La Trobe University uncovers $10m in underpayments to staff

La Trobe University will fork out more than $10m to cover the underpayments of 6700 staff, after investigations found the institution had failed to properly pay employees over a seven-year period. A total 6774 current and former employees from the tertiary institution’s 10 schools were underpaid more than $9.3m for work performed between January 2015 and December 2022. Individual underpayments ranged from $2 to $91,837, with the paychecks of 35 employees falling short by more than $20,000. Another $909,422 in superannuation and $556,061 in interest was also owed to impacted staff. A La Trobe University spokeswoman said the underpayments were unintentional, and were identified by the institution through an independent review initiated in 2020 and was self-reported to the Fair Work Ombudsman in early 2021. “The university has communicated transparently with staff throughout this process,” she said. “We have fully compensated all affected current staff and continue to proactively seek some former casual staff who have not yet responded.” The university has already back-paid $10.08m of the $10.77m underpayment figure, and will also make a $220,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund as part of entering into an Enforceable Undertaking (EU) with the Fair Work Ombudsman. An EU is a legally binding agreement the Fair Work Ombudsman can enter into with a business to stop it from doing certain activities that might breach the law or fix and change certain activities or documents to comply with the law. Fair Work Ombudsman Anna Booth said the EU was appropriate as the university had co-operated with its investigation and demonstrated a strong commitment to rectifying noncompliance issues. “La Trobe University deserves credit for acknowledging its noncompliance issues and committing significant time and resources to put in place corrective measures that will ensure both full remediation of impacted staff and improved compliance for the future,” Ms Booth said. “The matter serves as a warning of the significant problems that can result from an employer failing to have appropriate checks and balances to ensure workplace relations compliance.” The incorrect application of the university’s enterprise agreements resulted in many casual employees not being paid for all hours worked and being underpaid minimum engagement period entitlements. Related stories: VC pay and “quality of governance” to be scrutinised by Senate inquiry | Monash underpays $7.6m, ‘expert council’ on uni governance members announced | Q&A: Bill Shorten talks VC pay and wage underpayments The majority of the underpayments related to marking work, with casual academics often paid according to “benchmarks” – such as words-per-hour, words-per-student or assessments-per-term – as opposed to the actual hours they worked. Casual staff were also underpaid for lecturing, tutoring, and subject coordination work, with the university also failing to keep accurate records of hours worked and pay rates. La Trobe University has agreed to implement a range of measures to ensure future compliance including updating payroll and record-keeping infrastructure, maintaining an employee payments complaints and review mechanism, and developing written guidelines relating to casual entitlements under its 2023 enterprise agreement. Ms Booth said the commitments secured under the EU would help change La Trobe University’s culture and provided an example to the wider tertiary sector. “Improving universities’ workplace compliance is a priority for the Fair Work Ombudsman,” she said. “We look forward to working with the leadership teams at universities nationally to assist them to do the sustained, smart work required to ensure full compliance with workplace laws.” The La Trobe University spokeswoman said the underpayments resulted from complex industrial agreements, inefficient and outdated systems and processes. “La Trobe has since improved and simplified these systems and processes to prevent future errors,” she said. “While unintentional, the university recognises that underpayment of its highly valued casual staff is unacceptable, and we again sincerely apologise to all affected individuals.” La Trobe University’s EU comes almost three months after the University of Melbourne entered into an EU with the Fair Work Ombudsman after it failed to pay staff a total of $72m. Read more: