University of Melbourne to pay 25,000 staff $72m after wage theft claims

The state’s leading university has been ordered to fork out a staggering $72m after it underpaid more than 25,000 staff members for a decade.

The University of Melbourne will fork out $72m to cover the underpayments of 25,000 staff. Picture: David Geraghty

The University of Melbourne will fork out a total of $72m to cover the underpayments of 25,000 staff, after investigations into wage theft claims found the institution had failed to properly pay employees over a 10-year period.

The state’s leading tertiary institution’s remediation program has identified 25,576 current and former staff were underpaid $54.05m between 2014 and 2024.

Individual underpayments ranged from less than one dollar to up to $150,881 — with six employees underpaid more than $100,000.

The university has already back-paid most staff entitlements, plus interest, superannuation and interest on super.

About $12.32m will be paid in interest, $4.62m in superannuation and $1.09m on interest on super – bringing the total payment to more than $72m.

More than 25,000 current and former University of Melbourne staff have been underpaid. Picture: Daniel Pockett

The University of Melbourne will also make a $600,000 contrition payment to the Commonwealth Consolidated Revenue Fund after it entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO) on Monday.

An EU is a legally binding agreement that the Office of Fair Trading can enter into with a business to stop it from doing certain activities that might breach the law or fix and change certain activities or documents to comply with the law.

Fair Work Ombudsman Anna Booth said this EU was the most comprehensive a university had ever entered and set an example for the sector on what it meant to turn practices around.

“The University of Melbourne now accepts that it was unlawful that for many years, its casual academics adhered to ‘benchmarks’ which were inadequate and resulted in some employees not being paid for all hours worked,” Ms Booth said.

“The University of Melbourne deserves credit for acknowledging its governance failures and noncompliance issues, and for committing significant time and resources to put in place corrective measures to ensure both full remediation of its staff and a transformation for the future.”

Ms Booth also said it was appropriate the university agreed to make a contrition payment, as it worked to implement a broad range of measures to prevent future noncompliance with workplace laws.

The FWO also announced it would discontinue legal action it commenced against the university in 2023 after it admitted to allegations involving underpaying and failing to keep records for 14 casual academics in its Faculty of Arts between 2017 and 2020.

The 14 academics that were the subject of the FWO 2023 legal action were among the workers who have been back-paid in full.

The university has acknowledged it has underpaid a range of entitlements owed under its Enterprise Agreements, including minimum wages, minimum engagement entitlements, casual sessional teaching and casual non-sessional activities rates, shift loadings and overtime entitlements.

The university will also make a $600,000 contrition payment to the Commonwealth Consolidated Revenue Fund. Picture: David Geraghty

Most underpayments relate to casual academic and professional staff across all faculties and campuses at the university, including failure to pay staff for many hours of marking, teaching and other associated academic work.

The University also underpaid some fixed-term and continuing academic and professional staff, and some trades and services employees.

University of Melbourne interim vice-chancellor, Professor Nicola Phillips said the university was pleased the FWO dismissed the prosecution brought against the university.

“The enforceable undertaking includes details on the university’s remediation program and corrective improvements undertaken since 2021,” she said.

“It also provides for a number of forward-facing commitments, including the university continuing its sector leadership role in employment compliance and improvements to systems and processes.”

Professor Phillips said the university was administering the final phases of its wage remediation program.

“Final payments are expected to be made in the first half of next year,” she said.

“The University again expresses its sincere regret and reiterates its apologies to affected staff members.”