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Some companies do not pay their interns, but is this an ethical practice? Darren Boon.

Report: Unpaid internships — exploitation of free labour?

Darren Boon / Reporting Head

A win-win situation in this worsening economic climate: companies reduce labour costs by hiring unsalaried interns while these intern hopefuls seeking industry experience learn the trade and may actually get their big break.

MAX (not his real name), a tertiary student in his early twenties, has been on an unpaid industrial attachment over the last few weeks.

But he does not have a choice, as the deadline to apply for the industrial internship had been looming. He works between 8 to 10 hours daily for a small firm in the creative industry.

(Photo: Are interns exploited at the office? Courtesy of Bryan Fenstermacher.)

“I actually requested for [reimbursement of] expenses but was denied. I am currently not paid for any transport, which is killing me,” Max said.

However Max is still thankful for this chance to build up his portfolio in the creative industry: “Although I am working for free, the company actually exposed me to various opportunities and the chance to really see what the industry is really like.”

“But opportunities don’t translate into money…money is required for survival,” Max said.

Like Max, 22-year-old student Derrick Tan does not mind an unpaid internship as long it opens up future job and industrial opportunities for him.

Asia City Publishing, an intra-Asian publishing company had put out a recruitment notice for interns in the May 22 edition of I-S Magazine, a free pick-up weekly publication.

(Photo: the advertisement in the magazine. Courtesy of Darren Boon.)

Note the disclaimer on the advertisements: “This is an unsalaried position; expenses will be covered”.

This reporter attended an interview for the position of editorial intern on Thursday, June 4 and took the opportunity to quiz the interviewer, a senior writer with the company on the reimbursement of expenses.

The interviewer said that while the company will reimburse for all expenses incurred by the intern on company businesses or jobs, there was no indication during the interview that the company will pay for commuting expenses to-and-fro from the intern’s home and company.

When asked over the phone last Tuesday on whether the commuting expenses of the intern will be compensated, the interviewer said: “I don’t think so.”

The intern needs to be present in the office for a minimum of four days a week from 10am to 530pm – five when the workload gets heavy – for a minimum of two to three months to “get the best out of the internship”.

While Asia City Publishing does not pay its interns, there are other internship positions advertised on The Straits Times classifieds section on Friday June 5 that offer a monthly stipend of $300 or more.

Asia City Publishing has yet to reply to The Online Citizen's queries on the company’s position on unpaid internships.

Looking at the legal and ethical aspects of unpaid internships

The Online Citizen spoke to Mr Eugene Tan, Assistant Professor of Law, Singapore Management University, who specialises in business ethics and corporate social responsibility, regarding unpaid internships.

Mr Tan said an unpaid internship arrangement cannot be faulted on legal grounds if both the employer and the intern agree to the terms of the agreement.

Although he acknowledged that the “bargaining power of both parties are unequal”, the prospective intern can always refuse the internship on the outset if he or she is not happy with the terms offered by the employer.

Thus, Mr Tan advised prospective interns to scrutinise the offers cautiously and weigh the benefits of the training received and the potential for future employment against the drawbacks for having no stipend, for example.

He went on to explain that a grey area exists in whether a stipend or gratuity should be provided and in what should be the minimum sum for reimbursement.

“Companies need not necessarily be behaving unethically if no stipend or allowance is provided to the interns. Companies would argue that they are providing interns with training and career preparation at no costs to the interns,” he said.

However, Mr Tan encourages companies not to view interns as “free or cheap labour” but to provide the best training and exposure for the interns as a means of attracting and retaining talent.

He added that interns should not expect reimbursement for daily transport expenses incurred for the to-and-fro commute between home and office as employees are not reimbursed for that. However, he personally feels that it is out of goodwill that interns be given a general allowance.

A learning experience for students

Singapore Management University (SMU) requires all undergraduates to fulfil a minimum 10-week long internship at a business organisation before graduation which can be completed in Singapore or overseas.

A spokesperson from SMU told The Online Citizen that the internships provide a structured learning experience and allow students to gain experience in real word assignments beyond their learning experience in the classroom to obtain optimal career-related experience.

While the host company usually provides a stipend to the intern, SMU is open to unpaid internships and will evaluate them with the host organisation on a case-by-case basis.

The spokesperson said: “Students are encouraged to evaluate internship opportunities based on the challenge and value provided by the company, beyond just the stipend alone.”

While the spokesperson acknowledged that the stipend is one of the incentives which attract students, the job challenge, training, office environment and culture are also pull factors.

While SMU provides career counsellors to assist and guide students on their internship experience, students need to research and apply for positions which align with their skills, knowledge and career aspirations.

But for Max now, all he hopes to do is to earn some money. “I am seriously eating wind. With so much debt to clear, I am constantly depressed,” he said.

He added: “The underlying point is I feel that if I am creating revenue for the company, I should be at least be reimbursed for transport”