Bias does exist and to disregard it would be ignorant.
Its kind of like saying scaling doesnt exist and you can get any ATAR with any combination of subjects. Sure you can 99.95 with gen maths, senior science and standard english but its infinitely easier with subjects like 4u Maths and physics.
Same with unis, its easier to attain better jobs when going to higher ranked unis because employability increases with the prestige of your university. Its unfortunate but true for some, not all workplaces. It really depends on what you want to pursue after uni. If you want to be a doctor, teacher, nurse etc, unis are pretty much irrelevant. But if you want to be an investment banker at Goldman or a software engineer at google your chances are severely diminished with a degree from UWS. Its not impossible but you'd need to have super connections or have done something extraordinary.
Just like ATARs though, degrees become irrelevant to work experience over time (unless you're Scott Thompson). However it really helps to get your foot in the door.
No - employers don't discriminate between universities! Having worked in the private sector for the past 5 years, it's definitely all about who you know and how you carry yourself in an interview.
I think OP is asking in regard to a job immediately after graduating in which case the 'who you know' becomes more about 'who your family knows'. For most people, its a non-factor when it comes to their first. If bias did occur though, it would definitely be before the interview stage. There are some firms that auto-bin resumes from specific universities. Once you get to interviews, you can ultimately prove that your university doesnt define your abilities, but its not being given a chance to do so that is the problem.