I wonder if anyone at Qantas is thinking that maybe just maybe we should have settled this at mediation.
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Court blow for Qantas in compensation hearings for outsourced workers
Qantas’ case in compensation hearings for unlawfully outsourcing workers has been dealt a blow with Federal Court justice Michael Lee dismissing evidence from a key witness.
Robyn IronsideAviation Writer
@ironsider
2 min read
March 21, 2024 - 2:23PM
The Australian Business Network
Qantas and the Transport Workers Union are back in the Federal Court, over compensation payments to outsourced ground handling workers. Picture: NCA NewsWireQantas’ case in Federal Court hearings to determine compensation for unlawfully outsourced workers has been dealt a blow after the judge appeared to dismiss the evidence of a key witness.
Former chief operating officer Colin Hughes has argued he would still have recommended the outsourcing of the workers in 2021, if it had not occurred in 2020.
The argument is critical to Qantas’ case, which seeks to
minimise its liability for compensation to a 12-month period, rather than the much broader time frame sought by the Transport Workers Union.
Evidence presented by
TWU barrister Mark Gibian SC showed Qantas was expecting flying to increase considerably in 2021, making a mass outsourcing exercise less likely.
A statement by then chief executive Alan Joyce made on
March 11, 2021, announcing further federal government assistance, talked about domestic flying returning to 80 per cent by mid-year.
“You would not have (recommended outsourcing) in February or March of 2021 because there was growing demand,” Mr Gibian put to Mr Hughes.
“I reject that entirely,” said Mr Hughes.
“The business had continued to lose money, there was spare capacity in the industry and there was an opportunity to save a significant sum of money.”
Mr Gibian suggested his evidence “was self-serving to help Qantas’ case” and did not reflect the facts.
Justice Michael Lee then weighed in, telling the court he would “work on what Mr Joyce said to the market”.
“I’m going to work on the basis that what Mr Joyce was saying at the time, reflects the true position of Qantas at the time,” said Justice Lee.
“You’ve got no basis to disagree with what Mr Joyce was saying?”
“No,” replied Mr Hughes.
Qantas outsourced its baggage handling, ground services and cleaning operations in 2020 in a decision the Federal Court ruled was unlawful in 2022. Picture: Gaye GerardThe next witness, former Qantas Domestic and International CEO Andrew David, said by June 2021 it was apparent the pandemic and associated restrictions on travel would continue to gouge the airline’s bottom line.
He said on that basis, there was no question he would have made the same decision to outsource the ground handling operation for “lawful commercial reasons” that he did in 2020.
“The case for me would’ve been as compelling as it was in August 2020, (because of) the impacts that the Delta strain had on the business and the position we found ourselves in,” said Mr David.
Asked about the factors taken into account in the decision-making process, Mr David said he understood there to be “considerable risk, but I had to assess those risks against the rewards of the commercial benefits of outsourcing”.
As well as the industrial risks, Mr David said there were concerns about the government response.
“That was a concern in 2020, and it would’ve been a concern in 2021,” Mr David told the court.
“Qantas was one of the main recipients of Jobkeeper, I think in total we got $850m from the government through Jobkeeper. I was very cognisant that us outsourcing 1700 workers in the context of the Jobkeeper scheme was an issue that needed to be managed carefully with the government.”
Although Jobkeeper ended in March 2021, Qantas continued to receive government support to the tune of $800m for its domestic business and $86m for international, said Mr David.
“In 2020, we got the government to a position where they understood we had to make this (outsourcing) decision because of the financial pressures,” he said.
Hearings to determine compensation were set down until Tuesday