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Qantas faces $200m-plus penalty for illegal outsourcing
Qantas has apologised to workers whose jobs were illegally outsourced during the pandemic, after a High Court ruling went against the airline.
Robyn IronsideAviation Writer
@ironsider
4 min read
September 13, 2023 - 2:18PM
The Australian Business Network
Katter’s Australian Party MP Bob Katter says he will be moving for an inquiry into the Qantas board. “These people that are the slithering Sydney suits that control the share market are corporations in Australia,” Mr Katter told Sky News Australia. He said both the BHP and Qantas boards have been known to appoint CEOs who “are not Australian”. “I have a particular interest here because amongst the first two or three hundred investors in Qantas was my family. “We lost a lot of money, but we didn’t lose money – we invested that money in providing a service for people of outback Australia.”Qantas could face a penalty of more than $200m for the illegal outsourcing of ground handling workers, after the High Court found the decision was motivated by a desire to prevent future industrial action.
The case will now go back to the Federal Court to determine an appropriate penalty after the High Court upheld two previous rulings in favour of the Transport Workers Union.
In a momentous decision, the High Court dismissed Qantas’ appeal, and found the airline was motivated by prohibited reasons in the mass sacking — namely a desire to prevent industrial action when a new enterprise agreement was negotiated.
In response to the ruling, Qantas said it acknowledged and accepted the High Court’s decision to uphold two prior rulings by the Federal Court.
“As we have said from the beginning, we deeply regret the personal impact the outsourcing decision had on all those affected and we sincerely apologise for that,” said a statement.
“A prior decision by the Federal Court has ruled out reinstatement of workers but it will now consider penalties for the breach and compensation for relevant employees which will factor in redundancy payments already made by Qantas.”
The TWU had argued Qantas used the pandemic to enact a years-old plan to dismantle the heavily unionised workforce consisting of baggage handlers, tug drivers and cleaners.
Qantas claimed it was purely motivated by “commercial reasons” with the outsourcing intended to save the airline $100m a year in labour costs, and another $80m over five years in equipment and maintenance.
TWU national secretary Michael Kaine hailed the decision as a “massive result” for workers and repeated calls for the Qantas board to go.
“It has been three years and 20 days since Alan Joyce first announced the decision to outsource these workers, and they have not stopped fighting for a moment to ensure justice was served,” said Mr Kaine.
“The final act of this board should be to strip Alan Joyce of his bonuses and follow him out the door.”
He said it was impossible for Qantas to start afresh with “the same board that resided over the largest case of illegal sackings in Australian corporate history”.
“Richard Goyder cannot make it through another day as chair,” Mr Kaine said.
“Qantas needs a fresh start. A worker voice on the board would make a significant difference and send the right signal that Qantas is serious about getting back on track.”
Mr Kaine also called on new chief executive Vanessa Hudson to publicly apologise to the sacked workers, and commit to a “non-adversarial to Federal Court hearings on compensation and penalties”.
The unanimous judgment
rejected Qantas’s argument that it could not deny workers their rights to protected industrial action, when they did not have those rights at the time of the outsourcing.
“In short, a person who takes adverse action against another person for a substantial and operative reason of preventing the exercise of a workplace right by the other person contravenes (the Fair Work Act), regardless of whether that other person has the relevant workplace right at the time the adverse action is taken,” said the ruling.
“Qantas did not avoid the operation of (the Fair Work Act) in relation to its adverse action by taking the action prior to the existence of the workplace rights, the exercise of which Qantas sought to thwart.”
In 1996, you could fly from Sydney to London first class return for about 200,000 Qantas Frequent Flyer points – now you’ll need more than twice that.
Maurice Blackburn Lawyers principal Josh Bornstein indicated a penalty in the vicinity of $100m would be sought by the TWU plus compensation for the workers which could amount to another $100m plus.
He said Qantas had profited by dragging out the case for years.
“Qantas argued in the High Court that it should be permitted to sack workers merely because they wanted to bargain with the airline. Had the appeal succeeded, it would have greenlighted the further de-unionisation of the labour market by big business,” Mr Bornstein said.
“Qantas has fought this case every step of the way. For three long years, the sacked workers have waited for justice. During that time, the company has profited significantly from its illegal conduct”.
Multinational companies including Swissport, Menzies and dnata were contracted by Qantas to do the work in the place of its own workforce.
As travel ramped up, the outsourcing was blamed for multiple problems for customers, including higher rates of mishandled and damaged luggage, long waits at baggage carousels and minor collisions between aircraft and vehicles on the tarmac.
Other unions joined the TWU in hailing the High Court decision.
The Flight Attendants Association of Australia said it was a clear victory for workers, and the Australian Services Union said the decision was “another nail in the coffin for the manner of business undertaken by Qantas under previous management”.
“Qantas has been in the news for all the wrong reasons and new management has a serious task ahead of it to rebuild the trust of workers and the travelling public,” said ASU assistant national secretary Emaline Gaske.
“Looking ahead, the ASU will collaborate with new management to put an end to years of outsourcing and relentless cost-cutting.”
Qantas had been sweating on the decision after weeks of negative publicity and public outrage over a mountain of unused travel credits, high airfares and big executive bonuses.
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The company is also facing a lawsuit by the Australian Competition and Consumer Commission, alleging Qantas sold tickets on already cancelled flights in early to mid-2022.
The growing crises enveloping Qantas resulted in former CEO Alan Joyce bringing forward his retirement by two-months last week to “help accelerate the renewal process”.
Ms Hudson has kept a low profile since taking over the top job, after directing her executive team to fix problems and focus on customers