Behind the sandstone facades, manicured quads and a sea of backpacks, Australia’s tertiary sector is actually a $41 billion economic powerhouse charged with churning out more than 320,000 graduates each year.
Before COVID-19, it was one of Australia’s highest valued assets thanks to the thousands of international students brought in each year.
A Universities Australia 2020 report found that, even as the pandemic hit, the country’s 216 universities still delivered $41 billion to the Australian economy.
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It recorded a total operating revenue of $34.7 billion for that same period.
All of this begs the question: just how does this seemingly lucrative industry, charged with the higher education of hundreds of thousands of students here and abroad, account for a business model which has multimillion-dollar wage theft practices “baked into it”?
Topping the list on two fronts
The casualisation of a large portion of Australia’s university workforce and the long-term wage theft issues linked to it are fairly common knowledge to those inside the academic sector.
But it burst into national attention recently with the findings of a National Tertiary Education Union report which highlighted that, across 34 incidents of wage theft in universities, a collective $83.4 million was owed to university staff.
The University of Melbourne — which was the top-ranked Australian facility in 2023’s Times Higher Education World University Rankings — also tops the NTEU list with the most incidents of alleged wage theft. Its systemic underpayments amounted to $31.6 million, more than a third of the NTEU’s overall underpayment figure across all the unis in its report.
The Fair Work Ombudsman has already commenced legal action against the University of Melbourne for allegedly underpaying casual staff in the arts faculty and making false or misleading records.
Between February 2017 and December 2019, the FWO alleges the university, which is Australia’s second-oldest university and counts former prime minister Julia Gillard and renowned writer Germain Greer among its alumni, 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” and breached its enterprise agreements from September 15, 2017.
The University of Melbourne tops the list with the most incidents of alleged wage theft, amounting to $31.6 million, the report alleges. File image. Credit: James Ross/AAP
The academics involved worked at the university’s Parkville campus, with three holding a PhD for at least part of their employment which entitled them to higher hourly rates under their enterprise agreements.
The University of Melbourne allegedly paid staff based on varied “benchmarks” and described payment for marking at a rate based on “4,000 words per hour” and at one school on “one hour per student”.
It is also alleged the university staff had to enter their hours worked according to these benchmarks instead of the actual hours worked.
National Tertiary Education Union Victoria division assistant secretary Professor Joo-Cheong Tham said the allegations highlight how the University of Melbourne has become “the wage theft capital of the university sector” because of its “corporate culture and the actions of senior leadership”.
“It illustrates how the insecure workforce approach of the university systematically results in exploitation and illegality,” Tham said.
“It is high time for the university to overhaul its employment model, as the provost has committed to do, and establish job security as a key priority through targets for continuing employment in its enterprise agreement.”
NTEU national president Dr Alison Barnes added the problem is at a wider scale among universities in the country, calling the acts “reprehensible”.
“The Ombudsman’s allegations of ‘serious contraventions’ show the gravity of the situation we’re dealing with,” Barnes said.
“We have been warning about the scourge of systemic wage theft in our sector for years.
“When are we going to see some action that finally puts an end to the endless stream of shameful allegations like these?
“The root causes of this insidious problem must be urgently addressed. Insecure work and university governance need serious reform to stop more staff from being ripped off.
“We need federal laws that criminalise wage theft with strong penalties for the most egregious cases.
“Universities must urgently address the explosion in casualisation that allows wage theft to flourish.”
It is widely accepted that the casual academics fighting for work at universities are among those hardest hit by wage theft in the sector.
Take Dylan Holdsworth, who, the NTEU reports, has been surviving as a casual academic at Deakin University for nine years.
“I love my job. I love what I do. I love that I have the opportunity to teach students cool things,” he said.
“But I can’t live on this pittance of a wage. I need to be able to save for my future.”
Wage theft has now become an “endemic” part of universities’ business models, the NTEU report said.
While the University of Melbourne stood out in the report as the biggest offender, the other institutions listed in it included University of Sydney with wage theft figures of $12.75 million.
The top five also includes RMIT at $10 million, Monash at $8.6 million and the University of Newcastle at $6,269,421.
“Australia’s biggest public universities post massive surpluses while vice-chancellors and other senior executives receive millions of dollars in salaries each year,” the report read.
“These same wealthy institutions fail to pay hard-working staff who are integral to the teaching and research which generates revenue and delivers immeasurable public good.
“Some universities have admitted wrongdoing while others choose to pursue expensive litigation to fight against the staff that they owed wages.”
