The Fair Work Ombudsman (FWO) has initiated fresh legal action against the University of Melbourne over the alleged underpayment of casual staff in the Faculty of Arts and the creation of false or misleading records.

In court documents filed on Thursday afternoon, the regulator alleged that the University breached the Fair Work Act by failing to pay 14 casual academics in line with the rates dictated by their enterprise agreements for marking student work, instead relying on a “benchmarking” system.

The ombudsman alleges that the affected staff were underpaid between $927 to $30,140 each, totalling $154,424 in unpaid wages.

Instead of following the hourly rates set out in the enterprise agreement for marking assessments, the University is alleged to have based payments on varying “benchmarks” depending on the school in the Faculty. Some schools allegedly set their benchmark at “4000 words per hour” and in one instance at “one hour per student”.

Staff then had to enter hours worked into the human resources system in line with these benchmarks, rather than their actual hours worked.

The FWO claims that a corporate culture within the University that viewed benchmarking as an acceptable practice “expressly, tacitly or impliedly authorised” these underpayments, and that specific Faculty executives were aware of the practice.

In an email sent to all staff on Friday morning, Deputy Vice-Chancellor (People and Community) Pip Nicholson said that the University is “looking at the specific allegations very carefully and will respond through the relevant court processes."

A University spokesperson told Farrago that all staff affected by the “historical issue” have already received backpay, and declined to comment further whilst the matter is before the courts.

Both Nicholson and the spokesperson made specific reference to the University’s ongoing wage remediation program, launched after details emerged in 2020 of years-long, systemic, and widespread underpayment throughout the University. According to Nicholson, the University has paid out approximately $45 million in back payments to date. 

The FWO also alleged that the benchmarking system continued despite complaints being raised multiple times with Faculty managers between 2016 and 2019.

As a result of this foreknowledge, the regulator alleges that the University’s actions constitute “serious contraventions” of their enterprise agreements with staff.

Under the Fair Work Act, “serious contraventions” are defined as breaches of the Act that the employer knowingly carried out, and were part of a systematic pattern of conduct.

Serious contraventions carry maximum penalties ten times higher than normal breaches. If found liable, the University would be fined $630,000 per serious contravention, and $63,000 for each other charge.

Professor Joo-Cheong Tham, assistant secretary of the Victorian division of the National Tertiary Education Union (NTEU), said the allegations showed how the University has become the sector’s “wage theft capital.”

University of Melbourne Branch Secretary David Gonzalez also questioned the sincerity of University management in ongoing enterprise bargaining in light of the ombudsman’s claims.

“With the Fair Work Ombudsman’s filing today including allegations that management kept false or misleading records, our members keep asking how can we trust UniMelb management to do the right thing?”

The National Union of Students (NUS) also condemned the University’s benchmarking practices and alleged underpayment.

“How are students meant to receive a fair, in depth review of the work they have submitted when the University is forcing staff to work in ridiculously intense environments of 4000 words an hour or 1 student an hour?” said NUS President Bailey Riley.

“Universities and management can posture as much as they like about maintaining student learning conditions but until we see staff treated & represented fairly, the National Union of Students believes this idea will never be achieved,” Riley said.

Of the 14 casual academics affected, three held a PhD, which provides entitlement to higher hourly rates under the enterprise agreement. The NTEU launched an industrial dispute against the University in early 2022 over alleged failures to honour this entitlement, accusing them of “egregious bad faith.”

This litigation against the University of Melbourne is one of two launched by the FWO in the past twelve months. The other ongoing claim concerns allegations the University coerced two casual academics against requesting payment for extra hours worked, and took adverse action against one by refusing to offer further teaching work.