Harrods writes cheque for £1,800 after intern worked unpaid for three months

London department store said misclassification of marketing graduate was isolated incident due to line manager mixup

The luxury department store Harrods has given nearly £2,000 to an intern after she worked unpaid for three months due to being ‘misclassified’ as a volunteer.

The world-renowned London store, which last year made a pre-tax profit of just over £125m, told the Guardian it was comprehensively reviewing the unpaid internship scheme that operates at its flagship Knightsbridge property.

In a letter to the 21-year-old graduate – who wished to remain anonymous – Harrods apologised for misclassifying her as a volunteer and admitted she should have been paid for the work she was doing in the store’s marketing department. The intern was subsequently sent a cheque for £1,802.72 for 276 hours’ work at the minimum wage.

Harrods was sold by Mohammed Al Fayed in 2010 to an investment trust of the Qatari royal family for a reported £1.5bn. It has substantially increased profits in the last two years, bucking recessionary trends in retail.

The University of Westminster marketing graduate told the Guardian she worked at Harrods for just over three months this summer, helping the store to prepare for the opening of its Toy Kingdom.

She said interns were brought into the company on a rolling basis to help with regular tasks. Though grateful for the experience, the marketing graduate said she became increasingly frustrated when two weeks’ worth of travel expenses, which Harrods said it would reimburse, were left outstanding.

“I wasn’t getting a response [from Harrods] so I went online to see if any other interns were having the same problem. It wasn’t until then that I saw [that] as an intern I’m meant to be being paid,” she said.

In 2010, government ministers received legal advice warning them that unpaid internships had become “endemic” and that under national minimum wage (NMW) law, they were “likely to be workers and therefore entitled to the NMW and other worker rights”.

Following two landmark cases in employment tribunals that found in favour of unpaid interns, a series of companies – including Arcadia, which runs Miss Selfridge – have paid thousands to interns.

Speaking after her payout, the graduate, from Ealing, west London said: “Harrods is a well-established company. They’re making enough money to give interns the minimum wage.”

“A lot of interns are doing [this] for experience and they’ve realised that you should … and can be paid.”

Intern Aware said its campaign in conjunction with the careers advice website Graduate Fog to get interns a wage under NMW laws had won back more than £10,000 since the start of the year.

Gus Baker, co-director of Intern Aware, said: “We were delighted to get an intern’s money back from Harrods. Thousands of young people can’t work for free. Companies need to abide by minimum wage laws to give talented graduate a chance.”

A spokesman for Harrods said: “Harrods can confirm there was an isolated incident involving one intern whose job specifications were altered after their line manager had moved internally within the business.

“Having acknowledged the change in job responsibilities it was agreed the individual was classed as a ‘worker’ rather than intern, therefore the decision was made to offer full back-pay for the time they had spent within the business.

“A comprehensive review of our internship policy had commenced before this intern had joined the company, and we are still in the process of this review.”

• This article was amended on December 18 2012. The original said Intern Aware’s campaign was in conjunction with the National Union of Students. This has been corrected

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