Irish Law on Unpaid Internships – Establishing an Employment Relationship

Introduction - Internships and the Law

A legal intern (Vladlena Soltan) recently brought a case against a law firm (Shannons Solicitors) alleging various infringements of her employment law rights. The claims brought against the law firm included a complaint seeking adjudication under Section 7 of the Terms of Employment (Information) Act, 1994 (TOEA), under Section 12 of the Minimum Notice and Terms of Employment Act, 1973 and Section 28(1) of the Organisation of Working Time Act, 1997 (Adjudication Ref. ADJ00030508). 

The case is a useful reference point on the laws relating to internships, in general, in Ireland. 

Background

Ms Soltan was self-represented at the Workplace Relations Commission. Ms Soltan alleged that no contract or employment or any written terms of conditions were provided to her. She was only provided with a verbal offer of employment. She was laid off due to covid 19 on 24 March 2020. Any efforts to return to work were unsuccessful. She was later informed that there was no further work for her and that her job was effectively terminated.

Ms Soltan alleged that there were no proper procedures with respect to the termination of her employment, no formal meetings to discuss the termination of her employment and no offer of appeal. In addition, holiday pay, both basic and public, was refused and wages for the moth of March, before she left the offices, were not paid.

The respondent law firm argued that there was no employment relationship. Shannons Solicitors argued that there was no contract of employment and terms and conditions of employment were never issued to Ms Soltan. They did concede that Ms Soltan was paid a small sum for her work in February and March, but this was more “in the nature of a stipend rather than a formal wage”. This amount was the amount the statutory legal limit required in respect of payment to an employee.

Ultimately, Shannon Solicitors argued that Ms Soltan was on a work experience placement despite no formal arrangements being in place for such a position.

Interestingly, the adjudication officer noted that, while it was unfortunate that all matters were only verbally discussed and that some confusion was inevitable, it was clear that Ms Soltan was on a work experience arrangement and did not have a regular job.

Ms Soltan appealed this decision to the Labour Court.

Appeal to the Labour Court

The Labour Court noted that the TOEA was an act to provide for the implementation of Directive No. 91/533/EEC of 14 October 1991of the Council of the European Communities on an Employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship.

In Von Colson & Kamann v Land Nordrhein – Westfalen [1984] ECR 1891 the CJEU has made it clear that where such a right is infringed, the judicial redress provided should not only compensate for economic loss sustained but must provide a real deterrent against future infractions. The Terms of Employment (Information) Act, 1994, is an act to provide for the implementation of a directive of the EU and consequently the jurisprudence of the CJEU has application in this case.

The TOEA at Section 7 (2)(d) in relevant part makes provision as follows:

7(2) A decision of an adjudication officer under section 41 of the Workplace Relations Act 2015 in relation to a complaint of a contravention of sections 3, 4, 5, 6 or 6C shall do one or more of the following, namely —

(d) in relation to a complaint of a contravention under change section 3, 4, 5, or 6, and without prejudice to any order made under paragraph (e) order the employer to pay to the employee compensation of such amount (if any) as the adjudication officer considers just and equitable having regard to all of the circumstances, but not exceeding 4 weeks’ remuneration in respect of the employee’s employment.

Internships and the Law - Defining a Contract of Employment 

Section 1 of the TOEA in relevant part defines certain terms as follows:

‘contract of employment ’ means —

(a) a contract of service or apprenticeship, or

(b) any other contract whereby an individual agrees with another person, who is carrying on the business of an employment agency within the meaning of either the Employment Agency Act 1971 or the Protection of Employees (Temporary Agency Work) Act 2012 and is acting in the course of that business, to do or perform personally any work or service for a third person (whether or not the third person is a party to the contract),

whether the contract is express or implied and if express, whether it is oral or in writing;

“employee” means a person who has entered into or works under (or, where the employment has ceased, entered into or worked under) a contract of employment and references, in relation to an employer, to an employee shall be construed as references to an employee employed by that employer; and for the purposes of this Act, a person holding office under, or in the service of, the State (including a member of the Garda Síochána or the Defence Forces) or otherwise as a civil servant, within the meaning of the Civil Service Regulation Act, 1956, shall be deemed to be an employee employed by the State or Government, as the case may be, and an officer or servant of a local authority for the purposes of the F3 [ Local Government Act 2001 (as amended by the Local Government Reform Act 2014) ], a harbour authority, a health board or F4 [ an education and training board ] shall be deemed to be an employee employed by the authority F4 [ or board ], as the case may be;

