By Nicole Precel
The Fair Work Ombudsman has blamed universities’ “entrenched non-compliance” with workplace agreements for the systemic underpayment of casual staff, and called for an overhaul of their corporate governance.
Deputy Fair Work Ombudsman Rachel Volzke lambasted the sector in its submission to the Australian Universities Accord Panel, a wide-ranging education review conducted by Professor Mary O’Kane AC, saying poor governance, inadequate payroll systems and decentralised human resource functions needed to be addressed to resolve the chronic problem of staff underpayments.
The Fair Work Ombudsman’s submission to the Australian Universities Accord Panel highlights issues with trends of staff underpayment.Credit: Erin Jonasson
The submission found there was failure to comply with the universities’ own enterprise provisions, including misclassifying duties or roles of casual academics, not having systems to identify compliance risks, low awareness among managers of new or changed obligations in new enterprise agreements and a lack of investment in payroll and time-recording systems.
It also said compliance issues were rife across disciplines and types of employment. Uncertainty about future work, especially among casual academics, led to a fear of raising issues directly, the Ombudsman said.
In 2020, the Ombudsman began to contact Australian universities to urge them to ensure they are compliant with workplace laws, and has since had contact with 27 of 42 institutions. It has opened investigations into several, launched two separate court proceedings against the University of Melbourne and made enforceable undertakings with Charles Sturt University and University of Newcastle. The University of Newcastle is back paying its staff $6.2 million and Charles Sturt completed back paying $4.69 million, including superannuation and interest.
Both self-reported underpayments to the Ombudsman, are ensuring that payments to affected workers are made quickly and are investing in systems and processes to ensure underpayments are not repeated.
According to the National Tertiary Education Union’s Wage Theft Report, released in February, higher education workers across Australia had been underpaid by $83.4 million over three years, which includes 34 separate incidents across 22 universities in which a dollar amount was disclosed. The University of Melbourne accounted for $31.6 million of claims from four separate incidents.
Academic Kate Clark has received a payout from the University of Melbourne.Credit: Penny Stephens/The Age
“We are seeing a pattern of repeated and often entrenched non-compliance, particularly in relation to casual staff with unpaid work (primarily unpaid time for marking, lecture attendance and tutorials/other student interactions), work (lectures, student consultations and marking) being incorrectly classified (and therefore incorrectly paid) under the applicable enterprise agreement and failure to pay correct entitlements being commonly identified,” the Ombudsman’s submission said.
The Australian Higher Education Industrial Association executive director Craig Laughton said universities had responded to the issue of underpayments and that there had been “significant improvements”. The association is working with the Ombudsman to put in place a series of guidelines to help the sector identify, fix and have ongoing monitoring of underpayment issues.
“There’s no vice-chancellor that I have spoken to that isn’t taking this on as a significant issue for the university. They don’t want to be underpaying anybody,” Laughton said.
“There’s a multitude of reasons as to why underpayments have occurred. And it’s simply not that universities try to profiteer off some of the less protected workers in the system.”
He said he would be staggered if underpayment risks weren’t on every university’s risk register now, that they were identifying underpayments, repaying staff and improving systems and processes to avoid future issues.
He blamed “very complex” enterprise agreements for some confusion with underpayments, and said basic definitions needed to be clear and modernised so “you don’t need a PhD” to interpret payments.
“There’s no silver bullet here,” he said.
NTEU national president Dr Alison Barnes.
National Tertiary Education Union national president Alison Barnes said underpayment was a symptom of insecure work, which was rife in the sector and damaging not only to individuals without secure employment, but to students also.
“We’ve also campaigned for many years about issues like governance. The universities are increasingly run like private sector organisations as opposed to public sector organisations that should operate in the public good,” Barnes said.
“They’ve had ample time to fix their payroll systems. It shouldn’t take five years... 10 years to fix payroll systems, so it’s absolutely appalling.”
Barnes said it was “ridiculous” to say enterprise agreements were too complicated, as they were agreed upon by both management and unions and university management should train staff about how their enterprise agreements work.
A University of Melbourne spokesperson said the vice-chancellor had formally apologised for underpayments and re-affirmed the university’s determination to ensure it wasn’t repeated. It has worked to remediate current and past staff relating to entitlements under the 2013 and 2018 enterprises agreements. It also introduced systems and payroll improvements, extra compulsory training for casual and managers and new roles to support engagement and management of casual staff.
A University of Newcastle spokesperson said the Ombudsman acknowledged their cooperation and early and open disclosures and commitment to establish and implement systems and processes -including training and education, policies and procedures - to avoid similar issues in the future. “Staff must be paid correctly,” she said.
“Existing Enterprise Agreements are highly complex across the university sector and simplification will help staff to understand their entitlements and will help universities ensure correct payment.”
The Australian Universities Accord Panel will report to the Minister for Education with an interim report on priority actions in June. The final report is due by December 2023.
Liam Mannix’s Examine newsletter explains and analyses science with a rigorous focus on the evidence. Sign up to get it each week.