Australia’s top university in court for alleged underpayments and false records

It is alleged that total underpayments of the 14 staff were $154,424, and ranged from $927 to $30,140 for individuals.

The Fair Work Ombudsman has commenced legal action against The University of Melbourne, alleging it underpaid casual staff in the Faculty of Arts and made false or misleading records.

The regulator alleges in the Federal Court that between February 2017 and December 2019, the University breached the Fair Work Act when it failed to pay 14 casual academics for all hours of marking work at the hourly rates required under its enterprise agreements.

Instead, the University allegedly paid the staff based on “benchmarks”, which varied depending on the school in the Faculty, and in some cases described payment for marking at a rate based on “4,000 words per hour” and at one school on “one hour per student”.

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It is alleged that total underpayments of the 14 staff were $154,424, and ranged from $927 to $30,140 for individuals.

Staff allegedly had to enter their hours worked into the University’s human resources information system according to the benchmarks, rather than according to the actual hours worked. The Fair Work Ombudsman therefore alleges The University of Melbourne failed to record all hours worked by the casual academics, and further that the University made and kept records known to some managers within the Faculty to be false or misleading.

The Fair Work Ombudsman alleges that the University’s breaches of its enterprise agreements were ‘serious contraventions’ under the Fair Work Act from 15 September 2017 (when the serious contraventions provisions commenced).

The FWO alleges that the University expressly, tacitly or impliedly authorised the contraventions because of a corporate culture involving the use of marking benchmarks. It is also alleged that a number of specific senior leaders in the Faculty knew of the benchmarking practices and that they resulted in employees not being paid for all time spent marking.

The maximum penalties for serious contraventions are 10-times higher than the penalties that would otherwise apply.

Fair Work Ombudsman Sandra Parker said the court action highlighted why the university sector was one of the regulator’s top priorities.

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“Allegations of universities underpaying their employees by systematically failing to follow their own enterprise agreements are of great concern. It is important that where we find alleged serious contraventions we take employers to court and seek penalties to deter non-compliance,” Ms Parker said.

“Universities, like all employers, should have proactive measures in place to ensure they are meeting workplace laws and paying employees correctly for all hours worked. If employers become aware of concerns their employees may be being underpaid, they must promptly seek advice and rectify any compliance issues discovered.”

The Fair Work Ombudsman alleges that the benchmarking practices continued despite the inadequacy of the benchmarks being raised with certain managers within the Faculty in April 2016, February 2017 and on multiple occasions during 2018 and 2019.

The academics worked at the Parkville campus. Three of the academics held a PhD for at least part of their employment, which entitled them to higher hourly rates under the enterprise agreements. At least 12 of the employees have been fully backpaid.

In addition to penalties for the alleged serious contraventions of up to $630,000 per breach, The University of Melbourne faces up to $63,000 per breach for the other allegations.

A date for a directions hearing in the Federal Court in Melbourne has yet to be scheduled.

The regulator’s separate litigation against The University of Melbourne, commenced in August 2022, involves two casual academics in a different faculty. The litigation is ongoing.

Employers and employees can visit or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace. An interpreter service is available on 13 14 50.