University of Melbourne Settles $72 Million Staff Underpayments Case
The University of Melbourne is set to repay $72 million (US$46 million) to over 25,000 staff who were underpaid from 2014 to 2024, following an investigation by the Fair Work Ombudsman (FWO). In addition to the repayment, the university will implement significant reforms to enhance its workplace compliance systems, with the aim of preventing future underpayments.
Confirming the agreement, the University of Melbourne stated that the $72 million includes superannuation and interest, and the final stages of the wage remediation program are currently in progress, with payments expected to be finalized by mid-2025. Interim Vice-Chancellor Professor Nicola Phillips expressed regret and reiterated the university’s apology to the affected employees.
The remediation program has already uncovered $54.05 million in underpayments, with affected employees receiving varied back-payments, some as high as $150,881. While most compensations have been disbursed, around $3.6 million in underpayments are yet to be resolved.
As part of the settlement, the University of Melbourne has entered into an enforceable undertaking with the FWO, which includes a $600,000 contrition payment and commitments to systemic reforms to enhance employment compliance within the university. FWO Anna Booth praised the university for acknowledging its governance failures and emphasized that the undertaking would drive cultural change across the sector.
The underpayments primarily impacted casual academics who were paid based on benchmarks rather than actual hours worked. The university has pledged to address these systemic failures and implement comprehensive reforms, including the deployment of a new enterprise resource planning system to ensure compliance with wage laws.
Moving forward, the University of Melbourne plans to share its experiences with other universities and lead the way in promoting sector-wide compliance. Reforms include establishing an Employment Compliance Directorate, creating workplace relations subcommittees, and providing extensive staff training to raise awareness of employees’ rights and facilitate the reporting of wage concerns.
The university’s governance commitments will focus on centralized oversight of wage compliance, emphasizing corporate responsibility and continuous improvement. Furthermore, a worker voice mechanism will be introduced to enable direct communication between employees and the university’s executive team regarding wage and entitlement issues.
