A significant ruling from Australia’s Federal Court has ordered Qantas to pay a record $90 million fine for illegal activities related to the outsourcing of jobs during the COVID-19 pandemic. The airline’s decision to outsource 1,820 baggage handling, cleaning, and ground staff roles in 2020 was found to be an attempt to undermine union bargaining power, according to Justice Michael Lee.
In his judgment, Justice Lee described the violations as “the largest of their type” in Australian industrial history, emphasizing the need for accountability. He directed that $50 million be allocated to the Transport Workers’ Union (TWU) for its role in highlighting and prosecuting the illegal conduct, but he has yet to determine the distribution of the remaining $40 million. The TWU has argued for a larger share, proposing that it should receive $60 million while the affected workers could share the remaining $30 million.
During proceedings, TWU barrister Noel Hutley SC asserted the importance of ensuring that the majority of the remaining fine goes directly to the affected employees. “Obviously, the vast bulk of the remaining $40 million should go to the employees,” he told Justice Lee. He also stressed the need to expedite payments to workers and minimize additional legal costs.
Justice Lee has made it clear that no external party will benefit financially from the fine, stating, “I don’t want any part of the penalty going to anyone except the affected workers or the union.” His decision on the distribution of the remaining funds will be announced later.
Affected workers stand to gain approximately $65,900 each for economic losses and emotional distress, following Qantas’s agreement to establish a $120 million compensation fund. Legal expenses related to fund administration will be deducted from interest accrued on this amount. The court has already approved general damages of $9,000 for 1,759 former employees, totaling over $15.8 million.
As the situation continues to unfold, the economic and non-economic losses suffered by the dismissed workers are currently under assessment for further compensation. “This was an egregious wrong that had to be righted,” said Michael Kaine, national secretary of the TWU, reflecting the union’s commitment to securing justice for its members.
In response to the ruling, Qantas chief executive Vanessa Hudson expressed regret, acknowledging the hardship caused to former employees. “We are genuinely sorry for the distress this has caused many of our former team members,” she stated.
The court’s findings revealed that Qantas had saved around $125 million in the year following the outsourcing, with potential annual savings of the same amount. As the case progresses, the focus remains on ensuring that those affected receive the compensation they deserve.