“employer”, in relation to an employee, means the person with whom the employee has entered into or for whom the employee works under (or, where the employment has ceased, entered into or worked under) a contract of employment subject to the qualification that the person who under a contract of employment referred to in paragraph (b) of the definition of “ contract of employment” is liable to pay the wages of the individual concerned in respect of the work or service concerned shall be deemed to be the individual’s employer;

Section 3 of the TOEA in relevant part provides as follows:

3.—(1) An employer shall, not later than 2 months after the commencement of an employee’s employment with the employer, give or cause to be given to the employee a statement in writing containing the following particulars of the terms of the employee’s employment, that is to say—

(c) the place of work or, where there is no fixed or main place of work, a statement specifying that the employee is required or permitted to work at various places,

(d) the title of the job or nature of the work for which the employee is employed,

(e) the date of commencement of the employee’s contract of employment,

(fa) a reference to any registered employment agreement or employment regulation order which applies to the employee and confirmation of where the employee may obtain a copy of such agreement or order,

(g) that the employee may, undersection 23of the National Minimum Wage Act, 2000, request from the employer a written statement of the employee ’ s average hourly rate of pay for any pay reference period as provided in that section, ]

(h) the length of the intervals between the times at which remuneration is paid, whether a week, a month or any other interval,

(i) any terms or conditions relating to hours of work (including overtime),

(j) any terms or conditions relating to paid leave (other than paid sick leave),

(k) any terms or conditions relating to—

(i) incapacity for work due to sickness or injury and paid sick leave, and

(ii) pensions and pension schemes,

(l) the period of notice which the employee is required to give and entitled to receive (whether by or under statute or under the terms of the employee’s contract of employment) to determine the employee’s contract of employment or, where this cannot be indicated when the information is given, the method for determining such periods of notice,

(m) a reference to any collective agreements which directly affect the terms and conditions of the employee’s employment including, where the employer is not a party to such agreements, particulars of the bodies or institutions by whom they were made.

(2) Each statement referred to in subsection (1) and (1A) shall be given to an employee notwithstanding that the employee’s employment ends before the end of the period within which the statement is required to be given.

(3) The particulars specified in paragraph (d) of subsection (1A) or paragraphs (h), (i), (j), (k) and (l) of the said subsection (1), may be given to the employee in the form of a reference to provisions of statutes or instruments made under statute or of any other laws or of any administrative provisions or collective agreements, governing those particulars which the employee has reasonable opportunities of reading during the course of the employee’s employment or which are reasonably accessible to the employee in some other way.

(4) A statement furnished by an employer under subsection (1) or (1A) shall be signed and dated by or on behalf of the employer.

Application of Law to Present Case

The Labour Court noted that the parties were agreed that no written statement, as required by the TOEA at Section 3(1)(a) was ever provided to Ms Soltan. 

It was noted by the Labour Court that it was common cause that Ms Soltan worked for 37.5 hours per week with Shannons Solicitors with effect from 10 February 2020. 

According to Ms Soltan, she was working under a contract of service following an offer of employment made to her by the principal of the firm in a phone call in late January 2020. The principal alleged he could not recollect the phone conversation. In any event, he stated in evidence that no offer of employment was ever made to her at any time at all.

There was no dispute between the parties that the appellant carried out tasks and duties which she alleged she had carried out on behalf of Shannons Solicitors with effect from 10 February 2020.

Conclusion

In all the circumstances, the Labour Court concluded that the amount of the payment made to Ms Soltan in February 2020 was not a coincidence. It was an exact calculation of the wages which would have been due to her arising from a salary of €20,000 per annum. In those circumstances, the Labour Court concluded that the payment was, as Ms Soltan alleged, a salary payment arising from a contract of employment within the meaning of the TOEA.

The Labour Court was fortified in this conclusion by the fact that the accountant for Shannons Solicitors made statutory deductions and payments appropriate to an employer and employee when calculating the payments to be paid to Ms Soltan in both February and March 2020.

For these reasons, the Labour Court concluded that Ms Soltan was engaged by Shannons Solicitors under contract of employment within the meaning of the TOEA.

In respect of this TOEA complaint alone, Ms Soltan was awarded €1,538.45.

The takeaway, is that it is inconceivable how an individual, undertaking work outside of any formal academic or training arrangements, could not but be construed an employee for the purposes of various employment legislation, most notably the Terms of Employment (Information) Act, 1994.