Qantas fine shows ‘blatant attacks’ on workers’ rights won’t be tolerated by courts

The $90 million penalty imposed on the national carrier – the “biggest ever ordered by a court for violations of industrial relations laws in Australia’s legal history” – is a shot across the bow for corporations across the country.

As reported yesterday (Monday, 18 August), Qantas has been penalised $90 million by the Federal Court for the illegal outsourcing of around 1,800 ground workers during the pandemic.

The fine, around 75 per cent of the maximum penalty of $121 million, was imposed by Justice Michael Lee on Monday morning. Of this, $50 million will be paid to the Transport Workers’ Union (TWU), with a further hearing to determine how the remaining $40 million should be distributed.

This is in addition to the $120 million in compensation awarded last year to the affected ground workers, who were found to have been illegally sacked or redeployed in 2020–21 in contravention of the Fair Work Act, a ruling that was upheld all the way to the High Court.

According to Justice Michael Lee, the large penalty was necessary in part to deter repeat behaviour, both at Qantas and to set an example for other employers.

“The need for specific deterrence to ensure change does take place and takes root at Qantas is highly significant,” His Honour said.

“The demands of general deterrence to other corporations (particularly large publicly listed corporations) is also centrally important and a penalty must reflect the public interest in ensuring, as Qantas submitted, that this case is, in truth, a real deterrent: a ‘wake-up’ call on what the law is; on how the issues in such cases should be considered in advance, and how litigation should be prepared for and run.”

Penalty ‘reflects the monumental scale of Qantas’ wrongdoing’

According to Maurice Blackburn principal Josh Bornstein, who represented the TWU, said the record penalty meant corporate Australia was on notice that courts would not tolerate “blatant attacks” on workers’ rights.

“This record-breaking penalty reflects the monumental scale of Qantas’ wrongdoing and the court’s concern that Qantas and the business community need to understand that calculated, mass violations of workplace laws may result in severe financial punishment,” he said.

“Qantas, under then Alan Joyce’s leadership, seized the opportunity presented by the COVID pandemic to realise its long-held aim; to rid its operations of the TWU and its members working as baggage handlers and ground staff.”

Bornstein continued: “This was a carefully planned and executed union-busting operation. Qantas worked for months on its plan to try and avoid an adverse outcome in a legal challenge. Qantas tried to hide the involvement of Alan Joyce in the plan. The plan fell apart once Qantas had to hand over documents and its executives were cross-examined in the Federal Court.”

“The payment of the penalty to the TWU reflects the risks it courageously took to pursue and resource a difficult and hard-fought case on behalf of its members and other employees of Qantas. The payment should encourage others to pursue compliance with industrial relations laws. If unions like the TWU don’t enforce the laws, big businesses are emboldened to flout them.”

‘The final vindication’

The judgment, the TWU noted in its own statement, marks the “end of a David and Goliath five-year battle” and is “the final vindication for workers whose decision to fight the case was derided and mocked by Qantas management from day one”.

TWU national secretary Michael Kaine said: “These were committed Qantas workers who had done nothing wrong and had loyally served this company, in many cases, for decades. They weren’t just sacked, they were told by Qantas that they were delusional for questioning it. This ruthless, self-interested and illegal calculation to kick them to the curb has rightfully merited the largest ever penalty of its kind.

“These workers took on a fight against a company with almost limitless resources, knowing it was a long shot, and today’s decision is a $90 million message to corporate Australia that workers will stand up for what’s right.

“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. It was not sorry when it dragged them all the way to the High Court, or when it argued it should have to pay them no compensation at all. Qantas is only sorry now that it has to pay the largest penalty fine of any employer in Australian corporate history.

“If Qantas is serious about changing its behaviour, it will now move to improve standards for workers in its supply chain at companies like Swissport still suffering appalling safety incidents, understaffing and low pay.”

Qantas’ response

In a statement, the Qantas Group said that it accepts the Federal Court’s decision today on the penalty for unlawfully outsourcing its ground handling function in 2020.

“Today’s judgment holds us accountable for our actions that caused real harm to our employees,” the national carrier said.

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. 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.

“The impact was felt not only by those who lost their jobs, but by our entire workforce. Over the past 18 months, we’ve worked hard to change the way we operate as part of our efforts to rebuild trust with our people and our customers. This remains our highest priority as we work to earn back the trust we lost.”

The $90 million penalty will, Qantas said, be paid in accordance with the orders of the court, and it noted it has also paid $120 million into the compensation fund for all affected former employees, which is being administered by Maurice Blackburn.