Ripped-off university staff across nation backpaid $176m

Universities have been forced to backpay $176m to more than 80,000 ripped-off workers, with La Trobe the latest to strike a regulator deal. But the tertiary union says the wage theft could exceed $250m.

Fair Work Ombudsman Anna Booth says La Trobe University has shown ‘systemic failures’. Picture: NewsWire / Martin Ollman

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Universities across the nation have been forced to backpay $176m to more than 80,000 ripped-off workers, with Melbourne’s La Trobe University the latest tertiary institution to strike a deal with the workplace regulator, forking out $10.7m to 7600 underpaid staff.

But the level of underpayments is likely to be much higher, as the $176m reflects only the combined total resulting from agreements reached between the Fair Work Ombudsman and individual universities over a five-year period.

The National Tertiary Education Union said the confirmed level of “wage theft” across universities was more than 40 per cent higher, and exceeded $250m.

Declaring La Trobe had engaged in “systemic failures”, Fair Work Ombudsman Anna Booth said most of the underpayments of casual academics and professional staff at the university’s 10 schools, including its Sydney campus, related to marking work.

La Trobe often paid casual academics according to “benchmarks” such as words per hour, words per student or assessments per term, rather than the actual hours they had worked.

It also underpaid casual staff for lecturing, tutoring, and subject co-ordination work, and failed to keep accurate records of hours worked and pay rates.

“The matter serves as a warning of the significant problems that can result from an employer failing to have appropriate checks and balances to ensure workplace relations compliance,” Ms Booth said.

Part of La Trobe University’s main Bundoora campus. Most of the underpayments of casual academics and professional staff at the university’s 10 schools, including its Sydney campus, related to marking work, says the Fair Work Ombudsman.

A FWO spokesperson told The Australian on Thursday the workplace regulator had recovered over $176m for more than 80,000 employees in the university sector between July 2019 and December 2024.

But NTEU president Alison Barnes said that confirmed staff backpayments across universities had now exceeded $250m, with the “exorbitant and shocking wage theft” just one example of the “deep governance crisis that’s happening across Australian public universities”.

Ms Barnes told The Australian on Thursday the wage theft of casual staff was occurring while many university vice-chancellors were being paid annual remuneration packages in excess of $1m.

“The people who are subject to wage theft are the most vulnerable in our workforce, those who are employed casually. We have two-thirds of our sector not enjoying secure employment, being employed either casually or on fixed-term contracts”, she said.

“These problems of wage theft are not new to Australian public universities and it is shocking, to my mind, that they continue to be a feature of our workplaces. It’s a damning indictment of university management and their failure to pay their staff correctly.”

According to an enforceable undertaking struck between the FWO and La Trobe, the university underpaid 6774 current and former employees more than $9.3m for work performed between January 2015 and December 2022.

It is back-paying the employees in full plus $909,422 in superannuation and $556,061 in interest. A total of more than $10.08m in entitlements inclusive of superannuation and interest has already been backpaid.

Individual underpayments range up to $91,837, including superannuation and interest, with 35 employees underpaid more than $20,000 each, excluding superannuation and interest.

Under the enforceable undertaking, the university must make a $220,000 contrition payment to the commonwealth’s Consolidated Revenue Fund and implement a broad range of measures to ensure compliance with workplace laws going forward.

The FWO said the underpayments were caused by “systemic failures in compliance, central oversight and governance processes, with schools adopting differing payroll practices”.

La Trobe’s Bendigo campus at Flora Hill. Picture: Julieanne Strachan

La Trobe incorrectly applied its enterprise agreements, resulting in many casual employees not being paid for all hours worked and being underpaid minimum engagement period entitlements.

In a statement on Thursday, La Trobe said the issues relating to “unintentional” casual staff underpayments were identified by the university through an independent review it initiated in 2020 and self-reported to the FWO in early 2021.

“The university has communicated transparently with staff throughout this process. We have fully compensated all affected current staff and continue to proactively seek some former casual staff who have not yet responded,” it said.

“The underpayments were unintentional, resulting from complex industrial agreements, inefficient and outdated systems and processes. La Trobe has since improved and simplified these systems and processes to prevent future errors.

“While unintentional, the university recognises that underpayment of its highly valued casual staff is unacceptable, and we again sincerely apologise to all affected individuals.”

Since announcing in 2022 that addressing systemic noncompliance in the university sector was a top priority, the FWO has entered into five other enforceable undertakings, with the University of Sydney, University of Melbourne, University of Technology Sydney, University of Newcastle and Charles Sturt University; secured court penalties against the University of Melbourne; and commenced ongoing legal action against the University of NSW.