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Understanding the difference between Unpaid and Paid work arrangements

Updated today

The terms volunteer, work experience, internship, work placement, and board member are often used interchangeably — but they have very different legal meanings and implications under Australian workplace and corporate law.

The following definitions are provided for general informational purposes only. If you are uncertain about how these definitions apply to your specific situation, it’s important to seek advice from the Fair Work Ombudsman or an appropriate legal professional.

Volunteer

A person who performs work or services of their own free will, typically for community, charitable, not-for-profit or sporting organisations, without expectation of remuneration, and without an employment relationship.

(Source: Fair Work Ombudsman)

Work Experience

A short-term placement or arrangement to gain exposure, skills or experience in an occupation or industry. If structured properly (e.g. as a vocational placement or part of training), this can be unpaid so long as no employment contract exists.

(Source: Fair Work Ombudsman)

Work Placement

A formal placement required as part of education or training (under a course or authorised by law). Under the Fair Work Act 2009, a vocational placement in a work placement context is not deemed to be employment.

(Source: Fair Work Commission)

Unpaid Internship

Unpaid internships are only lawful in limited circumstances — for example, when the internship is a vocational placement required by a course, or where no employment relationship exists.

Unpaid internships can be lawful unpaid arrangements if:

  • no employment relationship is established or implied as the outcome of the training arrangement, or

  • they qualify as vocational placements.

  • If the arrangement effectively amounts to employment, then employment law applies and the person must be paid.

(Source: Fair Work Commission)

Paid Internship

A structured on-the-job training arrangement where the intern is considered an employee and receives remuneration in accordance with Australian employment laws. Paid interns are entitled to the National Employment Standards and minimum pay rates under the Fair Work Act 2009.

(Source: Fair Work Ombudsman)

Board Member (Paid)

A person appointed to the board (director or officer) who receives remuneration or fees for performing board duties. Under the Corporations Act 2001 (Cth), they have statutory duties of care, diligence, and acting in the best interests of the organisation.

(Source: ASIC)

Board Member (Unpaid)

A board or committee member who serves without remuneration. Even if unpaid, they remain bound by the same statutory duties and obligations under corporate or association law.

(Sources: Corporations Act 2001; Panetta McGrath Lawyers)

Important Notes

  • The distinction between unpaid work and employment is not solely about payment. Even if unpaid, an arrangement can be considered employment if there is control, obligation, or expectation of productive work.

  • Vocational placements under authorised education or training programs are explicitly excluded from the definition of “employee” under the Fair Work Act 2009.

  • Board members — paid or unpaid — remain subject to statutory duties under the Corporations Act 2001 (Cth) or relevant association law.

  • If an intern performs work that is essentially the same as employees — especially if the arrangement is long-term, unsupervised, or involves productive tasks — regulators may treat them as employees. In this case, they must be paid wages and entitlements.

Disclaimer: This information is provided as general guidance only and is not legal advice. For specific advice regarding your situation, contact the Fair Work Ombudsman or seek independent legal advice.

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