The Federal Senate Economics References Committee’s report released in March 2022 indicated that 50% of Australian universities have underpaid their staff. The cause for such underpayments was attributed to universities having a predominance of casual employees, funding cuts and lack of job security for the workforce.

Australia’s Tertiary Education Quality and Standards Agency has been working with universities to understand and rectify their underpayment issues. However, given the prevalence, the Fair Work Ombudsman (FWO) has recently announced that it will be investigating underpayments in the university sector, and that compliance and enforcement in the sector will be a priority for the remainder of 2022 and in 2023.

Notably, the FWO has commenced proceedings against The University of Melbourne, alleging it has coerced and taken adverse action against two employees to dissuade them from claiming payment for work performed outside their contracted hours.

The FWO’s recommendations for the university sector are aligned with what every employer should be doing on a regular basis to reduce the risk of underpayments. Namely, that employers:

• audit their payroll, time and record-keeping practices and procedures on a regular basis;
• put strategies in place to mitigate the risk of underpayments occurring, such as having accurate time and wage records;
• promptly address any underpayments if they do occur;
• examine the reasons for any underpayment, if an underpayment does occur;
• ensure they are complying with industrial instruments, legislation and contractual obligations to employees;
• cooperate with any FWO investigations should one occur; and
• comply with any reporting obligations, if an underpayment occurs.

Such strategies assist employers to:

• mitigate the risk of underpayments occurring;
• promptly address any underpayments should they occur; and
• put strategies in place to reduce the risk of further underpayments.

By Kelly Godfrey