Universities unlikely to be prosecuted under Victorian wage theft laws

Although Victoria’s first criminal case of wage theft is set to be heard in February, experts say tertiary institutions are unlikely to be criminally prosecuted under the state’s recently legislated Wage Theft Act. Selina Zhang reports.


Although Victoria’s first criminal case of wage theft is set to be heard this February, experts say tertiary institutions are unlikely to be criminally prosecuted under the state’s recently legislated Wage Theft Act.

This comes amid the University of Melbourne's record $22 million repayment to casual workers, and fresh allegations of wage theft made against Deakin University last November.

Professor Andrew Stewart, from the University of Adelaide Law School, says it will be much harder for larger organisations like universities to be held criminally liable under the Act.

This is firstly because prosecutors need to be able to identify specific individuals who intentionally enforced, or were at least aware of, wage theft practices.

But what Stewart calls the "diffusion of managerial authority, responsibility and knowledge" across universities means that numerous departments all have different levels of oversight in the payment of staff. 

"This is not to say that it's impossible to establish the appropriate level of knowledge," he explained.

"It's just that it's going to be quite a complex task ... can it be established that [wage theft] is a deliberate, deliberate practice? ... As soon as you talk about a bureaucracy, particularly one as convoluted and inefficient as you find at a university, that's where it becomes hard for a regulator to be able to make out the necessary intent."

Unions and staff contend that universities have nonetheless broken a contractual obligation to their workers, by failing to pay the proper wages owed under the annual Enterprise Agreement (EA).

"All employers are under an obligation to be capable of paying their employees correctly before entering into an employment relationship ... There can be no excuse for failing to pay their employees correctly," the National Tertiary Education Union (NTEU) stated in its submission to the 2020 Senate Inquiry.

"Whether you call a failure to abide by a contractual obligation criminal, I cannot say, but I am sure it is a decided wrong of some kind, negligence at best," said Dr Kerstin Knight, a casual tutor at the University of Melbourne.

But even in cases where necessary intent can be established, inconsistencies between state and federal legislation present another hurdle before any criminal charges can be laid. 

The Commonwealth does not yet offer any criminal penalties for wage theft, with Victoria and Queensland the only states to have criminalised the practice so far.

“It’s inconsistent with the federal Fair Work Act for state law to impose a sanction which the federal law does not itself provide,” said Stewart.

"[So] it doesn't seem likely that we're going to see a lot of prosecutions brought against larger organisations, given the difficulties of establishing the necessary intent and the likelihood of a constitutional challenge," he concluded. 


Future compliance with payment of casuals

While universities may avoid facing criminal liability under Victoria's wage theft laws, Professor Stewart believes hefty civil penalties will still enforce greater compliance going forward.

"A combination of the Fair Work Ombudsman, the NTEU, the threat of court action ... There is no question in my mind that we have seen [civil consequences] having an impact," he said.

Following successive wage theft scandals over the past few years, the University of Melbourne has indicated plans to decasualise its workforce, and discuss improvements to the EA with staff and unions.

"We are progressing work to reduce our unsustainable reliance on casual employment... And to ensure our employment practices are fully compliant," said a University spokesperson.

The University has not provided any timeline or targets for decasualisation, but stated it would improve auditing processes and implement a new payroll system in its wage remediation program update.

In spite of efforts to improve compliance, Professor Stewart suggests cases of wage theft are likely to continue, due to chronic underfunding and understaffing of universities.

"The insistence by many universities of putting profits ahead of their current staff or students has almost inevitably created a climate in which it will be more likely that you will see some breaches in relation to payment practices,” he said.

For casual staff like Dr Knight, the University’s remediation programs and promises of greater compliance provide little reassurance for future payments.

"In my own case, there have been errors in calculating correct renumeration or work-loads in almost all semesters in which I've worked," she said. "I don't really want to be in a position to have to double-check everything, it feels awful ... But if you don't query, you end up exploited for your trust."

Photograph: University of Melbourne clocktower with tree in the foreground. Akash Anil Nair.


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