When is an internship agreement an employment contract?
Many companies use interns, supplying an opportunity to gain practical experience. These interns are employed based on an internship contract. Because an internship contract usually contains the same elements as an employment contract (work, authority and pay), there is a risk that an internship contract will (also) be qualified as an employment contract, with all the consequences that go with it. How significant is this risk? The court in The Hague recently ruled on this in two cases.
In 2015 (ECLI:NL:HR:2015:3019), the Supreme Court indicated in the matter of HR/Logidex that internship contracts often show characteristics of an employment contract. This is because an intern can often only gain the necessary experience by performing work that is comparable to the work of an ordinary employee. Therefore, according to the Supreme Court, depending on the circumstances of the case, there may be an employment contract in addition to the internship agreement. In assessing whether there is (also) an employment agreement, the Supreme Court stated as a criterion that it must be considered to what extent the work of the intern is aimed at expanding the intern’s own knowledge and experience, also with a view to completing his/her education. If the focus of the work is on expanding that knowledge and experience, there is no employment agreement. The intention of the parties when entering into the agreement also plays a role in this.
The criterion set out above can be seen in the following recent judgments of the District Court of The Hague.
Court The Hague, 5 April 2022, ECLI:NL:RBDHA:2022:3339
This case involved an intern at the SPWO foundation. The intern was employed by this foundation based on an internship agreement. The internship agreement stipulated that it was not an employment contract and that it concerned a work experience internship. In addition, a separate agreement between the intern, the foundation and the university’s student advisor stated that the foundation would give the intern the opportunity to do an internship as part of his/her education.
The intern claimed that an employment contract had existed between the parties and claimed wages (based on the wages that were customary for the work he had performed) plus statutory interest. In the alternative, the intern claimed the difference between the internship fee he had received and the statutory minimum wage.
The court applied the criterion from HR Logidex and considered that the work performed by the trainee was unmistakably in the context of his training at the university. This was clear, inter alia, from the agreement that the parties had entered into with each other. According to the court, the work was primarily in the interest of the education followed. In short: the trainee agreement was not regarded as an employment contract.
Court The Hague, 14 April 2022, ECLI:NL:RBDHA:2022:4119
The District Court of The Hague reached a different opinion in the following case. This case concerned an intern who, as part of a training course for dental assistants, started working for a dental practice based on a fixed-term internship contract. This agreement was renewed once orally. The dental practice subsequently indicated that this agreement would end by operation of law and that no employment contract would be entered into with the intern.
The intern claimed, inter alia, that the termination of the ’employment contract’ should be annulled, that the intern should be admitted to the work floor, that the salary should continue to be paid and that arrears of salary should be paid.
The court again followed the criterion as formulated in HR Logidex. The Subdistrict Court assessed whether the work was performed predominantly in the interest of the intern’s education, or whether the focus of the work was on contributing to the dental practice and its objectives. The court considered that the intern performed work independently, such as counter work and cleaning activities, and it was clear from communications between the parties that the dental practice counted on the intern to perform the daily work. In addition, the intern replaced other assistants in their absence. The intern was not just an apprentice and there was no structural form of supervision by the dental practice. Therefore, it could not be said that the work was performed predominantly in the interest of the intern’s education. The court therefore concluded that an employment contract had been established between the parties. As a result, the dental practice had to pay back-wages, as well as a transitional allowance and compensation for the unlawful termination of the employment contract. In addition, the dental practice had to pay the statutory contributions for, amongst others, WW (unemployment insurance), WIA and WAO (incapacity insurance) from the beginning until the end of the employment.
Whether an internship agreement can also be regarded as an employment agreement and therefore, for example, (more) salary must be paid afterwards and the strict rules for terminating such an agreement apply, depends strongly on the circumstances of the case. In the above-mentioned cases, we find some circumstances that play a role in this.
Do you have any questions about internship agreements? Please do not hesitate to contact us.