A$10 million settlement in Australian ‘wage theft’ dispute

RMIT University will backpay an estimated A$10 million (£5.4 million) to thousands of current and former staff to resolve a seven-year-old “wage theft” dispute.

The settlement, negotiated after the National Tertiary Education Union (NTEU) referred a A$17 million claim to the Fair Work Commission in October, raises the tally of “wage theft” repayments so far to more than A$40 million across four Sydney and Melbourne universities.

This could be the tip of the iceberg, with the Fair Work Ombudsman investigating at least 10 other universities over historical underpayments – a list it acknowledges could grow, with 21 institutions believed to have opened their payrolls to audit.

The assistant secretary of the NTEU’s Victorian division, Sarah Roberts, said “wage theft” had become ingrained in the sector’s business models. She said universities routinely allocated inadequate salary budgets to faculties and schools. Tenured academics with only a working knowledge of employment legislation were told to “deal with it”.

“It’s all care, no responsibility,” Ms Roberts said. “[Universities] need to employ people at the coalface to do the engagement and monitoring and make sure that people are being paid correctly, and that just isn’t happening. I fully expect that there will be further instances at each institution because the system is the same everywhere.”

The RMIT dispute, which dates back to mid-2014, concerns policy decisions to pay for marking at the “standard” rate – about A$55 an hour for staff with doctorates, and A$45 for those without PhDs – rather than the “academic judgement” rate of about A$65 an hour.

The university’s enterprise agreement specifies the higher rate for tasks where subject matter expertise is required, such as grading essays, projects or lab reports or marking exams without simple right or wrong answers. The standard rate applies for simpler tasks such as marking multiple-choice exams or tests with numerical answers.

The union says the university breached the enterprise agreement by routinely paying for marking at the lower rate. The university, while not admitting liability, has agreed to backpay casuals the difference between the two rates for all marking performed between 3 July 2014 and 1 November 2021.

The settlement also covers forgone interest and superannuation contributions for what the union estimates to be about 3,900 past and current employees.

A deed of settlement requires the university to make “all reasonable endeavours” to repay current staff by the end of the year and to contact affected former staff by late February. RMIT must give the NTEU monthly updates on these efforts and meet with an NTEU-nominated “oversight committee” authorised to raise other underpayment matters.

Correspondence between the parties shows that RMIT made the pragmatic decision of “simply grossing up payments to the academic judgement rate for all staff” rather than incurring the “time and cost involved in examining each instance”.

“We consider this is clearly the best outcome for our people, who will receive an additional payment without being required to establish any entitlement, as well as being the best commercial outcome for RMIT,” an email says.

RMIT’s interim vice-chancellor, Dionne Higgins, said the university took its enterprise agreement obligations seriously and was committed to ensuring that employees received their full entitlements. 

“RMIT greatly values the contribution our casual employees make, and we apologise unreservedly to any who may have felt undervalued, and for any confusion or distress they may have experienced in regard to this matter,” Ms Higgins said.

Andrew Linden, a doctoral student and sessional lecturer in corporate governance, scoffed at suggestions that the university was trying to make things easier for underpaid casuals. He said RMIT had pursued a strategy to “delay, deny and derail any attempts by people to be paid in line with the enterprise agreement”.

Mr Linden said that when he and colleagues had raised objections to the marking rate in late 2020, they had been required to prove their cases individually. “Despite being presented with the same evidence [in] the same subjects, [the university] made everybody prove the same things – already knowing that there was a problem.”

He said marking rates were the “tip of the iceberg”, with administrators using other ruses to keep payments to casuals low. “A whole lot of people in universities now are incentivised to minimise costs. When they tick off on budget key performance indicators, they get bonuses.”

john.ross@timeshighereducation.com