University of Wollongong ‘six weeks away’ from disaster unless staff accept large pay cuts, job losses

by | Jun 15, 2020 | Government

Academics are cruising for a bruising, arguing they shouldn’t have to bear the brunt of poor decisions by management, especially when executive pay has risen by 50% in 10 years. Callum Foote investigates.

The University of Wollongong has warned staff that unless they accept large salary cuts and agree to significant job losses, it will only be able to operate for four to six more weeks.

The university has incurred a massive drop in income after a reduction in overseas student enrolments, losing about $90 million in annual revenue.

The university is one of three in Australia whose revenue from overseas students exceeds that from domestic students. NSW universities seem particularly exposed to the international market; the two other universities that have more than half their student revenue coming from overseas students are the University of Sydney and the University of NSW.

Despite having already cut $33 million in spending, University of Wollongong (UoW) administration is looking for a further $57 million in savings. With salaries comprising 40% of the university’s total expenditure, management say the savings have to come from reducing staff salaries.

Academic staff have been told that without these cuts, the university will only be able to operate for four to six more weeks.

‘Reckless’ spending

However, the academics whose jobs are on the line say that the university is now in its dire position because of the reckless spending and borrowing decisions by management. With the university’s revenue base up by 35% in the past five years, the university should, in fact, be in a healthy position, with more than enough money to cover costs in a difficult time.

Last year alone, the university spent more than $175 million buying property, plant and equipment while spending just shy of $30 million on consultancy services and other contracts.

Executives vs academics

Academics facing pay cuts and job losses are also questioning rising executive pay. While the number of executives on the payroll have dropped from 19 in 2009 to nine in 2020, executive pay is up by 50% in the past 10 years, with the average salary just over half a million dollars. Vice-Chancellor Professor Paul Wellings’ base salary is $976,000.

While the executives have pledged to accept a 20% pay cut for 12 months, this is in fact made up of a 10% pay cut and a 10% donation to the university’s Resilience Fund.

Three options for staff

The future of the university is now in the hands of all academic and non-academic staff. They have been told they must choose one of three options for how the university administration will handle the crisis.

The first two choices involve either a 10% or 15% pay cut along with other cutbacks, with each option still resulting in the loss of 150-200 jobs. The third option offered to academics through an online survey last week is to make no changes to employment conditions and instead incur “substantial” job losses.

When put in a similar position last week, academics from the University of Melbourne chose the same Option 3 as has been put to UoW staff. They voted against pay cuts and have been informed that this will result in about 300 redundancies.

Call for transparent consultation

In an open letter to UoW administration signed by more than 60 academics, they argue that “there has been a complete lack of effective and appropriate consultation and the details of UOW’s financial situation have not been made clear”. They have demanded an Option 4, whereby staff and administration “sit down and engage in appropriate and transparent consultation”.

In response to this demand, UoW’s senior deputy Vice-Chancellor Professor Joe Chicharo claimed in an internal staff email that staff who voted for Option 3 “attack and damage the core fabric of the University” and that “without self-sacrifice we can achieve little”.

Secretive contracts

UoW staff have been critical of the university’s one-sided, secretive and lengthy contracts with private parties in relation to the building and maintenance of student accommodation, which has been a significant contributor to the existential crisis the university now faces.

The UoW’s 2019 annual report says that the university “has entered into a PPP (public-private partnership) with the private sector in relation to the construction, refurbishment, operation and maintenance of new and existing student accommodation for a period of 39 years”.

Moreover, under this agreement, “the University will not disclose student accommodation revenue” and “will recognise as income operational service payments for providing operational activities under the service level agreement”.

Staff also point to what they say is poor financial management, given that the last year’s operating result ratio was minus 0.4%, well below the 2% goal and the worst result of the past five years.

UoW management has also ruled out “raiding the piggy bank” of longer-term investments to make up the shortfall. These investments total more than $330 million as of April 2020. Against these investments the university has borrowings of $234 million and has to make further provisions for long service leave.

