Thousands of current and former employees at the Royal Melbourne Institute of Technology (RMIT) University, will be back-paid approximately AUD 10 million (USD 7.2 million) after the National Tertiary Education Union accepted the university’s proposal to settle its casual payment dispute.

In June 2021, the NTEU lodged a dispute with RMIT over wage theft dating back as far as 2014.

The union alleged this form of wage theft occurred due to the university paying academic casuals the “standard” rate of pay per hour for marking, instead of the required “academic judgement” rate, a difference of between AUD 10 (USD 7.2) and AUD 20 (14.3) per hour.

After the NTEU referred the allegation to Australia’s Fair Work Commission last month, RMIT proposed to settle the dispute without admission of liability by increasing each “standard” rate payment to casual academic staff for assessment work since 3 July 2014 to the “academic judgement” rate.

This settlement will affect approximately 3,900 past and current employees, mostly casual workers, and cost RMIT an estimated AUD 10 million (USD 7.2 million), accounting for superannuation and interest. 

The union had accepted RMIT’s proposal and will discontinue the dispute.

The terms of a deed of release signed by the parties require RMIT to provide monthly updates to the NTEU on its attempts to contact and backpay past staff, and to meet with an NTEU-nominated “Oversight Committee”, who also have the discretion to bring other underpayment matters to the university’s attention.

RMIT is also required to backpay current casual staff before the end of the year and to contact past casuals who are entitled to payment under the settlement agreement within three months. The university also issued an apology.

According to the Sydney Morning Herald, some of Australia’s most reputed universities have been deluged with wage theft claims in the past year, which have exposed a pattern of systemic underpayment of casual academics. These include Melbourne, Monash, Sydney and Western Sydney, as well as several smaller regional institutes such as Newcastle University, James Cook University in Townsville and the University of New England in Armidale.

Fair Work Ombudsman Sandra Parker said the scale of the problem was putting so much strain on her office’s resources that it was preventing it from investigating other cases of alleged worker exploitation.

Peter Coaldrake, the chief commissioner of the higher education regulator TEQSA, warned universities that a failure to resolve the long-running problem would affect teaching standards, diminish the student experience and put at risk their reputations in the eyes of the Australian public.

RMIT’s settlement means Victoria’s three largest universities, including the University of Melbourne and Monash University, have all been forced to apologise to casual staff for having systematically underpaid them for several years.

NTEU Victorian Division Assistant Secretary Sarah Roberts said four out of eight public universities in Victoria were confirmed to have underpaid their casual staff, suggesting wage theft was not just systemic but “relied on as part of the business model”.

“If you underpay a casual, they’re the least likely employee to say that there’s something wrong because they’re highly dependent on their income from their employer and that income is insecure,” Roberts said.

Roberts added, “Wage theft has deep human consequences, depriving modestly paid casual workers of the income to pay bills, plan for their future or take leave. In some instances, workers have been waiting seven years for the money they are owed.”
“It is encouraging that RMIT has agreed to further training and communication to ensure a consistent awareness and understanding of RMIT policy relating to the payment of academic judgement rates,” Roberts continued. “However, the critical fact RMIT and all universities across Australia must grapple with, is that wage theft is the result of insecure work inflicted on university workers through short- term contracts and casual employment. The fact that RMIT have refused to pay members of the Oversight Committee who are casual employees is emblematic of the chronic underappreciation (and exploitation) of these workers.”
“Wage theft has become ingrained in universities’ business models and must end now,” Roberts said. “RMIT is not the first institution to admit to wage theft and unless every university is compelled to undergo a thorough audit of its practices, it won’t be the last.”

Interim vice-chancellor Dionne Higgins at RMIT University said, “Following discussions with the NTEU and RMIT’s own investigations, it has become clear that to verify that every payment of the ‘standard rate’ was correct in every instance would be an enormous and very time-consuming exercise. RMIT therefore proposed increasing all payments made at the ‘standard rate’ for marking performed during the period 3 July 2014 – 1 November 2021 to the ‘academic judgement rate’. The NTEU has accepted RMIT’s proposal.”

“We consider this is the best outcome for our casual academic staff members, who will receive an additional payment without being required to establish any entitlement or wait for an extended period of time for their claim to be assessed,” Higgins said.

“RMIT greatly values the contribution our casual employees make, and we apologise unreservedly to any who may have felt undervalued, and for any confusion or distress they may have experienced in regard to this matter”.

Earlier this year Australia’s Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 was passed in Parliament.

Amendments in the bill focus on casual employment and addresses issues around ‘double dipping’ with respect to casual employment.

The amendment also required universities to offer permanent roles to casuals who have been employed for at least 12 months and had worked a regular pattern of hours for at least the six previous of those months.

According to Business Insider Australia, because so many university staff are on short-term rolling contracts with semester or summer breaks, few have been eligible to make the conversion from casual roles. The NTEU said that 1% of university casuals had been moved into permanent roles in the six months since the amendment was legislated.