Unpaid Work Trials – What’s Legal?
Unpaid work trials often form an important part of businesses’ recruitment processes. They allow a company to test how a potential employee handles the pressures of a real working environment and ensures they have the required skills.
However, a growing number of businesses appear to be using unpaid trials for ulterior purposes, often in an exploitative manner. In this complete Employers’ Guide, we take a look at the legal status of unpaid trials and how the Government’s recent guidelines impact on their use.
The Issue with Unpaid Work Trials
In recent years, numerous reports have emerged of businesses utilising unpaid work trials as a form of free labour. The practice is widespread in many industries, the worst of which appear to be the hospitality, retail, and creative industries. Unite, the biggest union in the UK, has reported a six-fold increase in complaints relating to unpaid trial work over the last three years. They currently receive between 15 and 20 complaints a week concerning this specific practice.
Awareness of the issue has grown as more individuals find themselves having to go through unpaid trial shifts and the practice becomes more openly extreme and exploitative. In 2018, the supermarket chain Aldi advertised 150 unpaid trial shifts in order to prepare a new store for opening.(1) A café in Glasgow required applicants to complete 40 hours of unpaid trial work before they would be considered for the job. (2)
Faced with greater exposure to unpaid trials, general opinion seems to be crystallising. In a recent YouGov poll, 65% of UK citizens responded that they believe unpaid work trials are unfair.(3) 140,000 people signed a petition against the unpaid work practices of the aforementioned Glasgow café and calling for legislative action to protect easily exploited jobseekers(4). However, public opinion doesn’t form the basis of our legal system and tells us nothing about the legal reality of the situation.
The Law as it Stands
When it comes to the legislation governing unpaid trials, we find it severely lacking. It appears as though the practice exists in something of a grey area, with little policing of the issue taking place and no legal precedent to refer to. ACAS also take the view that the law surrounding unpaid work trials is remarkably unclear.
However, they do clarify their position by advising that it’s not illegal for businesses to utilise unpaid trial shifts – as long as they’re part of a genuine recruitment process and don’t constitute more than a few hours work.(5)
ACAS go on to argue that anyone working a full shift, or sometimes even multiple full shifts, should be paid the National Minimum Wage (NMW). In order to ensure this happens, they recommend discussing payment or expense terms before beginning any trial period. They also consider it necessary to agree upon the length of the trial period, what the procedures for informing the applicant of their job status will be, and to ask for some form of evidence of these agreements.
While this might be good advice in some contexts, it’s not always a realistic possibility. Some businesses may resent being asked to provide evidence, some employees may be too nervous to ask these questions, and many will feel that doing so affects their chances of receiving the job. Despite this, there are currently no legal assurances that job applicants will not be exploited by extended unpaid work trials, nor that any action will be taken if trial shifts last more than a few hours.
Best Practices for Businesses
In order to limit any possibility that their unpaid trial work doesn’t result in a legal challenge, businesses should ensure they do the following;
- Tell the applicant how long their trial period will last
- Detail the responsibilities the applicant will have to fulfil on the trial shift
- Ensure the applicant understands that the trial shift is unpaid
Current Relevant Legislation
Though there isn’t any legislation that directly targets unpaid trials, the most relevant legislation is the National Minimum Wage Act 1998.. It states that any person who performs work for a business or organisation of any sort is entitled to at least the minimum wage. However, it does allow for exceptions when it comes to an individual who is involved in a scheme for the ‘seeking or obtaining of work’ or that is ‘designed to provide training, work experience or temporary work.’(6)
Worryingly, the National Minimum Wage Act 1998 does not adequately define these exceptions. The ambiguity surrounding the definition of “work” and the exceptions to the NMW Act means that many of those on unpaid trial shifts are not recognised as working under a contract and, consequently, are not considered to be working at all. As they’re not technically working, they have no legal right to the NMW.
The legal grey area is also complicated by the reliance of ACAS on vague terminology. This includes phrases like ‘part of a genuine recruitment process.’ How do we define ‘genuine?’ What limitations are placed on a ‘genuine recruitment process?’ Are trial shifts a necessary part of a ‘genuine recruitment process?’ Such language lends itself to abuse and misuse, while also ensuring neither employers nor employees know precisely where they stand or what their rights and responsibilities are.
Unpaid Trial Work and Discrimination
In addition to the issues over entitlement to pay, there are other ways unpaid trial periods can cause trouble for employers.
For instance, legal problems may result if the same criteria aren’t applied to every applicant. These double standards manifest themselves most clearly when a business pays one applicant for a trial shift, but not another. Similarly, if a business asks one employee to work for an unpaid period of one week, but requires another to only complete a trial period of one day, the business could face claims of discrimination.
As a result, companies need to ensure that they’re asking all applicants to complete the same recruitment process to ensure that they don’t fall foul of discrimination law.
