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The use of unpaid interns in the fashion industry is nothing new, but they have been very much in the spotlight in 2014. Earlier this year, a former intern at Alexander McQueen – backed by campaign group Intern Aware – brought a claim for over £6,000 in lost wages in respect of a four-month placement in 2009-10. The start of London Fashion Week was also marked by a demonstration by Intern Aware and students at King’s College London against the use of unpaid interns in the fashion industry.
Internships are, however, seen as an essential way of gaining necessary experience and skills and, for many, the only route via which they feel they can break into the fashion industry. Such is the demand for these positions, they are often offered on an unpaid basis – indeed, the TUC estimates that at least a third of interns in the UK are unpaid. It is no coincidence that the number and range of internships (or work experience placements) across many sectors in the UK increased considerably during the recent recession.
However, as long as individuals are willing to undertake unpaid internships, there will be organisations that are willing to exploit this “free” source of labour, and this has led to an increasing number of claims from interns who believe that the work they are being asked to undertake ought to be paid. If they are able to establish that they are, in fact, “employees” or “workers” in the eyes of the law, then they will be entitled to some or all of the statutory employment rights that exist in the UK, including the right to paid leave and to be paid at least the national minimum wage. There is no legal definition of internships or work experience, and therefore the legal status of interns will depend on the facts of each case. However, cases often boil down to whether interns are actually working under a contract (which may be oral or written, and express or implied) with some element of personal service and mutuality of obligation.
Based on the case law that exists, those organisations that wish to reduce the risk of creating a legally binding contract with interns are advised to avoid making payments to them that may be construed as wages (for example, payments to cover actual expenses should be clearly identified as such, and reimbursed against receipts) and to minimise or remove perks that could be seen as consideration. They should also reduce the obligations on the part of the intern, by giving them the ability to refuse tasks and decide when to work.
Of course, some organisations will see this as defeating the benefit of having interns and, mindful of the legal risks involved with using interns as they would otherwise prefer, will cease or reduce the number of internships on offer. This is, apparently, what Arcadia (parent company of Topshop and Miss Selfridge) has decided to do, having been forced by HMRC to retrospectively pay the national minimum wage to former interns who had worked for free.