Employee Entitlements Review
Overview
An internal review of the University of Technology Sydney (UTS) payment systems in 2021 found that the university had not correctly paid some of its professional casual staff for their minimum hours worked, called ‘agreed hours’.
As soon as identified, UTS reported the underpayments to the Fair Work Ombudsman and agreed to an enforceable undertaking. This included commencement of remediation payments to casual professional staff of more than $4.5 million, plus superannuation and interest.
Over 2023 and 2024, UTS completed further reviews of employee entitlement obligations and determined there were more affected staff cohorts. The university has commenced additional reparation payments, together with any superannuation and interest payments.
The extent of these underpayments is currently being assessed and the full remediation amount will be identified once the review phase is completed in 2025.
Several measures have been taken to prevent the situation from reoccurring and system changes have been implemented in line with the new Enterprise Agreement.
The university remains committed to paying staff correctly and fulfilling all our obligations under the Enterprise Agreement.
Quick links:
- Fair Work Ombudsman
- Payments
- Tax, interest and superannuation
- Contact information
- Detailed background
- Annexure
Fair Work Ombudsman
Which staff were affected?
The initial review in 2021 identified a number of casual professional staff with an ‘agreed hours’ provision in their contract who had been incorrectly paid. An expanded review in 2023 of all university staff payments identified additional cohorts of staff who had also been affected. Repayments are underway and will continue until the university has identified and contacted all cohorts of affected staff.
How is UTS working with the Fair Work Ombudsman?
UTS has been engaging with the Fair Work Ombudsman on an ongoing basis since the initial self-disclosure in May 2021. The university has a written agreement known as an enforceable undertaking to ensure all staff receive their employee entitlements. An independent audit will take place at the conclusion of UTS investigations as well as appropriate online training for staff.
The university is also working closely with the Tertiary Education Quality and Standards Agency (TEQSA), the Australian Taxation Office (ATO), Revenue NSW, relevant unions, and the Audit Office of NSW.
Payments
I am a former staff member. How will I know if I am affected?
The university will send a notification to the last known email, mobile of all affected former staff members. Identity, payroll and superannuation details will need to be validated by former staff members before payments will be made.
Alternatively, former staff members can contact the university's Payroll Assurance Team at Payroll.Assurance@uts.edu.au or on (02) 9514 2458 to provide their current contact details or confirm whether they are an affected former employee.
I am a current staff member. How will I know if I am affected?
Current staff members will receive a notification to the email, mobile number or address listed on the HR system. Alternatively, current staff can contact the university’s Payroll Assurance Team at Team at Payroll.Assurance@uts.edu.au or on (02) 9514 2458 to provide their current contact details or confirm whether they are an affected current employee.
How much money can I expect to be repaid?
Payments are calculated based on individual staff circumstances. Affected current and former staff will receive the difference between the amount that has already been paid and the amount that should have been paid plus interest calculated from the date the underpayment first occurred. Superannuation will be paid where applicable and taxes applied where appropriate.
Affected staff can enquire about how payments were calculated for their individual circumstances by contacting the university’s Payroll Assurance Team at Payroll.Assurance@uts.edu.au or on (02) 9514 2458.
When will I receive my payments?
The university is committed to paying staff correctly and remediation payments to affected staff will be made as soon as practicable. Due to the complexity of the process and to ensure all payments are made accurately, payments will be made in stages. Affected staff will be notified before they receive their payments.
Could I receive more than one payment?
Yes. As the review progresses, affected current and former staff members may be entitled to more than one payment. Notifications will be provided for each instance.
I received a text message about outstanding pay for work I did at UTS. Is this message legitimate?
UTS has been contacting some current and former staff members about possible outstanding payments for work. The text may be genuine.
Former and current staff members who receive a text message can email Payroll.assurance@uts.edu.au or call on (02) 9514 2458 to confirm the authenticity of the message or confirm if they are affected by the underpayments.
Can the university provide me with advice on the financial implications of the payment?
No, the university does not provide personal financial advice. Affected staff may wish to seek advice from a personal financial advisor.
Will identified overpayments need to be repaid?
No, the university will not recover overpayments paid to staff that were identified in this review.
Will the university make remediation payments to deceased estates?
Yes, where a remediation payment is owed to a former employee who is now deceased, the amount will be payable to the deceased person’s estate.
Tax, interest and superannuation
The information below is general in nature and affected former and current staff members should consult the Australian Taxation Office website, a registered tax agent or an accountant for detailed advice specific to their individual circumstances.
Will interest be paid on underpayments?
