University underpayments hit $218m impacting 110,000 workers
About $68m has been paid back to more than 49,000 tertiary employees in the last financial year.
Higher education institutions have been forced to backpay an extraordinary $218m to over 110,000 ripped off workers, with the University of Wollongong the latest to strike a deal with the workplace regulator, forking out $6.6m to 5340 staff underpaid over 10 years.
About $68m has been won back for more than 49000 employees in the last financial year, with the National Tertiary Education Union estimating the amount of underpayments has hit $278m, $60m higher than the official amount recovered by the Fair Work Ombudsman since 2019.
Most of the underpayments at the University of Wollongong involved the failure to pay casual professional staff for a minimum engagement period of at least three hours per shift and underpaying the penalty rates they were entitled for shift work.
The university also underpaid weekend penalty rates, public holiday pay, overtime rates, and various leave entitlements, as well as entitlements related to redundancy, severance and retirement.
The FWO said key causes of the widespread underpayments were the university’s poor governance processes and fundamental payroll system errors. Impacted staff included administration officers, IT officers, librarians to researchers.
“This is the latest disgraceful chapter in what has become a $278m national scandal affecting more than 100,000 university staff across Australia,” NTEU president Alison Barnes said.
“The wage theft epidemic has been the canary in the coal mine of the broader governance disaster we’re witnessing in our universities. It’s devastating that systematic wage theft has become embedded in universities’ business models.”
Since announcing in 2022 that addressing systemic non-compliance in the university sector was a priority, the FWO has entered into enforceable undertakings with La Trobe University, University of Sydney, University of Melbourne, the University of Technology Sydney, the University of Newcastle and Charles Sturt University and Griffith University; secured court penalties against the University of Melbourne; and commenced legal action against the University of NSW. About $128m has been paid back to 50,000 employees.
The University of Wollongong became aware of its underpayments after receiving queries from staff, and self-reported its non-compliance to the FWO in 2023.
FWO Anna Booth said the university deserved credit for acknowledging its breaches and the underlying issues, and committing significant time and resources to put in place corrective measures that would ensure full remediation of impacted staff and improved compliance.
“The matter serves as a warning of the significant long-running problems that can result from an employer failing to have appropriate checks and balances to ensure workplace compliance,” she said.
‘We expect universities to meet their legal obligations under their own enterprise agreements and underlying awards.”
Under the agreement, the university must make a $130,000 “contrition payment” and a second payment after the finalisation of two matters still under review.
While employers have often blamed underpayments on supposed complexity of the award system, Dr Barnes said the claims were “complete rubbish”.
“Every employer has one basic obligation: pay people properly for their work. I’m yet to hear of a single executive or vice-chancellor who has been held accountable for what should be sackable offences,” she said.
“We have unaccountable vice-chancellors pocketing million-dollar salaries while systematically fleecing academics and professional staff.”
The University of Wollongong apologised to affected staff, saying it accepted full responsibility for the underpayments. “We deeply regret the distress and inconvenience caused to our staff by these errors,” UOW Vice-President (Operations) Stephen Phillips said.
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