University of Melbourne agrees to repay $72 million to thousands of academic staff

The University of Melbourne’s total bill for underpaying thousands of academic staff will hit $72 million after it admitted it had improperly paid staff according to performance benchmarks, rather than for the hours actually worked.

Australia’s workplace authority has agreed to drop legal action against the prestigious institution in return for an “enforceable undertaking” by the university to pay $18 million in interest, superannuation and interest on superannuation, on top of the $54 million it has already repaid to workers.

About 25,000 current and former academics have already been repaid by the university under the wage claim that included workers employed between 2014 and 2024.

Most of the employees were underpaid by less than $5000, but six staff members were owed more than $100,000 and one worker was underpaid by more than $150,000. Final repayments are expected to be made early next year.

The university will also make a $600,000 “contrition payment” to the federal government as part of the undertaking as well as making sweeping changes to its payment systems in an effort to prevent any further large-scale underpayments.

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Fair Work Ombudsman Anna Booth said the “benchmarks” widely used to pay academics – such as words-per-hour or time-per-student – were unlawful, and that university workers should be paid for the hours they worked.

“The University of Melbourne now accepts that it was unlawful that for many years, its casual academics adhered to ‘benchmarks’ which were inadequate and resulted in some employees not being paid for all hours worked,” Booth said.

“The University of Melbourne deserves credit for acknowledging its governance failures and non-compliance issues, and for committing significant time and resources to put in place corrective measures.”