Up to one-quarter of Australian universities are suspected to have engaged in wage theft, with the National Tertiary Education Union (“NTEU”) gathering information to launch class actions in relation to the recovery of tens of millions of dollars in alleged underpayments to casual workers.

The unlawful underpayment of casual staff is estimated to be between $7 million and $9 million at the University of Sydney alone.

Wage theft

Wage theft is the underpayment of workers, resulting in them receiving less than they are entitled to receive under Australia’s workplace relations system. Wage theft can include underpaying wages, penalty rates, superannuation, leave entitlements or making unauthorised deductions from employee pay.

Casualisation of the workforce

70% of university workers are casual or on short-term contracts. This insecure employment creates a weaker bargaining position, meaning that casual workers are at increased risk of wage theft and are concerned about complaining that their employers have engaged in wage theft, given the insecure nature of their employment.

Wage Theft Investigation site

The NTEU has set up a website intended to assist in the gathering of information relating to wage theft, including the ability for workers to report underpayments and complete a Casual Wage Theft Survey, which has also been sent to members of the NTEU who have not yet registered on the Wage Theft Investigation Site.

The survey asks university workers whether they have been subject to some of the most commonly found causes of wage theft in universities, such as:
• being paid the wrong rate, for a lower classification or for an information session instead of a tutorial;
• being paid by a formula (such as a piece rate for papers being graded) instead of according to the actual hours worked; or
• not being paid for required work such as attending meetings and lectures.

In some cases it has been reported that workers were encouraged to “skim” student papers or marks based only on certain sections of the paper to comply with the piece rates specified for marking.

The universities identified as having engaged in wage theft have already started the process of reviewing payments, undergoing audit processes and making back-payments for affected workers.

Fair Work Ombudsman Involvement

The Fair Work Ombudsman has commenced investigations into at least three of the universities, the University of Sydney, University of New South Wales and the University of Melbourne.

The Fair Work Ombudsman may investigate matters involving serious issues or public interest issues, even if workers have been back-paid. The Fair Work Ombudsman has extensive power to investigate and inquire into potential non-compliance with the Fair Work Act 2009 (Cth) or an industrial instrument, such as an award or enterprise agreement.

Consequences of underpayments

Enforcement mechanisms the Fair Work Ombudsman may use to deal with unlawful underpayments include:
• compliance notices, requiring the person take specified action to remedy the direct effects of the identified contraventions and/or require the person to produce reasonable evidence of compliance;
• enforceable undertakings, which may include contrition payments, penalties, media releases and apologies to workers affected by underpayments. Enforceable undertakings avoid the need for litigation, but allow the Fair Work Ombudsman to commence proceedings in Court to seek orders directing the person to comply with the undertaking, for compensation, or any other appropriate order if the undertaking is not complied with; or
• litigation – to enforce workplace law, obtain a penalty in respect of a contravention to achieve specific or general deterrence or represent employees or outworkers who are, or may become, a party to proceedings in a court or the FWC, if the FWO considers that the representation will promote compliance with the FW Act or fair work instrument.

Significant penalties apply for unlawful underpayment. Given the significant cases of wage theft, there is currently a Senate Inquiry into the causes, extent and effects of unlawful non-payment or underpayment of workers. The report will be provided to the Senate no later than June 2021. It is expected that stricter federal laws in relation to wage theft will be examined, following similar inquiries carried out by various state parliaments.