Unpaid Work Experience (Prohibition) Bill [HL]

Lord Flight Excerpts

2nd reading (Hansard): House of Lords
Friday 27th October 2017 Lords Chamber

[Lord Flight (Con)]

My Lords, I congratulate the noble Lord, Lord Holmes, on bringing this Bill forward and I very much hope that the Government will support it. Work experience internships are an extremely good idea in themselves, as the noble Baroness, Lady Brady, has just pointed out, helping people to go along the road towards employment; the problem is that, clearly, if they are not paid, only those who have parents who can afford it can take part. So it is socially divisive and unfair for internships not to be paid. Work experience lasting more than a four-week period obliges thereafter the payment of the minimum wage. I must say that I do not really agree with the four-week qualification period; that is still a problem. A lot of internships will be in London and the cost will in the order of £1,000 a month.

My experience, and I declare my interests as in the register, has been of providing internships at Metro Bank, where we pay the London rate from the first day people arrive and all the way through their internship. I am quite concerned that the four-week qualification period may get used to limit internships to a four-week period so as to avoid costs. Often, it is desirable for internships to be longer.

As noble Lords are aware, the legal background is that the National Minimum Wage Act 1998 did not specifically provide for work experience internships as they have developed substantially since then. Work experience does not usually meet the Act’s definition of work, where payment of the minimum wage is required. It is extremely constructive that this Bill provides a full definition of internship work experience as,

“observing, replicating, assisting with and carrying out any task with the aim of gaining experience of a particular workplace, organisation, industry or work-related activity”.

This is a far wider definition than one of just work, and it is necessary if the 1998 Act is to be effective in requiring payment for work experience.

Internship work experience has become a key part of young people getting a job, especially in the professions, quasi-professions and design territory; and as others have pointed out, there are some 70,000 work experience internships going on every year, around half of which are unpaid. Interestingly, around half the employers participating regard candidates without internship experience as having little or no chance of getting a job, so it has become a prerequisite for employment in many areas. Clearly, unpaid internships are socially divisive, as I have said, as the less well-off cannot afford them. Some 40% of those considering applying for an internship are put off by the costs, and 39% of those offered an internship turn it down because they cannot afford it.

The 1998 Act requires workers to be paid but, as I have just pointed out, an intern does not fit its definition of a worker. For an intern to count as a worker, the firm and the individual need obligations to each other. For example, if there is no obligation to turn up to work, you are not classified as a worker.

The Prime Minister, speaking recently at the launch of Good Work: The Taylor Review of Modern Working Practices, stated correctly that,

“employing unpaid interns as workers to avoid paying the National Minimum Wage is illegal”.

But I think that misses the whole point: the need is for interns to be paid, whether or not they do work or fit the definition of a worker.

It is time to treat internships and work experience as part of the formal labour market. Those doing them should be paid at least the minimum wage, preferably without a four-week qualification period. It is unlikely that this would reduce the number of internships. The YouGov poll pointed out that it would not affect the offering from about 72% of employers, or that they might even add to it. I trust that the Government will listen to my noble friend Lord Holmes and to this debate, and address an issue which is otherwise unwisely socially divisive.

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[Viscount Younger of Leckie]

I will write to the noble Lord about the specific figures relating to interns. I sought to make the point in general that in having the naming scheme, when the names go up on the board or when they are broadcast, particularly in local newspapers, it is damaging in itself. It is perceived as being more damaging and obviously can sully the reputation of employers in terms of both recruitment and the products that they are selling.

We also recognise that we have a responsibility to make sure—

[Lord Flight]

My Lords, I thank my noble friend. Can he clarify a point? Is he effectively saying that in the future interns will count as workers? The problem, as I understand it, is that of greyness in the area.

[Viscount Younger of Leckie]

That is true, and the point I am making is that the existing legislation does allow for a distinction to be made between who is defined as a worker and who is not. I have already made it clear that there are employers who try to get around this, a point which has been made by other noble Lords. However, the law is clear: if there is evidence to show that an individual can be defined as a worker in that work is being done that is not work experience, actions can be taken.

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[Viscount Younger of Leckie]

The description is that any complaint goes to HMRC and, if a complaint has been made, a distinction has to be made and HMRC has to take a view on whether meaningful work is being carried out—in other words, a nine-to-five day is being done, not just work experience where somebody is looking over somebody’s shoulder. That distinction has to be made. Again, I make the point that we could go down the route of having a new definition under the heading, “Work Experience”, but that would lead to all kinds of unintended consequences.

[Lord Flight]

I am sorry to bother noble Lords again. The fundamental issue seems to be whether the Government want interns to get paid. We all know what interns do. They are not workers because they are not on contract; but, if they are not paid, the problems we have all talked about arise.

[Viscount Younger of Leckie]

We are not taking a view on that. We are saying that there is no definition of work experience and it is left for others to decide whether the work is proper work that deserves remuneration or whether it comes under the description of somebody coming in for a couple of days and looking over somebody’s shoulder.