The University of Melbourne in Australia has committed to paying over AUD 72 million (USD 46 million), including superannuation and interest, to more than 25,000 underpaid staff as part of an enforceable undertaking agreement with the Fair Work Ombudsman.

Under the terms of the agreement, the University of Melbourne has acknowledged it has underpaid a range of entitlements owed under its Enterprise Agreements, including minimum wages, minimum engagement entitlements, casual sessional teaching and casual non-sessional activities rates, shift loadings and overtime entitlements.

Most of the underpayments relate to casual academic and professional staff across all faculties and campuses at the University, including issues about the University’s routine failure to pay staff for many hours of marking, teaching and other associated academic work.

The University also underpaid some fixed-term and continuing academic and professional staff and some trades and services employees.

Systemic failures in compliance, oversight and governance processes were key causes of the underpayments, and under the terms of the agreement, the University has agreed to a range of measures to address these issues and ensure future compliance.

Under the agreement, the University of Melbourne will also make an AUD 600,000 (USD 383,849) ‘contrition payment’ to the Commonwealth Consolidated Revenue Fund and implement various measures to prevent future non-compliance with workplace laws.

Fair Work Ombudsman Anna Booth said the commitments secured under the enforceable undertaking would help to drive cultural change across the University of Melbourne and the wider university sector.

Academics were often paid according to ‘benchmarks’, such as words-per-hour or time-per-student, rather than the actual hours they had worked.

Booth said, “The University of Melbourne now accepts that it was unlawful that for many years, its casual academics adhered to ‘benchmarks’ which were inadequate and resulted in some employees not being paid for all hours worked.”

“The University of Melbourne deserves credit for acknowledging its governance failures and non-compliance issues and for committing significant time and resources to put in place corrective measures to ensure both full remediation of its staff and a transformation for the future,” Booth said.

In light of the wide-ranging outcomes achieved under the agreement, the Fair Work Ombudsman discontinued the legal action it launched against the University of Melbourne in 2023 for alleged contraventions in respect of 14 casual academics in its Faculty of Arts between 2017 and 2020. As part of the agreement, the University of Melbourne has also admitted to underpaying and failing to make and keep records for those 14 casual academics.

The penalty the Fair Work Ombudsman secured against the University of Melbourne in April 2024 for taking adverse action against two other casual academics is unaffected by the agreement.

Booth said the agreement shows that the Fair Work Ombudsman’s preference is to work with universities to address the systemic non-compliance issues in the sector.

“This enforceable undertaking is the most comprehensive entered into by any university and provides an example for the sector (and large employers generally) on what it means to turn practices around with a long-term commitment to embedding a worker voice mechanism to respond to feedback and to meeting all workers’ legal entitlements. In this particular instance, it is also appropriate that the University has agreed to make a contrition payment,” Booth said.

Booth said the University of Melbourne’s remediation program, which commenced in 2020, had identified AUD 54.05 million (USD 34.5 million) in underpayments of 25,576 current and former employees between 2014 and 2024.

Individual underpayments range from less than AUD 1 to AUD 150,881 (USD 0.64 to 96,497). Six employees were underpaid more than AUD 100,000 (USD 63,960), with most underpaid less than AUD 5,000 (USD 3,198).

The University has already back-paid the majority of those entitlements, plus interest, superannuation and interest on superannuation. The 14 academics that were the subject of the Fair Work Ombudsman’s 2023 legal action are among the workers who have been back-paid in full.