The six guidelines for internships in Ontario’s Employment Standards Act were applied in Girex Bancorp Inc. v. Hsieh. Nav Bhandal from the Labour and Employment Law Group at Keyson Mason Ball, LLP provides a good summary of the case.
“The employer hired two students to develop the company’s software. The students understood that this was an unpaid internship but nevertheless filed a complaint with the Ministry of Labour for unpaid wages at the end of their training term. The employer argued that the interns were not entitled to be paid because their training satisfied all of the above criteria. The Labour Relations Board disagreed and applied the six criteria as follows:
1. Similarity of training to that given in a vocational school – While the employer testified that everyday he “explained what the system was all about”, there was no evidence of any formal instruction, supervision, or evaluation provided to the interns.
2. The training is for the benefit of the individual – The training was found not to be for the interns’ benefit as it was not apparent that they received any benefit from their labours, aside from a letter of reference.
3. The person providing the training derives little benefit – The primary benefit was to be reaped by the employer, which needed the software program to be viable.
4. The interns do not displace existing employees – While it was true that the interns did not displace any employees, as the employees left the employer some time earlier, it was clear that the work that the interns had been hired to perform had initially been done by employees who were paid for their labours. However, when the money ran out, the employer turned to the interns to complete the necessary work.
5. The interns are not afforded a right to become employees after the internship is complete – The interns did not have a right to become employees. The employer advised them that they could possibly become employees, but it was not a guarantee.
6. The interns are advised that they will not be paid – The interns were advised that they were not going to be paid.
The Labour Relations Board concluded that only the latter two conditions were met. As a result, the interns were considered “employees” under the ESA and entitled to compensation. One intern was awarded $10,000 in unpaid wages and vacation pay, while the second intern was awarded $7,681.00.”