Melbourne pledges A$72 million back pay and ‘contrition payment’

Australia’s top-ranked university will make a “contrition payment” as part of its legally enforceable agreement to repay more than A$70 million (£35 million) to almost 26,000 current and former staff.

The “enforceable undertaking” negotiated with the Fair Work Ombudsman (FWO) requires the University of Melbourne to compensate staff for roughly A$54 million (£27 million) in underpayments and another A$18 million in forgone interest, superannuation and interest on superannuation.

The A$72 million back payment is the biggest so far in a sector riddled with “wage theft” scandals. All but A$4 million has already been repaid through a remediation programme initiated by Melbourne in late 2020.

The new agreement identifies 31 types of underpayments since early 2017. Casual academic staff were most affected, receiving about A$32 million less than their entitlements for marking, teaching, minimum callouts and other tasks. At the individual level, the underpayments ranged from less than a dollar to more than A$150,000.

The A$600,000 contrition payment was deemed “appropriate” by the ombudsman, Anna Booth, given the university’s “routine failure” to pay staff properly because of “systemic failures in compliance, oversight and governance processes”.

The document says Melbourne has also committed to wrapping its human resources, finance, payroll, rostering and time-recording mechanisms into a new “enterprise resource planning system” monitored by a centralised employment compliance directorate. Subcommittees of the university’s governing council and executive will have an “explicit focus on workplace relations compliance”, ensuring effective information flow from employees to executive and vice versa.

Melbourne has also admitted to underpaying 14 casual arts academics for sessional marking, and to failing to keep records of their work. The FWO has discontinued legal action pertaining to these academics, saying the university “deserves credit for acknowledging its governance failures”.

Ms Booth said the enforceable undertaking was an exemplar for universities and other large employers. “We look forward to working with the leadership teams at universities nationally to assist them to do the sustained, smart work required to ensure full compliance with workplace laws,” she said.

Melbourne’s interim vice-chancellor, Nicola Phillips, said the case dismissed by the FWO included allegations that the university had knowingly underpaid staff and tried to conceal this with false and misleading records. “The university again expresses its sincere regret and reiterates its apologies to affected staff members,” she said.

The university was separately fined A$75,000 for threatening not to re-employ two casual academics who had complained about being underpaid.

The National Tertiary Education Union (NTEU) said the enforceable agreement was the outcome of “years of tireless campaigning” to expose “systemic wage theft” in higher education. “It’s a testament to the casuals who have shone a spotlight on this issue across the sector,” said Victorian secretary Sarah Roberts.

The FWO has also signed enforceable undertakings with the University of Technology Sydney, the University of Newcastle and Charles Sturt University. It is also pursuing legal action against UNSW Sydney, which has set aside about A$71 million to meet historical underpayments, according to its 2023 financial statements.

Meanwhile, Monash University has faced the federal court over NTEU allegations that it has underpaid hundreds of casual staff by treating scheduled one-hour student consultations as part of the “associated work” covered by fixed payments for tutorials, rather than “other required academic activity” requiring extra payment. A judgment in the Monash case in expected in 2025.

john.ross@timeshighereducation.com