UTS will compensate employees with interest for potential lost earnings on underpayments. Interest on underpayment is calculated in line with the Federal Court pre-judgement guidelines. The interest on any underpayment is calculated from the day the affected staff member worked when the underpayment occurred, to the date a repayment is received.
Treatment of tax and interest payments may differ for each person. For further information about how tax, interest and superannuation is calculated, there are further resources here:
· The Federal Court pre-judgement guidelines.
· The Australian Tax Office website.
How is the interest payment taxed?
The tax treatment of interest payments varies depending on individual circumstances.
For Australian residents, no PAYG tax will be withheld from the interest payments received. That is, interest will be received in full, and the interest will not be reported on the affected staff members’ income statement and therefore will not be pre-filled in the tax return. The ATO's general guidance is that interest on back payments is generally taxable and therefore must be separately included in your income tax return.
For non-Australian residents for taxation purposes, PAYG tax will be withheld from the interest payment in accordance with PAYG withholding requirements for interest and other prescribed payments made to non-residents. Affected non-resident staff members will be advised of the amount of PAYG tax that has been withheld.
Will the payment impact my thresholds for family tax / childcare / other rebates?
Payments may affect eligibility for government or childcare rebates. It is strongly recommended that affected former and current staff members consult Services Australia within 14 days of the repayment to determine if their individual circumstances are affected.
How is superannuation going to be paid?
The university will calculate any additional superannuation contributions related to ordinary earnings back payments and pay them into your nominated Superannuation fund, or if no fund has been nominated, into UniSuper, the default fund.
Do I get paid superannuation on overtime payments?
Superannuation is not payable on overtime because payment for work performed outside ordinary hours does not constitute ordinary time earnings.
Will the payment impact my 2024–25 financial year earnings and taxation thresholds?
Back payments, including any payment that relates to earlier financial years, will be included on affected staff members’ income statements and pre-filled into the tax return for the financial year in which it is received.
Depending on individual circumstances, affected staff may be eligible for a tax offset applicable to certain back payments. Further information is available on the ATO website.
Will the payment impact my thresholds for superannuation contributions?
Depending on an affected staff members’ individual circumstances, back payments and any associated superannuation contributions may result in exceeding the $30,000 annual concessional contributions cap or the $250,000 Division 293 tax earnings threshold in the financial year when the repayment is received.
General information is available in the Annexure below. Affected former or current staff members are encouraged to seek advice specific to their individual circumstances from an authorised tax agent, accountant or superannuation advisor.
Contact information
The university's Payroll Assurance Team is available to assist and can be contacted at Payroll.Assurance@uts.edu.au or on (02) 9514 2458 with queries about this matter.
Detailed background
Over the past 5+ years, the University of Technology Sydney (UTS) has been undertaking a comprehensive review of staff payments (wages, entitlements and superannuation) to ensure compliance with the relevant enterprise agreements. As errors have been identified, steps to remediate have been taken and this work is ongoing.
Events and actions to date are summarised below:
Toward the end of 2019, with a number of Australian universities identifying issues with payment of superannuation, the University of Technology Sydney proactively engaged Deloitte to assess its compliance with staff superannuation payments since 2014 with the Superannuation Guarantee Act, the UniSuper Trust Deed and UTS’s enterprise agreements. Deloitte’s review had two stages: the first looked at statutory compliance with the Superannuation Guarantee; the second looked at contractual arrangements above the Superannuation Guarantee.
It was identified that some current and former staff were underpaid a combined amount of around $1m of superannuation between July 2014 and March 2021 (an error of 0.4% of the total superannuation payable by UTS over the period). Underpayments were remediated, with interest, in two payments – the first (November 2020) to remediate underpayments against the Superannuation Guarantee Act which averaged $155 (excluding interest and on-costs) per impacted staff member. A second and final payment, to remediate underpayments against the UniSuper Trust Deed and UTS’s enterprise agreements, was issued in July 2021 and interest was calculated up to payment dates.
Early in 2021, while configuring a new payroll system, a potential issue was identified with regard to the payment of some professional casual staff – specifically with respect to the three-hour minimum shift payment entitlement. Underpayments over a six-year period were identified and these underpayments were self-reported to the Fair Work Ombudsman. UTS agreed to an enforceable undertaking and commenced remediation payments to affected casual professional staff, plus superannuation and interest.
At the time of the undertaking, the total underpayment equated to $4.4M and affected 2777 current and former casual professional staff (an average of $1,584.44 per staff member). Additional costs of $235k in relation to superannuation and $1.1M in relation to interest owed, were also identified. These payments have been remediated in full.
