If you’re an employer wondering whether you need to pay a prospective employee for a trial shift (AKA a work trial, or a skills demonstration), you’re not alone.

Whilst it is quite commonplace to ask a potential new hire to complete a work trial to assess their skills, and how they fit in the role, it’s important to make sure you know whether that worker needs to be paid.

Key considerations

  • Unpaid trials can be legal when used in the right way, i.e. To demonstrate whether a person has the skills required and their suitability for a role
  • It is illegal for an unpaid trial shift to go longer than required to demonstrate the skills of the person.
  • Where an employment relationship is formed, the worker must be paid.
  • How to know if an employment relationship exists?

Lawful unpaid skills demonstrations

Typically, the only time a worker is not entitled to be paid for work performed is when there is no employment relationship between the worker and the business. So if you, as an employer, ask someone to undertake a trial shift or perform any work in order to be evaluated for a role in the business, it is important to know your obligations in terms of payment, and whether an employment relationship has been created.

A trial shift can legally be unpaid when it is needed to assess the suitability of a candidate for an available role. However there are specific criteria that must be met in order for this trial to be considered a genuine unpaid skills demonstration.

  • Firstly, a work trial cannot involve anything more than the person demonstrating the relevant skills required for the job.
  • Furthermore, the trial can only go as long as it takes for the worker to demonstrate those skills, meaning it could be an hour, up to one shift depending on the nature of the work.
  • Finally, the person must be under full, direct supervision of the potential employer (or another relevant person within the business) for the entire duration of the trail.

Unpaid work trials may be unlawful where:

  • It isn’t necessary to demonstrate the skills required for the job, or has continued for longer than is actually needed
  • It involves more than only a demonstration of the person’s skills, where they are directly relevant to a vacant position, or
  • The person is not under direct supervision for the entire duration of the trial.

Any time outside of what is needed for the person to demonstrate the relevant skills must be paid at the appropriate minimum rate of pay.

What constitutes an employment relationship?

There is no definition of “employment” under the Fair Work Act, but our view is that it could be argued that if a person completes a “trial” but the trial does not meet all of the above criteria, it could be implied that an employment relationship has been formed. This would mean that the worker is actually an employee with an entitlement to payment and the provisions of any applicable award.

Factors that are taken into consideration when determining whether an employment relationship exists include:

  • The nature and purpose of the arrangement. If the purpose of the arrangement is for the person to complete productive work for the business rather than solely assessing the skills of the person, it is likely that an employment relationship exists.
  • The length of the arrangement. The longer the trial goes for, the more likely an employment relationship is considered to be in place (even if it is less than one shift).
  • The significance of the arrangement to the business. The more essential the tasks being performed are to the operations of the business, e.g. where if the work was not performed by the person on trial it would need to be performed by paid employees, the more likely it is that an employment relationship may exist.

Example:

Theo applies for a part time job at a local café, that was advertised for Saturdays and Sundays from 7am-11am, with the key duties of making coffees and serving customers at the point of sale counter. During their interview Theo is advised that he will need to complete the first weekend as an unpaid work trial without supervision so the manager can determine whether he has the skills required to perform the role without supervision or hand-holding. The trial will involve continuously making coffees and serving customers, rather than having to do this once or twice.

Given the nature of the work being unsupervised and the duration of the shift not being limited to a demonstration of his coffee making skills, and customer service and cash handling skills, it is extremely likely that an employment relationship would exist here. As such Theo would be entitled to payment for all hours worked at the appropriate minimum rate.

What to do if you consider that you need someone to work longer than a trial shift to assess suitability?

An employee can be taken on a full-time or part-time basis and dismissed with one week’s notice due to unsuitability of the role. So long as they have been employed for less than 6 months (with businesses with 15 or more employees) or less than 12 months (for businesses with less than 15 employees), no formal process would need to be followed in order to dismiss.

Another option would be to initially engage them as a casual employee (so long as the employee was able to accept or decline shifts as they wished). In that way you could engage them for a small number of shifts for which they would be paid, but if they did not meet expectations you could simply not roster them further.

You could make it clear to the employee that if they did well in the casual shifts you would be likely to offer them a permanent position.

What next?

If you’re not sure whether you have been conducting your work trials correctly, don’t hesitate to reach out to our team today for advice.

Disclaimer

The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact HR Connect for advice.

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