Summer Placements: Essential internship agreement provisions

June 10, 2014

The summer has officially begun! Not only does this mean glorious sunshine (we hope) but it also means that sixth form and university students will be taking up internship positions in workplaces everywhere. The hrlaw team has therefore decided that now is a great time to remind you that we advise making all interns sign internship agreements and to let you know which provisions such agreements should contain, so here goes.

1.             Status

Beware of creating an employment relationship! It should be made clear in the agreement that there is no intention to create a contract of employment between the intern and the company at any point before or during the internship. This will ensure that the intern does not become entitled to any employment rights, which could, if breached, be costly for your company.

2.             The date and length of the Internship

The agreement should contain a start date and, normally, an end date. It should make clear that the internship will expire automatically on the end date without the need to provide notice.

There is no limit as to the length of internships, however, the government advises that between two to four weeks is an appropriate period for an unpaid internship. For internships in excess of four weeks, that are not truly voluntary in nature as they require interns to carry out specific tasks, the government advises that a fixed-term employment contract rather than an internship agreement should be used (meaning that an employment relationship will be created).

3.             Hours of attendance

These should be suggested, rather than compulsory. Obligatory working hours infer that the company might exercise a significant degree of control over its intern which in turn suggests that the intern could have employee status.

Usually the hours interns are asked to work will be equivalent to 9 a.m. to 5 p.m. or less, however if, for some reason, the intern is likely to be working hours that go beyond this (which we do not advise), you should include a provision opting-out of the Working Time Regulations which impose a maximum average of 48 hours’ work per week. 

4.             Expenses

In most cases interns will be neither workers nor employees and so will not be entitled to statutory rights, including the right to receive the national minimum wage. You may therefore wish to add in a provision allowing the intern to claim reasonable work-related out-of-pocket expenses (for example for travel and lunch) subject to the provision of satisfactory evidence in the form of receipts. We advise against an allowance as this could suggest it is income in return for work and therefore that the intern is a worker or an employee.

5.             Immigration permissions

Obtaining evidence of immigration permissions is a necessity in relation to employees or workers, but should, when following best practice, be done for interns too. Accordingly, the agreement should make any offers of an internship conditional on appropriate immigration status and you should check early on in the process which permissions may be required.

6.             Confidentiality

As interns will not normally be employees there will not necessarily be an implied duty of confidentiality. Confidentiality provisions in the internship agreement should be similar to those in ordinary contracts of employment. This will alert the intern to the fact that they cannot use or disclose such information, and ensures that your company’s sensitive commercial information is protected.

7.             Intellectual Property

Be aware that unlike employees, intellectual property rights created by interns will not automatically vest in your company. It is therefore advisable, particularly in certain industries such as fashion, that the internship agreement contains a provision which requires individuals to assign any intellectual property rights that they might create to the company during their internship.

8.             Data Protection

It is a given that the company will hold personal information on the intern. Although not strictly necessary, it is good practice to include a provision in the agreement stating that all personal information will be held and processed in accordance with the Data Protection Act 1998.

Follow the above guidance, and the summer internship period should hopefully be enjoyable and beneficial not only for the interns but also for your company.

The articles featured on foxwilliams.com were correct at the time of publication and should not be relied on or treated as a substitute for legal advice relevant to particular circumstances. Please contact us if you require legal assistance on any employment issues.


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