There is no legal definition of an internship, nor is there a single internship programme. The UK Government’s Department of Business and Trade’s guidance defines an "internship" as a special type of work experience: 

"Work experience can be called a 'placement' or an 'internship'. Internships are sometimes understood to be positions requiring a higher level of qualification than other forms of work experience, and are associated with gaining experience for a professional career." 

The CIPD's guidance suggests the importance of a structured experience: 

"usually graduates or undergraduates who go through a selection process in a more formal structured programme. Students are often required to do internships as part of a further or higher education course.” 

An internship typically occurs during academic vacations or after an individual has completed their further education before entering a specific trade or profession. It should not be confused with work experience undertaken during school as part of the national curriculum or as a formal part of a further education qualification, such as a "sandwich" placement. 

Internships are increasingly common for career changers and those returning to work after a break. Internships can vary significantly in duration, structure, and whether they are paid or unpaid. The key defining feature is the focus on learning and development, rather than solely contributing to the business's output. 

The legal status of interns is important as it determines the extent of any statutory employment rights that they have against the organisations to which they provide their services. There are (broadly) three categories of protected individuals under employment law (employees, workers, and others covered by discrimination laws). If an intern is an employee, a worker or protected under the discrimination laws, the business must follow the statutory rules. If there is any doubt, the first question to address will be, is there a legally binding contractual relationship between the business and the intern? 

The legal status of volunteers and interns is subject to interpretation. Some will be purely voluntary, some will be clearly contractual, but some fall in between, which can be challenging to define. An increasing number of interns are asserting their right to the National Minimum Wage (NMW), making the distinction more significant. 

To help reduce the risks of ambiguity, a business can make sure: 

• payments to interns are clearly construed as expenses or wages 

• any other perks or benefits are either freebie gifts or valuable recognition for services 

• tasks are either optional or compulsory 

• wording used to describe the arrangement reflects its voluntary or contractual nature. Voluntary arrangements tend to use more flexible language (such as ‘usual’ and ‘suggested’). 

If there is good communication, all volunteers are treated clearly and fairly, and all businesses deal with complaints and grievances properly, then the likelihood of a dispute will be reduced. 

If an internship qualifies as "work" under NMW/NLW regulations, the intern must be paid at least the applicable rate. This generally applies if the intern is doing work that a regular employee would do, even if it's for training purposes. 

Genuine work experience placements that are part of a UK-based further or higher education course are exempt from NMW/NLW. Voluntary workers for charities, and those on certain government schemes, may also be exempt. 

The crucial question is whether the intern is a "worker." This depends on the specific circumstances and the nature of the relationship. If there's a "contract of service" (even if implied), the intern is likely a worker and entitled to NMW/NLW. 

As noted above, unpaid internships can be a grey area. They are more likely to be legally compliant if the intern is genuinely gaining work experience and learning, rather than being a substitute for a paid employee.  

Misclassification is potentially serious. The business could be obliged to pay up to six years of backdated NMW to workers, as well as civil and criminal penalties. 

The UK government’s guidance makes special reference to unpaid work trial periods. The longer the trial period (or test period or recruitment exercise) lasts, the more likely it will be that the business is, in reality, entering into a contract to provide work, and the NMW (or NLW) become payable. 

The government’s view is that in all but very exceptional circumstances, if a trial period lasts more than one day, then the arrangement will qualify as work. 

Determining the intern's employment status (worker, employee, or self-employed) is vital. This status also dictates their rights regarding working hours, holidays, sick pay, and protection against discrimination. 

Everyone has the right to a safe working environment, free from harassment and everyone qualifies as a data subject under UK GDPR and data protection rules. 

UK legislation gives an employer automatic ownership of copyright and other intellectual property rights in the works created by its employees in defined circumstances. IP rights created by non-employees will automatically be owned by the individual.  

The Equality and Human Rights Commission (EHRC) mentions in its guidance on volunteers that a business might be considered as providing volunteering or work experience services. If so, volunteers may be protected from discrimination, even though they are not employees or workers. 

It's advisable to have a written agreement outlining the terms of the internship, including the duration, responsibilities, pay (if applicable), and expectations. This helps to clarify the relationship and avoid misunderstandings. 

Have you seen a good model internship agreement? Let us know. 

The UK government has announced employment law reform, some aspects of which will, once brought into force, have a direct effect on internships: 

• A ban on unpaid internships. 

• Reforms to the national minium wage framework 

• The introduction of a single status of worker, with a framework that differentiates between workers and the genuinely self-employed.  

• The creation of a single enforcement body, the Fair Work Agency.