Melbourne University to backpay 25,000 staff over $72m wage theft

The University of Melbourne has apologised to 25,000 staff for underpayments spanning a decade, and been hit with a $600,000 fine.

The University of Melbourne is backpaying more than 25,000 staff for underpayments spanning a decade. Picture: Daniel Pockett/NewsWire

The University of Melbourne has apologised for $72m in wage theft from 25,576 employees over the past decade and paid a $600,000 fine, the Fair Work Ombudsman (FWO) said.

The sandstone university is back-paying staff $54m in lost wages, plus $12.3m in interest, $4.6m in superannuation and $1m in interest on superannuation – bringing the total cost above $72m.

The university will also pay a $600,000 “contrition payment’’ – the equivalent of a fine – to the Commonwealth Consolidated Revenue Fund.

Fair Work Ombudsman Anna Booth said the university had often paid its academics according to “benchmarks’’ – such as words-per-hour or time-per-student – rather than the actual hours they worked.

She said individual underpayments had ranged between $1 and $150,881 between 2014 and 2024.

Six employees were underpaid more than $100,000, with most underpaid less than $5000.

“Systemic failures in compliance, oversight and governance processes were key causes of the underpayments,’’ she said.

Ms Booth said the university had already back-paid the “large majority’’ of entitlements, and deserved credit for “acknowledging its governance failures and noncompliance issues’’.

Fair Work Ombudsman Anna Booth has warned of “systemic’’ wage theft in the university sector. Picture: Martin Ollman/NewsWire

The University of Melbourne has signed an enforceable undertaking with the FWO – the most comprehensive entered into by any Australian university.

In the undertaking, the university acknowledges that it had underpaid minimum wages, minimum engagement entitlements, casual teaching rates, shift loadings and overtime entitlements.

The University of Melbourne released a statement on Monday apologising for the wage theft.

“The university again expresses its sincere regret and reiterates its apologies to affected staff members,’’ University of Melbourne interim vice-chancellor, Professor Nicola Phillips, said.

“The university is pleased that the FWO has now dismissed the prosecution brought against the university, including the allegations that we knowingly underpaid staff and made and kept ‘false and misleading’ records.’’

University of Melbourne acting vice-chancellor, Professor Nicola Phillips, has apologised to staff for wage theft. Picture: Martin Ollman/NewsWire

The FWO enforceable undertaking relates to the university’s own review of payments and entitlements in 2020, which found that it had contravened the Fair Work Act.

The FWO took its own legal action against Melbourne University in 2023, alleging contraventions in respect of 14 casual academics in its Faculty of Arts between 2017 and 2020.

It has now discontinued that legal action after the university admitted to underpaying and failing to make and keep records for the 14 academics, as part of the wider enforceable undertaking.

The university has already backpaid those academics in full.

National Tertiary Education Union (NTEU) Victorian secretary Sarah Roberts said workers had been fighting for years to be paid properly.

“Melbourne University has earned the disgraceful title of Australia’s worst wage thief, denying more than 25,000 staff pay to the tune of $72m,’’ she said.

“After years of fighting for justice, we’re finally seeing concrete steps to end this systemic scourge.’’