Former Melbourne Student Claiming $80k from NAB for “Sham” Vocational Placement

Former Melbourne university student, Daniel Stuart, has brought action against National Australia Bank (NAB) in the Federal Circuit Court for allegedly paying him below minimum wage during the 12 months he worked for the bank as part of a university placement initiative.

Stuart is seeking compensation totalling $80,833.83 for lost wages, super and rostered days off.

The law

Under the Fair Work Act 2009 (Cth) (FWA), vocational placements can lawfully be unpaid if they meet the following requirements:

1. The educational organisation must require the student to undertake the placement as part of their study.
2. There must be no entitlement to payment for the work performed. As such, placements covered by industrial awards or agreements are unlikely to be found to be true unpaid vocational placements.
3. The placement must be offered through an authorised educational institution.

If any of the abovementioned criteria are not satisfied, it’s unlawful for the internship to be unpaid.

Background

In late 2014, Stuart was successful in gaining a 12-month position as a “chance analyst” with NAB through Swinburne University’s Industry Based Learning (IBL) program.

According to Stuart, his role involved a number of duties, including managing the NAB intranet site, updating user guides, designing reports and other management activities. He claimed that NAB gave him a laptop, corporate email address, building access, ID card and authority to make certain purchases on behalf of the company.

Stuart was paid an allowance of $16.00 per hour, amounting to a total of $31,000.00 for the year. This money was “gifted” by NAB to Swinburne University, who then paid Stuart.

Stuart stated that the position with NAB was his first job and thus he didn’t know much about how jobs and internships worked. Around mid-year he began asking questions about super and pay but carried on working until the end of the year.

At the end of the year, Stuart was informed by his university that he would not receive any credit from the placement towards his studies.

Stuart’s position

In his arguments, Stuart points to his University’s repeated advertisements that the IBL program offered “practical experience and paid work”.

He also provided examples of other students that took part in the IBL program in other companies who received full wages as well as super and other entitlements.

Stuart stated that he struggled to live on such a low income and even had to borrow money from relatives for a medical procedure.

The statement of claim goes on to allege that NAB’s contracts attempt to unlawfully disguise employment relationships as vocational internships through unconscionable clauses stating interns are not employees and not entitled to pay.

NAB’s position

In its defence of the Stuart’s claim, NAB firmly asserted that it was not required to pay any students taking part in the IBL program.

The defence document states, “students are and will remain at all times students of the University and will not be deemed to be employees, apprentices, servants or contractors of NAB by reason of their participation in the IBL program”.

The defence goes on to assert that the “gift” to the university “does not constitute a payment to the University for any student placement”.

As students received a “pass or fail” outcome of the placement, the bank argued that this constitutes the program being a requirement of the degree.

NAB finished by asserting that Stuart had received a great deal of valuable training and professional development and therefore was not at any kind of loss.

Stuart is yet to file a reply to NAB’s defence; however, the matter has been set down for mediation next month.

Lessons

The age-old lesson here is to be very conscious when taking on students in unpaid vocational positions. If the relationship is later found to be one of employment and not vocational training, you could be liable to pay your intern the wages they would have otherwise earned. This could be a very pricy mistake.

There is a lesson here for interns too. While many students will leap at the opportunity for experience, paid or not, it’s worth knowing the rules that are in place to protect workplace rights. Allowing an employer to abuse your keenness for experience sets a trend for disregarding fair work laws.

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