Apart from University of Melbourne, Monash University was also cited in the report as a case study, with the NTEU alleging that Monash “systemically underpaid” sessional teaching staff by requiring them to “deliver scheduled student consultation without payment separated from the rate they receive for delivering tutorials”.
Wage theft in the higher education sector can also come in many forms, including being paid for fewer hours than what the work takes, paying piece rates for marking instead of the actual time worked and sham contracting, according to the report.
Teaching misclassification and unpaid overtime has also been cited as a common form of wage theft.
Additionally, high rates of casualisation drive wage theft, given that casual workers are often “reluctant” to raise underpayment complaints, leaving casually employed workers more vulnerable than those with secure employment.
The FWO, in its case against the University of Melbourne, alleges the uni failed “to record all hours worked by the casual academics”.
To combat the widespread issue of wage theft in universities, the NTEU is proposing wage theft be criminalised in the federal government’s next tranche of industrial relations legislation, as well as more parliamentary inquiries into university governance.
The NTEU also recommends public funding be made conditional on universities “setting publicly available targets” to increase “ongoing employment and reducing casualisation”, with employment data reports being regularly provided to the federal government.
Benchmark payments: Melbourne uni’s system of theft
Apart from its allegations regarding casual academics at University of Melbourne, the FWO also alleged “further that the university made and kept records known to some managers within the faculty to be false or misleading”.
It is also claims the university made these serious contraventions due to a “corporate culture” involving the use of benchmarks, and that senior leaders in the faculty were aware of such practices.
The FWO alleges the total underpayments of the 14 staff involved were $154,424, and ranged from $927 to $30,140 for individuals.
FWO Sandra Parker said the claims of widely accepted non-payment practices in the court action highlighted why the university sector remained one of the regulator’s top priorities.
The University of Melbourne underpaid staff by about $31.6m, the tertiary education union says. File image. Credit: James Ross/AAP
“Allegations of universities underpaying their employees by systematically failing to follow their own enterprise agreements are of great concern,” Parker said.
“It is important that where we find alleged serious contraventions we take employers to court and seek penalties to deter non-compliance.
“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 FWO also alleges the benchmarking practices continued despite the issue of its inadequacy being brought up with certain managers within the faculty in April 2016 and February 2017, as well as on multiple occasions in 2018 and 2019.
The University of Melbourne faces up to $63,000 per breach for other allegations, as well as an additional fine of up to $630,000 per breach for the alleged serious contraventions.
The FWO is also in a separate litigation against the university, commenced in August 2022, which involves two casual academics in a different faculty.
A date for a directions hearing in the Federal Court in Melbourne is yet to be scheduled.
The University of Melbourne told 7NEWS.com.au it has received notice of the commencement of legal proceedings by the FWO regarding the underpayment issue of its casual staff in one of its faculties.
“The university has co-operated with the Fair Work Ombudsman’s investigation,” a spokesperson said.
“The staff affected by this historical issue have already been back-paid.
“The university will not be providing further public comment on these proceedings while they are before the courts.
“Separate to the proceedings, the university is working very hard on its remediation program, which has been underway for two years. The university continues to keep staff and key stakeholders updated as this work progresses.
“Through this program, the university is also improving its payroll and time-recording systems.
“The university has publicly acknowledged and apologised to past and current employees who had been paid less than they were due for work that they had performed.”
A spokesperson for the University of Sydney said it was “absolutely committed” to ensuring all staff receive full entitlements.
“When we became aware of errors in the payment of some employee entitlements in 2020, we publicly apologised to affected staff and addressed the errors as quickly as possible, including remediation payments.
“While primarily casual professional staff were found to be affected, we’re now working through a more recent dispute by the NTEU concerning alleged underpayment of casual academic staff in our faculty of arts and social sciences.
“We want to free our academic staff from some administrative responsibilities so they have more time for teaching and research, and are therefore improving processes for allocating and documenting casual academic work and reconciling timesheets.
“During semester 1 we’ll also provide new guidelines to support consistent practice around the engagement and remuneration of casual academic staff across the university.
“If any practices are subsequently identified that have resulted in payment errors to casual academic staff, we are determined to address them.”
A spokesperson for RMIT said it would take its compliance obligations “very seriously” and that it will investigate the matter further.
“Pay rates and employment terms and conditions are clearly defined in our enterprise agreements which are on public record.
“If ever RMIT is provided with evidence to suggest that any employee may not have been correctly paid, it will investigate the matter and take action where needed.
“RMIT resolved an academic judgment marking payment dispute with the NTEU in 2021 without admission of liability to ensure a timely resolution.”
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