Is unpaid work unprotected work?

Jun 04, 2013

By Jeremy Warning

Unpaid workers featureIn recent weeks, Canadian media have been exploring issues around unpaid internships. Proponents see them as providing real-world experience, which can help unpaid interns kick-start their careers. Opponents question whether unpaid internships are helpful, fair, or even legal.

Here are three more questions worth considering: how does the Ontario Occupational Health and Safety Act apply to unpaid interns? Are these people workers? Regardless, what are best practices to protect them and your workplace?

This article contributes to the discussion by examining the legality of unpaid internships, how existing health and safety legislation indirectly applies to unpaid work, and the motivations for employers to ensure the health and safety of non-workers. For more on how to protect unpaid interns and other unpaid people in the workplace, and circumstances under which unpaid persons can qualify for compensation, see “Related Articles.”

What makes an unpaid internship legal

To have someone work without pay, a provincially regulated workplace must fulfill relatively strict legal requirements set out in Ontario’s Employment Standards Act, 2000 (ESA). If an unpaid internship doesn’t meet all of the requirements set out below, the intern would be considered an employee, and as such entitled to the applicable protections of the ESA, including the minimum wage:

  1. the training is similar to that which is given in a vocational school
  2. the training is for the benefit of the individual
  3. the person providing the training derives little, if any, benefit from the activity of the individual while he or she is being trained
  4. the individual does not displace employees of the person providing the training
  5. the individual is not accorded a right to become an employee of the person providing the training
  6. the individual is advised that he or she will receive no remuneration for the time that he or she spends in training.

An agreement between an employer and an unpaid intern that does not comply with these minimum standards is invalid — regardless of how freely the agreement was made — unless the deviation from the minimum standard provides a greater right or benefit to the employee.

This means that an unpaid internship cannot be created simply by agreement. Nor can it be created by designating someone or a position as an unpaid intern. The ESA limits the parties’ ability to make such agreements because unpaid work is intended to be an exception rather than a common circumstance.

In addition, the ESA does not apply to people who may be working as interns or in job placements associated with a cooperative education program. More specifically, and among other exceptions, the ESA does not apply to, and minimum wage is not required to be paid to,

  • a secondary school student who performs work under a work experience program authorized by the school board that operates the school in which the student is enrolled, or
  • someone who performs work under a program approved by a college of applied arts and technology or a university.

When paid and unpaid workers are covered under the OHSA

The answer may, on its face, appear to be a straightforward application of the OHSA (Occupational Health and Safety Act). However, the issue is not as simple or clear cut as it may initially appear.

First, some definitions. For the purposes of the OHSA, an “employer” is one who employs or contracts for the services of one or more “workers.” A “worker” is “a person who performs work or supplies services for monetary compensation.”

Consequently, the OHSA applies to all circumstances in which a person is performing work for monetary compensation regardless of the position the person holds with the employer. The corollary is that, for the purposes of the OHSA, someone who is working in an unpaid position is not a “worker” and the party they work for is not an “employer.”

On this basis, one might conclude that the OHSA does not apply to an unpaid intern. Well, it does and it doesn’t.

Case law: when the OHSA doesn’t apply to unpaid work

Two decisions exemplify that people performing unpaid work are not considered workers under the OHSA.

R. v. Frank Wilson Grandview Services Ltd., rendered by the Ontario Court of Justice in July 2000, involves a company operating a service station in Picton, ON. The company had arranged to have a new garage constructed. The service station would be closed during the construction of the new garage, and it was decided to hold a party after work, on the last day the service centre was open before construction began. As part of the festivities, employees would be permitted to bash parts of the old garage with a sledgehammer. When one employee struck an interior wall with the sledgehammer, the wall collapsed and injured him. The incident resulted in the company being charged under the OHSA. At trial, the company established that attendance at the party was voluntary and that no one at the party was being paid. Consequently, the court held that none of the employees at the party were “workers” at the time of the incident and the company was acquitted.

