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2021 Compliance Report Case Study: Wages underpayment

10 May 2022

The concern

Throughout 2021, TEQSA continued to work closely with the Fair Work Ombudsman (FWO) on the issue of large-scale underpayment of staff by a number of Australian universities. While the FWO is the lead agency responsible for investigating breaches of the Fair Work Act 2009, this is a key issue for TEQSA. In particular, the historic and widespread underpayment of casual academic staff by many universities goes to the reputation of the sector, and of individual providers, in terms of upholding the quality of teaching, learning and the student experience.

In respect to TEQSA’s remit, these practices put providers at risk of non-compliance with the HES Framework, principally:

  • Standard 6.2.1a which requires governing bodies ensure that the entity ‘comply with the requirements of the legislation under which the provider is established, recognised or incorporated, any other legislative requirements’ (for instance, national workplace laws)
  • Standard 6.2.1e which requires governing bodies ensure that risks to higher education operations have been identified and material risks are being managed and mitigated effectively
  • Standard 3.2.5 which requires that teaching staff are accessible to students seeking individual assistance with their studies, at a level consistent with the learning needs of the student cohort
  • Section 5.2 which requires providers take action to mitigate foreseeable risks to academic and research integrity.

TEQSA’s response

Since our first engagement with providers in relation to underpayments in August 2020, we have engaged closely with 15 universities who were either named in the media, self-reported to the FWO, or provided information to TEQSA as part of the material change notification obligation. The purpose of our engagement was to understand the extent of the issue and identify any underlying issues, and what the relevant universities were doing to address the non-compliance and ensure ongoing compliance.

We observed that the response to the underpayment issue has been mixed.

Some universities have been proactive in addressing the issue, including engaging external professionals to undertake a comprehensive review of payroll practices and provide advice on the interpretation and application of relevant enterprise agreements and legislation, as well as implementing contemporaneous record-keeping systems.

On the other hand, a number of universities either do not appear to recognise the seriousness of the issue or are not responding in the way TEQSA would expect of a well governed and well managed quality higher education provider. For example, some providers have undertaken only limited, internal reviews of identified problem areas.

In responding to this issue, TEQSA expects to see that providers:

  • have undertaken a comprehensive review of payroll, time and record-keeping practices
  • have clear steps in place to mitigate and manage identified risks
  • have rectified any instances of underpayments and demonstrated how underlying issues will be addressed
  • are embedding ongoing monitoring to ensure continued compliance with workplace laws and reporting to the audit and risk committee
  • are cooperating fully with the FWO in its investigations. We also expect providers to notify TEQSA under their material change obligations if they identify material issues through their review process.

TEQSA and the FWO shared these observations with provider peak body representatives in a webinar in September 2021. This was followed by a plenary session with Universities Australia. TEQSA continues to work closely with the FWO in 2022, meeting bi-monthly and sharing information, where the law permits, to ensure a coordinated regulatory response.