ABOUT THE AUTHOR

Callum Foote

Callum Foote

Callum Foote is our Revolving Doors editor exposing the links between the highest level of business and government. These links provide well-resourced private interests with significant influence over Australia's policymaking process. Callum has studied the impact of corporate influence over policy decisions and the impact this has for popular interests. He believes that the more awareness this phenomenon receives the more accountable our representatives will be.

10 Comments

  1. Avatar

    Thank you Callum for your work on this. It confirms what many of us suspected.

  2. Avatar

    Hmm. An interesting question, for the UoW Ramsay Centre. Who would probably recommend, a pay hike for the VC.

  3. Avatar

    no mention of the UNi super payments that are above 9.5%. Any reason?

  4. Avatar

    This is what happens when you follow a USA style arrangement when running universities …casualisation of labour and large pay rates for the CEOs..

  5. Avatar

    The University of Western Australia is about to vote on a similar variation to its enterprise agreements for academic and professional staff. Staff are being told in emails from the Vice Chancellor (Jane van Hollander) that the changes will include job protections when in reality they include provisions to fast-track redundancies.

    There is not a single legally binding commitment from UWA to protect jobs but, once agreed to, the EA variations lock in 10% pay reductions and reduced worker protections for at least 12 months – plenty of time to ‘restructure the workforce’ cheaply.

    Normally staff would be informed of what was really happening by their union and staff association but the NTEU have jumped into bed with management for reasons known only to themselves and are keeping staff in the dark. UWA staff are being led like lambs to the slaughter.

    • Avatar

      Yet more deliberate misinformation from opponents of the popular deal at UWA, most of whom aren’t even staff. The same as has been printed and left under windscreen wipers all across campus. Thanks for the lies and litter.

      • Avatar

        Clause 28 of the variation allows UWA to make staff redundant at will:
        “Where the University decides to permanently abolish a substantial work function (such as the abolition of a discipline) or close a campus the University must only make an Employee’s employment Involuntarily Redundant where:
        (a) the Employee’s work is no longer required to be performed by anyone;
        (b) etc”

        Clause 3 of the variation explicitly gives UWA the right to stand down employees on reduced pay – a right the university would previously have needed to apply to Fair Work Australia for.
        “Where an Employee cannot usefully be employed due to a stoppage of work for any cause for which the University cannot reasonably be held responsible, the University may stand the Employee down (i.e. where an Employee could have been stood down under the FW Act).”

        Clause 29 establishes the Covid-19 Temporary Measures Committee (CTMC) which, under Clause 26.2, will rubber-stamp management decisions within five days.
        “Where a Workplace Change is proposed by the University, the CTMC will consider any proposed change and within 5 working days, agree to a timeframe and process to consult with affected Employees about the change.”

        As for the ad hominem attack – all the members of NTEU Fightback that I know are UWA staff, most of them non-academic and on low salaries that are about to get lower, and in jobs that are about to get a whole lot less secure.

        UWA staff have no idea what is about to hit them.

      • Avatar

        Good to see you’re keeping up with those lies. You’re nothing if not consistent.

      • Avatar

        The YES campaign will win anyway. Management and the NTEU (which has jumped into bed with them in a moment of hubris) hold the megaphone. But at least when the departmental closures and lay-offs start in a few months I’ll be able to say “I told you so”.

  6. Avatar

    Clearly UoW should have declared itself to be a church. To date there is only one church complaining about being excluded from Morrison’s largesse: The Very Reverend Peter Piper of the Australian Church of the Pickled Pocket Pickers (not affiliated with the Star of Bethlehem or Hillsong and rejected by Amazon) is asking: “Why was my Church excluded from JobKeeper? Our takings dropped by 100% as our priests (not employees) were unable to pursue their mission of helping the rich pass through the eye of the needle. And, we still have to pay legal fees defending our priests from harassment by the ABC.”

QED

Case for Federal ICAC

Quad Erat Demonstrandum

Revolving Doors

Revolving Doors

Video Channel

The West Report

Support Us

subscribe to michael west media

[ Click to find out more ]

Michael West Email

Get Our Weekly Newsletter

Unsubscribe anytime.

Thank you! We'll also confirm via email.

Pin It on Pinterest

Share This