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Risks Associated with Unpaid Work


Do you have anyone undertaking unpaid work experience on your construction sites? Or are you considering letting someone volunteer on your sites to gain some experience in the industry? Certain unpaid work experience arrangements are lawful, and others are not depending on the nature of the arrangements. Lines on whether an unpaid work experience arrangement is lawful or not can be blurred. Members are reminded that unpaid work arrangements may expose them to significant risks if they are not carefully considered.  Although a person may start on a genuine unpaid work arrangement, an employment relationship might be formed before the arrangement ends. Members should carefully consider prior to an unpaid work arrangement, as well as during the arrangement to determine if an employment relationship had been formed earlier.

My friend wants to do some unpaid volunteering work on my site to gain some experience in the industry, is it lawful?

The unpaid work is lawful if:

  • there is no employment relationship exists, or
  • the work experience is a vocational placement.

Whether there is an employment relationship depends on the nature of the arrangement, not how the parties descript the arrangement. When looking at whether an employment relationship exists, members should consider the following factors:

  • The nature and purpose of the arrangement – for an employment relationship not to be found, the person undertaking unpaid work must be receiving a meaningful learning experience and must not be doing productive work. If the person is doing work to assist with the ordinary operation of the business, it is likely to be an employment relationship.
  • The length of the arrangement – the longer the period of the arrangement, the more likely the person is an employee. Although even relatively short engagements can still be an employment relationship.
  • Expectation to work – there is unlikely an employment relationship if the role is primarily observational and the person is not expected to perform any work.
  • Benefit from the arrangement – the person undertaking unpaid work should mainly benefit from the arrangement. If the company is gaining a significant benefit from the person’s work, an employment relationship is more likely to exist.

Do I owe a WHS duty to a person undertaking unpaid work on my site?

Yes. Under the Work Health Safety legislation, a person conducting a business and undertaking (PCBU) has a primary duty to ensure the health and safety of workers and other persons in the workplace. The WHS legislation defines a worker as a person who carries out work in any capacity for a PCBU, including a student gaining work experience and a volunteer. This means a PCBU will be responsible for the injury of a person undertaking unpaid work experience if the injury caused by the PCBU fails to provide a safe workplace.

Is a person undertaking unpaid work covered by the Workers Compensation legislation?

People who undertake lawful unpaid work are not workers under the Workers Compensation Act 1951 (ACT) and will not be protected by workers’ compensation if they are injured on site.  If a person undertaking unpaid work is injured on your site, you may need to compensate the person out of your pocket if you don’t have any other insurance that covers the injury.

If you have any questions or need assistance in relation to insurance, please contact our Master Builders Insurance Brokers Team on 02 6175 5975.

If you need any assistance in relation to unpaid work, please reach out to our Workplace Relations and Legal Team on 02 6175 5900.