At times, an employer will want to ‘trial’ an employee to see what they are like as an employee. What are the pitfalls and how can they be avoided?
A recent case demonstrates an employee not paid properly on a trial will be subject to the same rules as a usual employee – that is, to receive pay, pay slips and other employee entitlements.
Two shop assistants were subjected to an unwarranted number of work trials by a New South Wales retail business, a Fair Work Ombudsman investigation recently found.
A junior employee undertook numerous work trials across 12 days and was paid the equivalent of just $3.30 an hour. The former Fancy Fruits retail shop at Thirroul, in the Illawarra region, paid the then 17-year-old just $80 for almost 25 hours’ work undertaken in May 2014. Another 21-year-old shop assistant was paid just $150 for seven work trials across 22 hours in September, 2013.
Why trial a new worker?
Work trials are used to gain an idea of an employee’s skill level, their quality of work and other indicators of suitability for employment.
An employee on a work trial can participate in useful work, but only so as to demonstrate their suitability for employment. There will be a range of timeframes that may appropriate, but the shortest time possible to make a decision on whether to employ an employee on a more structured basis (such as a probationary period) should be considered.
The former owners of Fancy Fruits, Mario and Mirna Tamer, admitted they often used unpaid trials as part of their recruitment process.
Mr Tamer told the Fair Work Ombudsman he usually gave shop assistants $20 per trial to cover their expenses, but was not aware he was required to pay wages. The workers raised concerns about underpayment with Mr Tamer, but he ignored their queries, advising them to ‘wait for a text message’ about their next shifts.
The Ombudsman commenced an investigation last September after receiving requests for assistance from the two shop assistants. The Ombudsman said the two former shop assistants had worked multiple shifts, performing work for which they had received only partial payment. Fair Work inspectors determined that the two employees should have been classified as employees and were entitled to receive the appropriate wages for the time they worked.
The Ombudsman also concluded the number and length of the unpaid trials were inappropriate for retail positions.
Under the General Retail Industry Award 2010, the two sales assistants should have received casual hourly rates ranging from $13.48 to $22.46.
As part of the investigation, inspectors conducted an audit of all Fancy Fruits employees to ensure they were being paid their correct entitlements.
The audit concluded three other shop assistants had been underpaid their casual loading by amounts ranging from $1.31 to $4.40 an hour. Collectively, the five shop assistants were underpaid a total of $4435 between September 2013 and October 2014. Individual underpayments ranged from $250 to $1552. Mr and Mrs Tamer also failed to keep appropriate employee records and issue payslips.
The Ombudsman said employers needed to be aware that they are at risk of breaching workplace laws if they use trials as a source of cheap labour.
There is nothing wrong with trialling a new employee to test their suitability, however, any period beyond what is reasonably required to demonstrate the skills needed must be paid at the appropriate rate of pay. In most circumstances, a trial should be limited to one or two hours on a single day. Additional hours are likely to be viewed as an employment relationship.
Enforceable Undertakings were introduced by legislation in 2009 and the Ombudsman has been using them to achieve outcomes against companies that breach workplace laws without the need for civil court proceedings.
Following discussions with the Fair Work Ombudsman, Fancy Fruits reimbursed all outstanding entitlements and signed an Enforceable Undertaking (EU). As part of the EU, the former employers agreed if they engage any employees in future, all reasonable steps will be taken to ensure they comply with relevant workplace laws.
They will complete all educational courses available to employers through the Fair Work Ombudsman’s website. The couple will also employ an external professional to do a retrospective audit of Fancy Fruits’ compliance with workplace laws and report back to the Fair Work Ombudsman.
Many of the initiatives included in undertakings help to build a greater understanding of workplace responsibilities, motivate the company to do the right thing and help them avoid the same mistakes again.
Perhaps the biggest pitfall is that an employee injured on a work “trial” will be subject to workers compensation laws. Depending upon the seriousness of the injury that could mean a significant cost in premiums and a responsibility to rehabilitate them back into the workplace.