Businesses always want to ensure the talent they are hiring are the best people for the roles they are filling. However, when undertaking the search for the best employee, are unpaid trial shifts legal? When inviting a candidate in for an unpaid trial shift, you should be careful that you are not in breach of employment laws. Some unpaid trial shifts are lawful, and others are not. This article will discuss when an unpaid trial shift is lawful and when it is in breach of employment laws.

Unpaid Trials to Demonstrate a Candidate’s Skills

A brief work trial can be legally unpaid if it is necessary to evaluate someone’s suitability for the job.

For example, you want to be confident your barista knows the difference between the Ethiopian and the Brazilian single origins. You want to see whether they can work well in a fast-paced environment.

You may invite the applicant to come in for an hour unpaid so that you can evaluate certain skills. The purpose of this arrangement is to determine the prospective employee’s suitability for the job. It can be legally unpaid if the:

  • trial involves no more than a demonstration of the person’s skills relevant to a vacant position;
  • trial is only for as long as needed to demonstrate the skills required for the job (this can vary from an hour to one shift); and
  • candidate is under direct supervision of the potential employer for the entire trial.

If the period exceeds this, you are required to pay the employee at the appropriate rate of remuneration.

For example, if someone responds to an ad for a barista position, and you require that he or she work three shifts unpaid, you may have to pay for this kind of “trial”.

This is because it begins to look more like an employment contract than an unpaid trial.

When Is an Employment Relationship Created?

An unpaid trial shift can be lawful if no employment relationship exists. Whether an employment agreement exists will depend on the circumstances. Indicators that an employment relationship has formed include the person:

  • moving beyond demonstrating skills necessary to complete productive work;
  • doing tasks that are not related to evaluating their skills; or
  • going to work in the place of an employee.

Does the Arrangement to Work Involve an Employment Contract?

An employment contract does not need to be in writing, and the contract can be verbal. For an employment agreement to arise, the parties must:

  • intend to create a legally binding arrangement (that is, the contract or agreement carries legal consequences if either party does not follow it);
  • commit to performing work for the benefit of the business; and
  • have a reciprocal relationship (that is, the person performing the work gets something in return (usually remuneration)).

The nature of the arrangement is what determines whether an unpaid trial shift has shifted into an employment agreement. What the parties call the arrangement is not relevant. Other relevant factors include the:

  • nature and purpose of the arrangement;
  • duration of the arrangement;
  • significance of the agreement to the business; and
  • person’s obligations.

If you want to assess a candidate’s suitability, you should consider employing that person as a casual employee or for a probationary period and paying them accordingly for all hours worked.

Key Takeaways

An unpaid trial shift may be lawful depending on the circumstances. However, the nature of the arrangement will determine whether the relationship is one of employment. If it is an employment relationship, you are required to pay the employee under employment law. If you have questions about unpaid trials when hiring candidates, get in touch with LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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