Qantas Faces Millions in Penalties After Losing ‘Test Case’ Over COVID-Era Sackings

The national carrier will need to pay penalties for the COVID-era decision to stand down 1,700 workers.

A photo taken on June 26, 2024 shows the vertical stabiliser of a Qantas Boeing 737-800 aircraft painted in heritage livery (background C) seen past other Qantas planes parked at a terminal at Melbourne's Tullamarine Airport. (Photo by William WEST / AFP) Photo by WILLIAM WEST/AFP via Getty Images

Australia’s national air carrier faces what could be a compensation bill running into the tens of millions after losing an employment case in the courts.

Last year, the High Court ruled that the airline broke the law when it stood down 1,700 ground crew members in August 2020, and the Federal Court has on Oct. 21 awarded $170,000 in compensation to three workers in what were test cases.

Lawyers for Qantas and the Transport Workers’ Union (TWU) will now have to determine a final compensation figure for the income lost by all sacked staff, limited to 12 months after their roles were outsourced.

The company decided to outsource the 1,700 ground staff jobs in November 2020, and by March 2021, all had been let go.

In July 2021, the High Court found that the layoffs were designed to prevent workers from bargaining for a new enterprise agreement and, as such, contravened employment law.

Justice Michael Lee awarded the three workers compensation of $30,000, $40,000, and $100,000 for “non-economic loss” after they were retrenched during the COVID-19 pandemic.

TWU assistant secretary Nick McIntosh welcomed the ruling.

“This is finally the day for justice for 1,700 workers who did nothing wrong and were illegally sacked,” he said.

“Today is not just a victory for them; it is not just a victory for the TWU. It is a victory for every working person in this country and is also a message to corporate Australia—a message that says, ‘If you treat workers this way, if you think you can get away with the biggest illegal sacking of workers in Australian history, then guess what? Think again.’”

Lawyer to Push for Penalty to Deter ‘Union Busting’

Maurice Blackburn lawyer Josh Bornstein said while the focus would now be on determining how much each sacked worker is owed, the airline’s woes did not end there.

“This was a decision about three test cases. It now has to be applied to every other illegally sacked worker to determine the global figure that Qantas has to pay and the process by which those payments can get to those workers as soon as possible,” he explained.

“That’s not the end of it either, because there is also a penalty hearing coming up, and we will be asking the Federal Court to order a very big penalty against Qantas to deter not only it, but any other companies thinking about union-busting on a grand scale.

“We will be saying to the court, given this is the biggest illegal sacking by a country mile in Australian history … this should be worth more than $200 million,” he said.

Qantas CEO Apologises

Qantas has accepted the Federal Court’s ruling, its CEO Vanessa Hudson said in a statement.

“We sincerely apologise to our former employees who were impacted by this decision and we know that the onus is on Qantas to learn from this.

“We recognise the emotional and financial impact this has had on these people and their families. We hope that this provides closure to those who have been affected.”

She said that the airline would “work to expedite the payments” to those affected.