The Labour Courts of the city of Buenos Aires, in the case “FERRARI LUIS ENRIQUE C/OBRA SOCIAL DEL PERSONAL DE DIRECCION DE PERFUMERIA E. W. HOPE S/ DESPIDO” ruled that a student who carried out administrative tasks at the collections department of the defendant, is not an intern, and should be considered an employee of the defendant.
The Labour Court considered that the defendant failed to comply with the legal requirements for an internship relationship to exist between the parties.
In this particular case, the Labour Court ruled that there was no educational purpose in the relationship between the parties, because the tasks performed by the plaintiff had no relation to his public accountant college studies. The Court ruled that the goal of the internship is that the student carries out a practice related to his/her studies.
Additionally, the Labour Court also considered that there was no tutor appointed to guide the student during his/her internship and the university/educational centre must also organise the internship and supervise and evaluate the intern, periodically, as provided by local laws.
Therefore, the Labour Court ruled that an unregistered labour relationship existed between the parties and ordered the defendant to pay severance compensation, labour fines in favour of the employee and salary differences, plus interest and legal fees.
As of today, internships are ruled by Law 26,427, which provides:
- An internship has a minimum term of 2 months and a maximum term of 12 months, which can be extended 6 additional months.
- Work schedule cannot exceed 20 (daytime) hours weekly, from Monday to Friday.
- The company must execute an agreement with an authorised university or other education centre implementing an internship program and must choose a student from that university or educational centre.
- Company, student and university or education center must execute an internship agreement.
- The internship agreement must include, among other things: (i) a specific internship plan for the student, agreed between the company and the university or education centre, (ii) payment of an incentive to the student by the company; (iii) work schedule and workplace; (iv) services to be provided by the student; and (v) name of the tutor appointed by the company and teacher appointed by the university or education centre.
- Company must pay an incentive to the student (that shall not be less than the proportional basic salary of the applicable collective bargain agreement or, in case no collective bargain agreement is applicable, the legal minimum wage). Payment is determined in proportion to the actual work schedule of the student.
- The services to be provided by the student shall be related to his/her studies.
- Company must appoint a tutor who shall guide the student during his/her internship and must evaluate, periodically, the intern and submit such evaluation to the university or education centre, periodically ,as well as 30 days after termination of the internship .
- The company must register the internship agreement before the social security authorities.
- The company must provide intern with labour risk insurance and mandatory medical coverage.
- Internship agreements shall not be used to replace former employees or employees under leave of absence.
- A company can only hire 1 intern per 10 employees of the company.
According to Section 12 of Law 26,427, if the company meets all requirements set forth by Law 26,427, no labour relationship will be deemed to exist between the company and the intern. On the other hand, according to Section 19 of Law 26,427, if the company fails to comply with these requirements, an unregistered labour relationship will be deemed to exist between the company and the student, triggering labour contingencies (payment of severance and labour fines in favor of the student) plus social security contingencies (payment of social security contributions).