Landmark Penalty for Outsourcing Ground Staff
The Federal Court has ordered Qantas to pay a record $90 million for illegally sacking 1,820 ground staff during the COVID-19 pandemic. The penalty marks the largest financial fine imposed under Australia’s Fair Work Act and represents a significant moment in the country’s industrial relations history.
Qantas fined $90 million for illegally sacking staffs during the pandemic
Judgement and Industry Implications
Justice Michael Lee delivered the judgement, stating the fine should act as “real deterrence” for other employers considering similar actions. The judge said, “To deprive someone of work illegally is to deprive someone of an aspect of their human dignity and this is not assuaged simply by mouthing expressions of regret”.
He cited the “scale of contraventions” as the primary reason for a penalty aimed to discourage further breaches of workplace laws. Australia’s Transport Workers’ Union (TWU) welcomed the fine, with national secretary Michael Kaine describing it as a victory for Qantas workers and for all Australian workers.
TWU National Secretary, Michael Kaine
Legal Battle and Workers’ Struggles
Qantas outsourced more than 1,800 baggage handlers, cleaners, and other ground staff in 2020, during a period when the aviation industry faced significant challenges. The court previously found that Qantas carried out the outsourcing to curb union bargaining power. Many sacked workers discovered their loss of employment via a loudspeaker announcement in the lunch room.
Qantas appealed the ruling to the High Court but lost, setting the stage for the record penalty. The TWU had sought the maximum penalty of $121 million, while Qantas argued for a mid-range sum between $40 million and $80 million. The court ordered the airline to pay $50 million directly to the TWU for its role in bringing the case.
Company Response and Change in Leadership
Qantas Group chief executive Vanessa Hudson said, “We sincerely apologise to each and every one of the 1,820 ground handling employees and to their families who suffered as a result”. She noted, “The decision to outsource five years ago, particularly during such an uncertain time, caused genuine hardship for many of our former team and their families”. Ms Hudson added the company had worked hard over the past 18 months to rebuild trust and change its operations.
The court learned that Qantas began accepting responsibility only in 2023, which coincided with the departure of former CEO Alan Joyce. Justice Lee commented that Qantas had apologised in public but attempted to deny compensation to affected employees.
Former Qantas CEO, Alan Joyce
Compensation and Financial Impact
The penalty comes in addition to a $120 million compensation package for laid-off workers, agreed to after the airline lost multiple court appeals in 2024. The compensation covers economic loss, pain, and suffering experienced by staff following the outsourcing decision. Justice Lee expressed doubts in court about whether Qantas would honour all payments, given its prior conduct after the layoff.
Legal experts have questioned whether the penalty will deter similar actions by other companies. Dan Trindade from Clayton Utz said, “If it’s not seen as sufficient deterrence, the government may face calls to increase penalties”.
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Scandal-Plagued Airline Faces Further Scrutiny
In the past year, Qantas paid an additional $100 million fine after selling tickets for thousands of flights already cancelled. The airline has faced growing criticism over a series of scandals, including the illegal sackings and its corporate conduct. Justice Lee commented on Qantas’ “unrelenting and aggressive” legal strategy, which appeared designed to avoid compensating the dismissed workers.
TWU national secretary Michael Kaine said, “Qantas was not sorry to workers when it illegally outsourced these workers, many finding out they’d lost their jobs over a loudspeaker in the lunch room”. He concluded, “Qantas is only sorry now that it has to pay the largest penalty fine of any employer in Australian corporate history”.
Continuing Efforts for Accountability
Union members and former Qantas workers filled the courtroom, embracing as the judgement was delivered. Former employee Anne Guirguis said, “We can close this chapter and move on now”. Don Dixon, another affected worker, stated, “If you want to be the spirit of Australia, then back Australians”.
The penalty underscores a turning point in Australian industrial relations and accountability for corporate decisions. The landmark decision closes a five-year legal battle over the largest case of illegal sackings in Australian history.