On top of ensuring that the recruitment process is the same for all applicants, businesses need to be aware of a number of other important considerations. While some of these may affect the legality of an unpaid arrangement, others are less likely to have an impact.
In some cases, businesses may offer to cover travel and other expenses during an unpaid work trial. If this is the case, they need to ensure they’re only paying out for officially claimed expenses and not just offering the applicant a flat rate for them. A flat rate payment for expenses suggests that the two parties have entered an employment relationship and may open up a business to charges of failing to pay minimum wage.
Likewise, businesses should be aware of what kind of work they’re asking applicants to carry out. While individuals on an unpaid work trial may often increase the workload of existing employees – by making mistakes that need rectifying or taking employees away from their usual work – they can also contribute a lot of value to a business. If an individual is perceived to be carrying out the same work as a paid employee, without being remunerated themselves, it will reflect badly on the business.
Changes to the Legal Status of Unpaid Trial Work
The latest attempt at altering the legal status of unpaid trial work occurred in early 2018. Introduced by the MP for South Glasgow, Stewart McDonald, the Unpaid Trial Work Periods (Prohibition) Bill attempted to legislate against unpaid trial work and make it illegal. Had it passed, the bill would have required businesses to pay prospective employees at least the minimum wage for any work performed during a trial shift.
The bill debate also raised important issues regarding the way unpaid trial work often exploits the most vulnerable in society. Many MPs voiced concerns about the way in which individuals with disabilities had found themselves taken advantage of by businesses offering unpaid trial shifts with no hope of a job offer at the end.
The private member’s bill had its second reading in the Houses of Parliament on the 16th March, 2018. Despite enjoying cross-party support, the bill was ‘talked out’ by the Conservative Minister for Small Business, Consumers, and Corporate Responsibility, Andrew Griffiths (7)
New Government Guidelines
A year on from the 2018 House of Commons vote on changing the legal status of unpaid trials, the government released new guidelines that impact on the practice. Packaged as part of the “Calculating the minimum wage” document (8), these non-binding guidelines were designed to assist both employees and employers determine when the National Minimum Wage (NMW) is applicable.
The document raised a number of important issues, including;
- Employers who do not pay the NMW should seek professional advice as to whether they are breaching employment law.
- All “workers” are entitled to the NMW. “An individual will generally be a “worker” if they have a contract of employment.” This contract may exist “even though there is nothing in writing.”
- The longer a trial shift lasts, “the more likely it is that it results in a contract to provide work and that the minimum wage becomes due.”
Perhaps most importantly, the guidelines also mention legal considerations. While there are still no clear rules or tests to determine whether the NMW is applicable to specific work trials, the government believes courts and tribunals will take the following factors into consideration.
- Whether a work trial is a genuine part of the recruitment process.
- Whether a work trial exceeds the amount of time reasonably required to assess a candidate’s ability. In most instance, any trial longer than a day will require the NMW to be paid.
- Whether the individual being trialled is observed on the trial.
- Whether the tasks performed by the individual are related to those they can be expected to perform on the job.
- Whether the tasks performed by the individual have a value to the employer beyond testing the individual.
Though these guidelines suggest that the government is clamping down on unpaid trial shifts, it is worth remembering that they are not legally binding.
The failure of the Houses of Parliament to pass legislation clearing up the grey area surrounding unpaid trial work, suggests that businesses will be able to continue utilising them as part of their recruitment process. Having talked out the Unpaid Trial Work Periods (Prohibition) Bill, Andrew Griffiths argued that he believed it was clear that no new regulation was required.
While the new government guidelines suggest that the practice is being tackled, the TUC has argued that they need to be backed by “strong enforcement” if they’re to have an impact. (9) In the House of Commons, there are concerns that the practice will not be halted while it continues to thrive in the lower house itself. Both Labour MP, Chi Onwurah, and SNP MP, David Linden, talked openly about the prevalence of unpaid internships in Parliament during a recent debate on the issue.
It is also worth noting that unpaid work trials form a part of one of the government’s Jobcentre Plus work schemes. Those looking for a job can join an unpaid work trial scheme that sees them work at a business for up to 30 days without being paid, but while still claiming their unemployment benefits.(10) That such a scheme is offered by a government-linked organisation suggests that unpaid trials are an accepted part of modern recruitment.
Though an extended work trial is not illegal, it can reflect very badly on a business if the practice is abused. Trial periods are often a good way to test the capabilities of a potential employee, but those trials that could be perceived as exploitative are facing an increasing backlash from the general public and certain parts of the legislature.
If a business believes it’s in their best interests to utilise trial shifts, they should try to ensure that they’re of a reasonable length and that there is the chance of a job at the end of the trial. If not, they run the risk of harming their reputation and potentially running into legal problems.
Editor’s Note: This post was originally published in May 2018 but has since been completely updated so it stays relevant, accurate and valuable to our readers.