Charles Darwin University has committed to backpay more than 800 employees owed more than $4 million due to historical underpayment issues as part of an enforceable undertaking imposed by the Fair Work Ombudsman.

The FWO said the employees affected, including both current and former casual employees in professional and academic roles, were undercompensated from 2016 to 2022, primarily those based at the university’s main campus in Darwin. Others were situated at various NT campuses, including Alice Springs, Palmerston, and Katherine, as well as the Sydney campus.

Some back-payments owed were as high as $242,280 with the average underpayment around $1,700.

The issue was first discovered back in 2020 when the FWO contacted all universities to ensure all were compliant with workplace laws.

A review completed in March 2022 found the university had breached enterprise agreements by failing to correctly pay casual hourly rates of pay, penalty rates, minimum engagement period, overtime and overtime-related entitlements, which it reported to the FWO. It was unclear why it took two years to complete.

The university said a decentralised payroll system was to blame with some timesheets not processed to accurately record overtime hours. It also said the payroll system was not properly configured to ensure employees received correct entitlements.

The enforceable undertaking mandates that the university improve compliance by providing the FWO with updates on system improvements; ensuring relevant staff receive additional training on their obligations; commissioning two independent compliance audits to verify employee entitlements; informing staff about the undertaking; and establishing a mechanism for employees to submit payment complaints and concerns.

“Charles Darwin University deserves credit for committing significant time and resources to put in place corrective measures that will ensure both full remediation of impacted staff and improved compliance for the future,” Fair Work Ombudsman Anna Booth said.

Ms Booth said enhancing workplace compliance in the university sector has been a top priority for the Fair Work Ombudsman. She stated their preferred approach is for universities to communicate transparently with them about any compliance issues and to collaborate to resolve them.

It was discovered that CDU violated its enterprise agreements from 2013, 2018, and 2022 by failing to properly compensate casual hourly workers for penalty rates, minimum engagement periods, overtime, and related entitlements.

“We’ve made important progress nationally, including through Enforceable Undertakings like this, and we look forward to continuing to work with the leadership teams at universities nationally to assist them to do the sustained, smart work required to ensure their employees benefit from full compliance with workplace laws,” the university said.

In 2022, the Fair Work Ombudsman committed to addressing systemic non-compliance in the university sector by entering into enforceable undertakings with 11 universities, including Monash University, La Trobe University, and the University of Sydney, among others.

CDU has repaid over $3.5 million to 612 employees, but still owes $500,000 to 211 employees, the university said. Additionally, a payroll review is ongoing for 1,483 employees to identify any further discrepancies, with plans to resolve all outstanding payments.

The university aims to finish addressing the pay discrepancies for all underpaid employees by the end of September, it said.

The FWO said in its statement that CDU will also be allocating $200,000 to the Cleaning Accountability Framework, an independent not-for-profit organisation dedicated to enhancing “conditions and standards in the property cleaning services”.