The Qantas Head of Security can deny the issuing of a Qantas ASIC without having to define a reason. He/She cannot stop an applicant endeavouring to obtain an ASIC elsewhere (such as AviationID Australia) but that ASIC will not be able to be used to access the secure area of any Qantas property.
An ASIC is not for private property access, its for access to security controlled airports and aircraft. An AUS (australia wide) ASIC grants me access to all security controlled airports across Australia, including QANTAS used parts if my job requires that. QF issued ASIC are just that, QF issued, there is nothing special otherwise, the same as Melbourne and Sydney airport issue ASICs, they are just the issuer. If you are referring to door access that's another thing, that's just a local control mechanism and in no way limits your access to work, just creates extra work if you don't have it. I think what people are confusing is access to property with ASIC requirements, QF could imprint electronic access to its facilities outside of airside secure areas, and of course that can be revoked at anytime. If an employee is removed from duty then the ASIC must be removed as it is no longer required for employment. But you cant go the other way around and remove an ASIC for no cause and then fire the employee because they can't hold an ASIC, unless its within the stated reasons. This is to prevent ASIC removal being used as a circumvent for discrimination.
It does sound whatever case happened there was either sound reasoning for the refusal, or, very poor legal representation. In any case a letter to the secretary of home affairs for review is the course of action should an ASIC be denied or cancelled, if he then refuses the issuance, it progresses to the AAT. If that procedure has not been followed a court wont be interested, and I don't think will get involved in any way as there is a prescribed procedure. Much like how workplace issues are resolved.