The university sector is facing growing calls from parliament to crack down on institutions underpaying staff after being accused of “entrenched non-compliance” by the Fair Work Ombudsman (FWO).
In a submission to the Australian Universities accord panel, the largest review into the sector in more than a decade, the deputy ombudsman, Rachel Volzke, said institutions had created a culture where underpayments were rarely raised.
Institutions were continuing to breach workplace laws and lacked systems to identify risks, Volzke said.
The panel, chaired by Prof Mary O’Kane AC, is due to hand down its interim report later this month, with a final report to be released at the end of the year.
Volzke said universities needed to introduce payment structures where “non-compliance is not indirectly incentivised” and that underpayment reviews had revealed a “pattern of repeated and often entrenched non-compliance,” particularly affecting casual staff.
“The FWO’s investigations to date demonstrate the lack of certainty regarding future engagement … [which] has led to a culture where underpayment matters are rarely raised directly by underpaid employees,” she wrote.
“When they are raised, a systematic approach to reviewing the claims is not adopted.”
The Labor senator Tony Sheldon took the university sector to task during Senate estimates on Friday, calling the wage increases of vice-chancellors “outrageous and disgusting”.
“It is pitiful, an indictment of the university sector that are supposed to be leading the best minds in this country to a better country,” he told Senate estimates. “They have certainly led themselves to have a better lifestyle while we go through the cost-of-living challenges. Also, clearly over the last decade regarding this culture it has been going on for a considerable time.”
He told Guardian Australia Labor had inherited a “governance crisis” in universities.
“Between exorbitant vice-chancellor salaries, widespread casualisation and rampant wage theft … it’s essential that the accord addresses the structural rot that was left to fester in universities’ governance processes,” he said.
“Jobs in higher education are publicly funded, so we have the power to ensure those jobs are secure and fairly paid.”
The Greens’ spokesperson for education, Mehreen Faruqi, echoed his concerns, pointing to several Senate inquiries which had revealed “rampant, systemic wage theft in higher education”.
“The corporate university of today can only function on the back of the unpaid labour of thousands of casual staff and that must change,” she said.
“If these findings don’t make us change course … I don’t know what will.”
Since 2020, the ombudsman has reached out to 27 of Australia’s 47 universities, urging them to ensure compliance with workplace laws.
It has open investigations with several universities and has commenced two separate court proceedings against the University of Melbourne.
It has also entered into enforceable undertakings with Charles Sturt University and University of Newcastle.
The minister for education, Jason Clare, told Guardian Australia the accord panel was examining governance arrangements in higher education, “including how to support universities and … providers to meet their obligations to their staff”.
The head of the National Tertiary Education Union (NTEU), Alison Barnes, said she was glad the FWO had taken an interest but more reforms were needed.
“At the heart of these issues is executives’ reliance on insecure work,” she said.
“It has a chilling effect and makes people vulnerable to wage theft. People are fearful of losing their jobs, fearful of reprisals and reluctant to report.
“We need secure and valued higher education employment, including caps on casual staff and improved regulation and governance.”
The Australian Higher Education Industrial Association (AHEIA) executive director, Craig Laughton, said the body had been working closely with the ombudsman and investment in resources were starting to “pay some dividend”.
“It’s been a genuine learning experience for the sector,” he said. “But it’s not like they’re purposely trying to underpay the most vulnerable people they employ.”
Laughton said a “myriad of issues” had contributed to underpayments, including complex definitions in awards and provisions in enterprise agreements that were difficult to interpret.
“We’re calling on the union and the government to work together to simplify structures we have,” he said. “Definitions are so hard to apply you need external legal advice.”
The vice chancellor of the University of Newcastle, Prof Alex Zelinsky, said the ombudsman had acknowledged the university’s cooperation and early disclosures and new systems had been implemented to avoid non-compliance.
A University of Melbourne spokesperson said it had taken extensive work to remediate affected staff and strengthen university systems, while the vice chancellor had also issued a formal apology.