CDU forced to backpay $4m after underpaying 800 staff over six years

Charles Darwin University (CDU) has been directed to back pay more than $4 million in wages after it was found to have underpaid more than 800 employees between 2016 and 2022.

In a statement yesterday, the Australian Fair Work Ombudsman said CDU entered an enforceable undertaking with the workplace regulator, after self-reporting its non-compliance with Fair Work laws in 2022.

Both CDU and the Ombudsman said the matter affected current and former casual staff working across professional and academic roles.

A total of 823 employees from campuses across the Northern Territory were impacted, with a payroll review of 1,423 more employees still underway.

Of the 612 payments rectified so far, employees have been back-paid an average of $1,700, with some amounting to as much as $242,000 including superannuation and interest.

In a statement, CDU said it expects all payment calculations to be completed in the second half of the year.

Under the enforceable undertaking, CDU will be required to commission two independent audits of its payroll system to ensure it is complying with Fair Work laws.

The university will also be required to maintain an employee complaint and review mechanism.

National Tertiary Education Union NT secretary Rajeev Sharma said the union welcomed the undertaking, but argued there should have been more urgency in addressing the matter.

"Why has it taken so long?" he said.

"I know it's a resource issue, but this is an important matter and more resources should have been allocated to address this issue sooner rather than later."

The undertaking over back pay comes as CDU works to recover from an administrative bungle that left more than 400 TAFE students unaccredited.

The scandal, which came to light early this year, resulted in the resignation of the university's former vice-chancellor Scott Bowman and TAFE chief executive Michael Hamilton.

CDU also subsequently abandoned its plans to develop a campus in London, after investing $2 million in the initiative.

CDU urged to strengthen accountability measures

Australian Fair Work Ombudsman Anna Booth commended CDU for working with her office.

However, she said underpayment of staff was becoming increasingly common in the Australian university sector.

"In 2020 we began alerting universities to our concerns about payments," Ms Booth said.

"We've been in touch with 42 universities since then and entered into 11 enforceable undertakings.

"It really is a systemic problem in the university sector."

While she did not imply the underpayments were deliberate, she said CDU and other universities had failed to invest in human resources, payroll and time-recording systems.

"We found trends of poor governance and management oversight," she said.

Ms Booth said the lack of central payroll and complaints systems was a key factor in the underpayments taking place at universities across Australia.

"A decentralised payroll system meant that some time-sheets were not processed to accurately record overtime hours worked and the payroll system was not properly configured to ensure employees received their correct entitlements," she said.

Mr Sharma said it was imperative CDU learnt from its mistakes, but noted the most pressing matter facing the university's employees was ensuring the current batch of back payments was completed.

"There are still a number of CDU staff and NTEU members who have not received the underpayment that CDU owes to them, so that is a concern," he said.