that the company eventually had paid the interns in full and restructured its work force. “And because of this case, a number of other companies known to use unpaid interns” have undertaken not to do so in the future, Mr. Stewart said.
Mr. Stewart and Rosemary Owens, also a law professor at the University of Adelaide, prepared a report for the Fair Work Ombudsman in February 2013 that found the practice of using young people and not paying them was common in some industries.
Judge Riethmuller warned in his written judgment that future breaches would attract high fines. “There can be little doubt that the penalties are likely to increase significantly over time.”
In Australia, short, fully supervised unpaid work trials to test a job applicant’s skills are legal, as are college-backed, short-term student placements that allow the student to accrue course credits for a term of work.
But a benefit test that shows whether the intern or the employer gains the most from the work completed is one factor that determines whether a worker should be paid, and whether the employer is breaking the law.
Crocmedia’s marketing and communications manager, Leah Grant, was not available for comment. A lawyer for Crocmedia did not return calls.
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