La Trobe University signs enforceable undertaking for $10.77m underpayments

Another tertiary educator has signed an enforceable undertaking (EU) with the Fair Work Ombudsman (FWO), locking La Trobe University into more than $10.77 million in payments, including superannuation and interest.

More than 6,700 staff across La Trobe University’s 10 schools, including at each of its Victorian campuses and its Sydney campus, were affected by underpayments. In total, the current and former employees were underpaid $9.3 million for work performed between January 2015 and December 2022.

The individual underpayments by the university ranged from $2 to $91,837, including superannuation and interest. A total of 35 employees were reportedly underpaid more than $20,000.

According to the FWO, the underpayments sprouted from a number of systematic failures in compliance, central oversight, and governance processes, as varying schools under the university’s umbrella were adopting different payroll practices.

For example, the university incorrectly applied its enterprise agreements (EAs), resulting in many casual employees not being paid for all hours worked – while also being underpaid minimum engagement entitlements.

The university is back paying the affected employees in full, plus an additional $909,422 in superannuation and $556,061 in interest. More than $10.08 million has already been back paid.

In a statement, the university noted that it self-reported the incident after an independent review was conducted.

“Issues relating to unintentional casual staff underpayment were identified by La Trobe University through an independent review initiated by the university in 2020 and self-reported to the FWO in early 2021,” it said.

Although the university explained that the underpayments were unintentional and came from “complex industrial agreements” and inefficient payroll systems, it apologised to affected employees.

“The underpayments were unintentional, resulting from complex industrial agreements, inefficient and outdated systems and processes.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,” it 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.”

FWO Anna Booth somewhat commended the university for its transparency on the matter yet noted that the EU marked a “significant” reminder for employers and other universities.

“La Trobe University deserves credit for acknowledging its non-compliance 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,” said Booth.

“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 FWO highlighted that since announcing that addressing systemic non-compliance in the university sector became a priority for the regulator, five other EUs have been signed by major universities across Australia – including the University of Sydney and the University of Melbourne.

The University of Sydney was forced to back pay $23 million to staff, whereas the University of Melbourne paid $72 million in staff compensation.

Kace O'Neill

Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.