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The Ombudsman claims the university paid staff using benchmarks instead of actual hours worked.
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FWO acts against Melbourne Uni over alleged $150,000 underpayment
10 February 2023
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The Fair Work Ombudsman has begun legal action against the University of Melbourne alleging $150,000 in staff underpayments and serious contraventions of the Fair Work Act 2009.
The regulator alleged that between February 2017 and December 2019, the tertiary school breached the act when it failed to pay 14 casual academics for their time worked at hourly rates and instead paid them based on benchmarks.
It alleged that depending on the school in the faculty, the benchmarks for payment would be at a rate based on 4,000 words of marking per hour or marking one student per hour, breaching the hourly rates required under its enterprise agreements.
The FWO alleged the total underpayments of the 14 staff amounted to $154,424, with individual underpayments ranging from $927 to $30,140.
The investigator alleged staff had to enter their hours worked into the university’s payment system according to the benchmarks, rather than actual hours worked.
It also claimed that the university made and kept records known to some managers within the faculty to be false or misleading.
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The regulator alleged the university “expressly, tacitly or impliedly authorised the contraventions because of a corporate culture involving the use of marking benchmarks”.
It also alleged that several senior leaders in the faculty knew of the benchmarking practices which resulted in employees not being paid for their complete working time.
The benchmarking practices are alleged to have continued despite being brought to the attention of managers within the faculty in April 2016, February 2017, and throughout 2018 and said the FWO.
The regulator claims the breaches constitute serious contraventions of the Fair Work Act with penalties of up to $630,000 per breach.
The FWO said at least 12 of the underpaid employees had been fully back paid.
A University of Melbourne spokesperson acknowledged the action and said the university had already taken steps to address breaches of the Fair Work Act.
“The university has received notice of the commencement of legal proceedings by the Fair Work Ombudsman relating to a historical issue of underpayment of casual staff in one of our faculties,” they said.
“The university is working very hard on its remediation program, which has been underway for two years. Through this program, the university is also improving its payroll and time-recording systems.”
“The staff affected by this historical issue have already been back paid.”
Fair Work Ombudsman Sandra Parker said the alleged contraventions highlighted the need for the university sector to be one of the regulator’s top priorities.
“Allegations of universities underpaying their employees by systematically failing to follow their own enterprise agreements are of great concern,” said Ms Parker.
“It is important that where we find 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.”
This action comes after the FWO commenced separate litigation against the University of Melbourne in August 2022, when it was alleged the university had threatened two casual academics to stop them from claiming payment for hours worked.
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