An investigation by the Labour Inspectorate has revealed that 60 students who did internships at airline Transavia should not be considered interns but employees. Transavia has been fined EUR 46,000 by the Labour Inspectorate for this and must retroactively pay the minimum wage and vacation allowance to the former interns. In our blog, you can read how the Labor Inspectorate reached this verdict and how you can prevent this as a company.
Intern or employment contract; the legal framework
Based on the law, an employment relationship exists when the elements of labor, wages and authority are present. The internship contract is not regulated by law, but it differs from the employment contract in the following two ways:
- An internship focuses on learning, rather than productive work for the benefit of the company.
- The intern does not receive a salary, but an internship allowance.
To assess whether there is an employment contract or an internship agreement, we look not only at the agreements on paper but also at the actual way they are carried out. In practice, it often goes wrong on the “labor” element. Interns often perform tasks at the organization where they intern as part of their learning process. But when do these tasks fall under the learning process and when can they be considered labor for the benefit of the company?
The Supreme Court has ruled that if the labor is primarily focused on the intern’s learning process itself, there is no performance to the employer and thus no employment contract is in place. But as soon as there is productive work primarily aimed at the company’s turnover or profit, the element of labor is present and there is in fact an employment contract. Case law shows that the following points are important in assessing this:
- Are learning objectives agreed upon?
- Does the intern perform work independently?
- Does the intern receive supervision?
- Does the intern carry out the same tasks as employees?
- Is the intern seen as an extra in the schedule? Or do people actually count on the intern?
Ultimately, it is a consideration of all the circumstances. Based on the factual situation, the judge may rule that there is an employment contract if he is not convinced that the learning objective is paramount, and the intern is actually contributing to the primary objective of the company.
The consequences of an employment agreement instead of an internship agreement
When an internship agreement qualifies as an employment contract, employment law applies. This has, among other things, the following consequences:
- Dismissal law applies. Therefore, the agreement cannot be without the consent of the employee, UWV of the court.
- A right to vacation days arises;
- Right to continued payment of wages during illness and reintegration obligations;
- The Minimum Wage Act applies;
- Statutory transitional allowance is due at end of contract; and
- A collective bargaining agreement may apply.
In addition, the Labor Inspectorate may impose a fine for violation of the Minimum Wage Act.
Transavia case
The Labor Inspectorate conducted an investigation into 60 students who did internships at Transavia in 2022. According to the Labor Inspection, these students were in fact full-fledged employees of Transavia. This is because the students performed the same work and had the same work schedule as the stewards and stewardesses working for Transavia.
As a result, Transavia was fined EUR 46,000. The reason for this fine is that the students were paid below the legal minimum wage. In addition, Transavia must also retroactively pay the correct salary including vacation allowance to the former interns. This amount comes out to about EUR 623,000.
The Labor Inspectorate has also spoken with educational institutions to emphasize that during students’ internships, the learning aspect must be the main focus. Employers should not use interns as full employees.
Practical tips
Prevent interns from being retrospectively considered as an employee, which could result in fines being imposed and retroactive wages can be claimed. It is important to focus on the learning aspect in the internship agreement. For this, we have the following tips:
- Formulate clear learning objectives for the internship and also evaluate them during and after, so that it is not just for form.
- Do not have the intern perform the same work independently as employees (colleagues), but under (some form of) supervision.
- Make sure the intern does not perform the same work at the same level as employees.
- When scheduling, keep in mind that an intern is only an addition. Do not schedule the intern in such a way that they become essential to the planning or schedule.
If you have any doubts about an internship agreement, contact one of our employment lawyers.