Qantas fined $90m for outsourcing 1,820 ground handler’s jobs in 2020

Qantas Airways (ASX: QAN) has finally learned the costly outcome of its long-running dispute with the Transport Workers Union (TWU) after the Federal Court this morning hit the group with a $90 million penalty for illegally outsourcing 1,820 ground handler’s jobs in 2020.

The penalty - which includes a payment of $50 million to the TWU - comes almost two years after the High Court upheld a Federal Court ruling that the outsourcing by Qantas was illegal.

It also follows the establishment in December last year by Qantas of a $120 million fund to compensate the workers who lost their job in 2020 in a case described by the TWU as the biggest for illegal terminations in Australian history.

The Federal Court originally found in 2021 that the outsourcing move, undertaken during the height of the COVID-19 pandemic, was illegal. However, Qantas appealed the decision to the High Court which dismissed the airline's last-ditch legal manouevre in September 2023.

In handing down the penalty notice today, Federal Court Justice Lee has ordered Qantas to pay the TWU $50 million while a further pecuniary penalty of $40 million is payable in relation to the group’s breaches of the Fair Work Act.

Justice Lee says the penalty takes into account, among other matters, the nature and extent of the contravening conduct by Qantas, the amount of loss or damage caused and the degree of power the company has in terms of its market share.

TWU national secretary Michael Kaine has welcomed today’s penalty decision, pointing out that the outsourcing of jobs had led to “financial stress, family breakdowns and mental illness” among the affected workers.

“In 2020 over 1,800 Qantas workers took on a huge and audacious battle against this airline, and today’s decision is a final win for both those workers and the tens of thousands of other TWU members who backed them every step of the way,” says Kaine. 

“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.”

Kaine describes today’s decision as “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 lunchroom,” he says.

“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.”

Business News Australia has contacted Qantas for comment on today’s Federal Court penalty decision.

The $90 million penalty follows a $100 million fine imposed by the Federal Court last year for Qantas selling tickets on flights it had already cancelled between 2021 and 2023.