The enforceable undertaking with Fair Work included a commitment to a broader review of compliance with the relevant enterprise agreements. In 2023 additional staff cohorts were identified as affected. The university has commenced additional reparation payments, together with any superannuation and interest payments. Assessment and remediation of underpayments is ongoing. A copy of the Fair Work Ombudsman’s UTS media release is available here.
Measures have been taken to prevent a reoccurrence and system changes have been implemented in line with the new Enterprise Agreement.
The university remains committed to paying staff correctly and fulfilling all our obligations under the Enterprise Agreement.
Annexure - Additional contributions and the concessional contributions cap and Division 293 threshold
Current at 28 November 2024
This is not intended to be financial advice. You should seek your own advice according to your personal circumstances.
Your additional super contributions will count toward your concessional contribution cap and will form part of your earnings for Division 293 tax purposes for the tax year ending 30 June 2025 (2024-2025 tax year), or subsequent later tax year if for some reason we cannot make payment to your fund this tax year. This is despite the fact the remedial contributions may relate to earlier tax years.
Depending on your personal circumstances, this may result in you exceeding the $30,000 concessional contributions cap, or $250,000 Division 293 tax earnings threshold.
If you exceed your concessional contributions cap for a tax year, you can expect to receive an excess concessional contributions (ECC) determination from the ATO. Similarly, if your earnings exceed the Division 293 tax threshold, you can expect to receive a Division 293 tax assessment.
ECC are included as additional assessable income for the tax year and subject to income tax at your marginal tax rate. The ATO provides additional information on concessional contributions caps.
However, in “special circumstances” the Commissioner of Taxation may exercise a discretion to allow for eligible contributions to be reallocated to applicable earlier tax years. Alternatively, the Commissioner has discretion to completely disregard contributions such that they are not assessed as ECC.
This document provides instructions to assist you to make an application for exercise of the Commissioner’s discretion.
We have confirmed with the ATO that we are unable to make an application on your behalf. If required, the application must therefore be made by you, or your authorised representative.
Please note, there is no such discretion available to disregard or reallocate earnings for Division 293 tax and therefore an application cannot be made for this purpose.
Actions required
- I will (or expect to) exceed the $30,000 concessional cap for the 2024-25 tax year:
An application may be made to the ATO to have the back-payment disregarded or reallocated to your cap for relevant earlier tax years. The considerations and process for making this application are discussed below. I will not exceed the $30,000 concessional cap for the 2024-25 tax year:
There is no action required. However, we encourage you to check this website regularly.
I am unsure if I will exceed the $30,000 concessional cap for the 2024-25 tax year:
Please evaluate your circumstances closer to the end of the relevant tax year to check whether you will exceed the concessional contributions cap and refer to the above scenarios as applicable to you.
Deciding to apply for the Commissioner to exercise his discretion
If you receive an ECC determination, or if you expect to receive one as a result of exceeding the concessional contributions cap, an application may be made to the ATO for the Commissioner to exercise his discretion to either disregard your remedial contributions or have them reallocated to the relevant earlier tax year(s).
The ATO has released a fact sheet for employers who are required to make remedial superannuation contributions to employees who may exceed their concessional contributions cap, which we refer to below. Whilst this fact sheet makes reference to remedial superannuation guarantee (SG) contributions, we understand the ATO will apply the same general principles to other contractual remedial contributions.
“Special circumstances” in which the Commissioner will consider applying the discretion may include where the employee had no control over the circumstances leading to the remedial superannuation contributions and where a decision not to disregard or reallocate will result in an unfair or unintended outcome. In this regard, we acknowledge that the shortfalls were as a result of employer oversight and we consider that the circumstances which gave rise to the remedial contributions were therefore outside of your control.
If you will (or expect to) exceed the concessional contributions cap
You will need to:
- Decide whether it is appropriate for you to apply for the Commissioner to exercise his discretion in relation to the remedial contributions
- Complete the form ‘Application – excess contributions determination form’ (NAT 71333) https://www.ato.gov.au/forms-and-instructions/excess-contributions-application-for-determination
- Include all supporting evidence relevant to your circumstances. We have been advised that the completion of Sections A, C and E only of the above-mentioned form is generally sufficient for the application, if accompanied by a copy of this letter.
If contributions were made to your superannuation fund other than by The University of Technology, Sydney you will need to provide details and evidence of such contributions for the relevant financial years as part of your application. - Lodge the form and supporting evidence with the ATO.
Important: the form must be lodged no later than 60 days after you receive an excess concessional contributions determination. You can lodge the form any time prior to this. You do not need to wait until 30 June 2025.
Reminder: No action is required if you will not exceed the $30,000 concessional contributions cap for the 2024-25 tax year.