A similarly restrictive approach was taken in a civil case that began after the plaintiff was injured while performing unpaid work. The Ontario Court of Appeal did not disturb the finding of a trial court that the plaintiff was not a worker under the OHSA at the time that he had volunteered to help his brother-in-law paint an automotive showroom. The plaintiff, who sustained injuries in a fall from a scaffold, received a $100 gratuity after the incident but, prior to the incident, had no agreement to be paid and was found not do have done the work for monetary compensation (Hillis v. Boyko Rentals Ltd. (1988), 5 C.O.H.S.C. 48 (Ont. H.C.J.); affirmed 5 C.O.H.S.C. 64).

Notwithstanding these decisions, it should not be quickly assumed that there is no liability for unpaid workers under the OHSA. The Grandview Services case involved circumstances where there were no workers at the party. Similarly, Hillis v. Boyko Rentals Ltd. was a matter in which the only plaintiff was a person performing unpaid work.

For the purposes of the Occupational Health and Safety Act (OHSA), someone who is working in an unpaid position is not a ‘worker’ and the party they work for is not an ‘employer.’ On this basis, one might conclude that the OHSA does not apply to an unpaid intern. Well, it does and it dosesn’t.

Jeremy Warning, Heenan Blaikie LLP

Case law: when the OHSA does apply to unpaid work

If the unpaid work is being performed in a “workplace” as defined by the OHSA, the act may still apply, although indirectly.

Like the definition of employer in the OHSA, the definition of “workplace” references a “worker.” Specifically, the OHSA defines “workplace” as “any land, premises, location or thing at, upon, in or near which a worker works.”

A recent example in which OHSA liability has attached to incidents or contraventions that relate to unpaid work is the tragic case involving the Ottawa Catholic District School Board. In May 2011, a high school student was killed by an explosion. As part of a class project, the student had been cutting a steel barrel with a hand grinder. When a spark from the grinder ignited flammable vapours that had accumulated inside the barrel, it exploded.

The board was charged under the OHSA and in August 2012 pleaded guilty to a charge, under paragraph 25(2)(a) of the OHSA, for failing to provide information, instruction and supervision to the teacher concerning safe work practices and recognition of the hazards associated with the class project. In the circumstances of this case, the teacher was a worker, meaning the school was a workplace as defined by the OHSA. A $275,000 fine was imposed.

In situations such as this, unpaid interns may be indirectly protected under the OHSA where their unpaid work is performed near or with paid workers (i.e., in a workplace). But there are other means by which the health and safety of a person performing unpaid work may be protected, in the sense of being eligible for workers compensation: the Workplace Safety and Insurance Act (WSIA) may apply to the unpaid work.

If the WSIA does apply, it could provide an employer with a financial incentive to protect the intern’s health and safety because an injury could affect the experience rating of the principal or party who has placed the intern — depending on who has provided WSIA coverage to the intern.

If the WSIA does not apply, the motivation to protect the health and safety of the intern may be driven by the desire to avoid a civil claim by the intern or the intern’s family, or the fear of negative publicity. The Ministry of Labour’s practice is to issue a press release in any OHSA prosecution involving a fine of $50,000 or more. If the fine is less but the case is deemed to be of sufficient importance, the ministry may still issue a press release. These releases are often picked up by local media. Even without a press release, local media may cover the story, causing significant and potentially long-lasting damage to the employer’s reputation.

In summary

The OHSA does not apply directly to unpaid interns. However, they may be indirectly protected because the OHSA would continue to apply to the workplace or the work of any paid workers who may be working near or alongside the intern.

If your organization is thinking of employing unpaid interns, ensure

  • the internship complies with specific criteria under the ESA
  • the organization considers the legal risks associated with engaging the intern and implements the measures and procedures necessary to minimize those risks.

For suggestions on how to keep unpaid interns safe, see “Keeping unpaid workers safe.” For a discussion of how unpaid interns are addressed under the WSIA, see “When unpaid workers can qualify for workers compensation.”

Jeremy Warning is a partner in the Labour and Employment Law Group at Heenan Blaikie LLP in Toronto and a member of the firm’s National OHS and Workers’ Compensation practice group. Jeremy is a co-author of The Annotated Occupational Health and Safety Act, and is listed in The Best Lawyers in Canada as a leading Occupational Health and Safety lawyer. Contact Jeremy at 416-643-6946, jwarning@heenan.ca.

 

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