Pamplemousse that sounds appalling.
I teach at an art school (not where I study for my PhD) and they pay me approx 34.00 per contact hour for seminars and lectures. For lectures we're given two or three hours, and it's up to the individual lecturer if they want to make the actual lecture that long or not - or you can show visual material.
Also we get extra hours here and there, for things which need no preparation, like tutorials, field trips, i.e. gallery visits which take about 3 hours, and department meetings, which we are paid for at the teaching hourly rate.
We have to mark and carry out admin outside of this.
According to a union rep I know each contact hour carries 2 1/2 hours of work, and that includes the time you spend with the students. So what most of us are being paid contravenes that, but your uni absolutely takes the biscuit!!! I'd say the situation you describe is very unethical indeed. Just depends how much you need the experience!