October 12, 2011

Every jurisdiction in Canada has legislation that governs employment relationships. Generally speaking, individuals who are working pursuant to an internship program are exempt from those regulations. However, there is wide-spread confusion regarding who qualifies as an intern. Some charities and not-for-profit organizations may have individuals that are treated as interns but would not qualify under the applicable law. As a result, those organizations expose themselves to legal action and liability.

In Ontario and elsewhere, the employment standards legislation is designed to set out the rules and regulations for “employees”. True interns are not considered to be employees. The difficulty, however, is that there are not really any definitions of what constitutes an intern in the applicable legislation. A few months ago, several media outlets published stories about internships in Ontario, suggesting that some organizations were abusing the concept and, essentially, taking advantage of people by calling them “interns” and subverting the applicable employment standards legislation.

In response to this media coverage, the Ontario Ministry of Labour released a fact sheet titled “Internships in Ontario:  What you need to know”. According to this fact sheet, “employees” do not include “a trainee who is receiving training from an employer in the skills used by the employer’s employees,” if all of the conditions below are met:

  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 or 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 he or she spends in training.

The recent media coverage clearly suggests that organizations, including some charities and not-for-profits, were essentially using the concept of internships in order to obtain free labour. The requirement set out by the Ministry of Labour reinforces the notion that a true internship is designed to benefit the intern, and not the organization.

Organizations that run afoul of employment standards legislation face significant liability. This can include claims for wages for time worked, vacation pay, overtime pay, holiday pay, and, if the relationship is terminated, wrongful dismissal. The potential damages can be substantial, and the reality is that even if an organization successfully defends such a claim, doing so can be costly.

In order to protect themselves, organizations should review their practices and clearly delineate individuals that will be employees, interns, and volunteers. Although the latter two are not paid, it is beneficial to keep them separate.  Their roles are quite distinct, and this should not be difficult.

With respect to interns, it is important to have clear agreements and policies/procedures which set out the role of the intern, the nature of the relationship, and the expectations of the parties. By doing so, an organization can ensure that the intern does not simply become an unpaid employee. A lawyer that specializes in employment law can assist organizations in establishing such documentation and practices in order to minimize potential liability.


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