03/07/2017 3:51 PM AEST | Updated 03/07/2017 3:57 PM AEST

Labor Attacks Businesses Signed Up To PaTH Intern Plan

Bakers Delight, Coffee Club have been caught underpaying workers.

Prime Minister Malcolm Turnbull trumpeted a breakthrough for his government's controversial PaTH internship program on Monday, as he unveiled a plan for 10,000 retail interns, but the businesses onboard with the plan have come under fire over previous penalties for mistreating and underpaying workers.

The PaTH plan -- Prepare, Trial, Hire -- was announced in the 2016 budget, designed as a way to get young unemployed people into job training and work experience programs, with a view to getting them off welfare and into paid employment. The job skills training is compulsory, but participating in a internship is voluntary, and completing up to 25 hours a week gives "interns" an extra $200 on top of their existing welfare payments. Businesses that take on interns would also receive thousands in financial incentives.

Unions and workers groups slammed the idea, claiming it would lead to "churn" culture where businesses would stop employing casual or part-time employees who the business itself has to pay, and instead sign up to receive a revolving door of interns who the business not only does not pay, but actually gets paid to take on.

On Monday, Turnbull joined employment minister Michaelia Cash to announce the Australian Retailers Association would "partner" with the government to offer up to 10,000 internships through the PaTH program. News Corp reported that retailers including Battery World, Coffee Club, Bright Eyes and Bakers Delight will participate in the program, but opponents have seized on the recent history of some of those businesses.

"The employers that have signed up to the Youth Path program don't have a good track record treating their workers with respect," said Labor's shadow employment minister Brendan O'Connor and shadow minister for employment services Ed Husic.

"Bakers Delight apprentices, and assistants were reimbursed almost $40,000 after the Fair Work Ombudsman found they were being underpaid. A former Coffee Club franchisee in Brisbane was fined more than $180,000 in penalties for contraventions including an unlawful cash back payment."

The Coffee Club decision was announced on the government's own Fair Work Ombudsman website just two weeks ago.

"The Turnbull Government can't explain how the Youth PaTh program won't displace jobs that could go to full-paid employees. The Government has not outlined how its agreement with retailers will stop subsidised workers from being used by some retailers to avoid paying penalty rates -- by engaging subsidised, so-called 'interns' in penalty shifts that would normally be staffed by employees," Husic and O'Connor said.

On Monday, Minister Cash sought to assure potential interns that they would have a decent chance of getting a job at the end of their placement.

"These are new jobs and very much to be part of the program the employer has to certify that there is a job available or a high likelihood of a job available," she said.

"We have also been very, very clear, if at the end of the internship a job is not offered, there will be an investigation as to why."

Cash talked up the program by saying that, of the 212 internships that had so far been completed, 82 people had gained employment. Her office later told HuffPost Australia that 1235 internship vacancies had been advertised, 620 had commenced, and 408 of those were still ongoing.

Unions also came out strongly against Monday's PaTH announcement.

"Business is benefiting at the expense of workers. The rules need to change to stop the exploitation of young people," said ACTU President Ged Kearney.

"This program will do nothing for young people beyond churning them through short-term, dead-end placements. It will take away full wage paying positions, denying Australians of decent work, and will entrench the current situation of soaring profits and stagnating wages."

The Shop, Distributive and Allied Employees Association (SDA) also took aim.

"No one disagrees with the objective of giving young Australians a pathway into real work but this scheme runs the risk of being a road to nowhere," said SDA National Secretary Gerard Dwyer.

"Where are the industrial safeguards and proper monitoring systems to ensure taxpayers' money is being used to create real job opportunities and not just cheap temporary labour?"

"The PaTH internships provide employers with a pool of young low paid workers that retailers can use to replace part time and casual workers they would normally have to pay award rates."

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