Owing millions of dollars, university sector now a 'new compliance and enforcement priority'
The Fair Work Ombudsman (FWO) recently cited two Australian universities which collectively owed almost $10 million to their staff.
The two universities self-reported their violations ended in enforceable undertaking (EU), affecting hundreds of staff, the FWO said in a media release.
The University of Newcastle (UON) and Charles Sturt University (CSU) entered into an EU after back paying staff about $6.2 million and $3.2 million, respectively, along with superannuation and interest.
UON’s violation
Between 2014 and 2020, UNO admitted that it underpaid over 7,000 employees, a total of over $6 million under the university’s Enterprise Agreements and the Fair Work Act 2009, the FWO said in a media release.
“Individual underpayments ranged from less than $1 up to $65,449,” FWO said. “The EU requires UON to back-pay all known underpayments, plus a total of more than $171,000 in superannuation and over $1,375,000 interest, by 31 October 2022.”
FWO said that in 2020, UNO self-reported an initial underpayment following workers’ enquiries from casuals at the university’s Conservatorium of Music found $64,600 underpayments. In response, UON commenced an audit of all employee entitlements under applicable Enterprise Agreements.
Based on FWO, the underpayments of the university were “the result of deficiencies in its payroll systems relating to interactions between overtime, allowances and penalty rates; and incorrect application of the clauses in the applicable Enterprise Agreements.”
CSU’s violation
Meanwhile, the FWO said that CSU admitted its violation of relevant Enterprise Agreements after it underpaid over 2,000 casual workers with a total of over $3mil between 2015 and 2022.
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“Individual underpayments ranged from $2 up to $58,229,” FWO said. “Its EU requires CSU to rectify all underpayments, plus more than $628,000 in interest on wages and about $476,000 in relation to superannuation and related interest, by February 2023.”
In 2021, FWO found that CSU self-reported its underpayments after conducting an external review of staff payments in response to accounts of underpayments in the higher education sector.
“CSU misapplied minimum engagement periods for casuals; lacked defined guidelines to ensure consistency in the application of minimum academic casual pay rates; and lacked system controls to identify timesheet entries inconsistent with the terms of its Enterprise Agreements,” FWO said.
What next for the two universities?
According to FWO, UON and CSU should provide the ombudsman with evidence of improved systems to resolve the issues resulting in underpayments. It said that the two employers should also create complaints and review systems for underpaid employees.
Additionally, FWO Sandra Parker said that the two universities have committed to total back payments to their workers, noting that both universities took the initiative to self-report their non-compliance and fully cooperated with the authorities.
“Under these Enforceable Undertakings, in addition to making full back-payments, these public universities must implement stringent measures including systems improvements and training to ensure ongoing future compliance for the benefit of all their workers,” Parker said.
“University of Newcastle and Charles Sturt University have shown a clear commitment to acknowledging and fixing the various errors that existed in their systems and practices, and which they should have picked up,” she added.
Parker further emphasised that the university sector is “a new compliance and enforcement priority for the FWO,” citing that her office recently commenced investigations across 11 universities, with the University of Melbourne facing a Federal Court case earlier this August.
“The University of Newcastle and Charles Sturt University breaches are examples of why all universities must invest in governance and processes to meet all their employment obligations, including their own enterprise agreements,” Parker said. “Universities’ staff, the public and we as the regulator expect them to get it right.”