Australia’s highest court has rejected a bid by Qantas to overturn a ruling that it illegally outsourced 1,700 jobs during the pandemic. The court unanimously upheld that the carrier had unlawfully laid off staff at 10 airports in November 2020.

The ruling found that Qantas breached Australia’s Fair Work Act, which protects employee rights. Qantas apologised for the outsourcing, but maintained it was a necessary financial measure during Covid.

The airline fired baggage handlers and cleaners at airports across Australia at a time when the nation had closed its borders and business was plummeting. “As we have said from the beginning, we deeply regret the personal impact the outsourcing decision had on all those affected and we sincerely apologise,” it said in a statement on Wednesday.

Today, the High Court unanimously dismissed an appeal from a judgment of a full court of the Federal Court of Australia. The appeal concerned whether a decision by Qantas Airways Limited (“Qantas”) to outsource its ground handling operations at ten Australian airports contravened s 340(1)(b) of the Fair Work Act 2009 (Cth) (“the Act”). The effect of the outsourcing decision was that ground handling services then being performed by employees of Qantas and Qantas Ground Services Pty Ltd (“QGS”), many of whom were members of the Transport Workers Union of Australia (“the TWU”), would instead be performed by staff of third-party suppliers.

Section 340(1)(b) provided that a person must not take adverse action against another person “to prevent the exercise of a workplace right by the other person”. A person has a workplace right “if the person … is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument” (s 341(1)(b)). It was agreed that Qantas took adverse action against the affected employees in making the outsourcing decision. At the time of the outsourcing decision the affected employees were prohibited from organising or engaging in protected industrial action under the Act because the affected Qantas employees’ enterprise agreement had not reached its nominal expiry date and the affected QGS employees were practically unable to take protected industrial action. The TWU commenced proceedings in the Federal Court, with issues arising as to whether Qantas could prove that it did not make the outsourcing decision to prevent the exercise of workplace rights by affected employees and whether the outsourcing decision prevented the exercise of workplace rights.

The primary judge found that, while Qantas had “commercial imperatives” for making the outsourcing decision, Qantas had not discharged its onus under s 361 of the Act of disproving that the reasons for the outsourcing decision included preventing the exercise of workplace rights, namely preventing employees from engaging in protected industrial action and participating in enterprise bargaining. The primary judge found that Qantas had contravened s 340(1)(b) of the Act. The full court dismissed Qantas’ appeal.

The issue before the High Court was whether s 340(1)(b) of the Act prohibited a person from taking adverse action against another person for the purpose of preventing the exercise of a workplace right that might arise in the future. The High Court unanimously held that it did and, in so doing, rejected Qantas’ contention that s 340(1)(b) only proscribed adverse action for the purpose of preventing the exercise of a presently existing workplace right.

QANTAS STATEMENT ON HIGH COURT DECISION

Qantas acknowledges and accepts the High Court’s decision to uphold two prior rulings by the Federal Court regarding the legality of outsourcing the remainder of the airline’s ground handling function in 2020.

The Federal Court originally found that while there were valid and lawful commercial reasons for the outsourcing, it could not rule out that Qantas also had an unlawful reason – namely, avoiding future industrial action. The High Court has now effectively upheld this interpretation.

The decision to outsource the remainder of the airline’s ground handling function was made in August 2020, when borders were closed, lockdowns were in place and no COVID vaccine existed. The likelihood of a years’ long crisis led Qantas to restructure its business to improve its ability to survive and ultimately recover.

As we have said from the beginning, we deeply regret the personal impact the outsourcing decision had on all those affected and we sincerely apologise for that.

A prior decision by the Federal Court has ruled out reinstatement of workers but it will now consider penalties for the breach and compensation for relevant employees,[1] which will factor in redundancy payments already made by Qantas.

1] Qantas made a provision against this potential liability following the original Federal Court decision in 2021.

QANTAS BOARD MUST BE SPILLED AS HIGH COURT UNANIMOUSLY DISMISSES APPEAL ON ILLEGAL SACKINGS – Transport Workers’ Union of Australia

Richard Goyder and the entire Qantas board must be replaced by new directors including a worker representative, after the High Court today unanimously upheld two Federal Court verdicts that Qantas illegally outsourced 1700 workers, the TWU said.

The TWU has also called on new CEO Vanessa Hudson to publicly apologise to illegally sacked workers and commit to a speedy and non-adversarial approach to Federal Court hearings on compensation and penalties.

Three unanimous rulings from the Federal Court and High Court found Qantas breached the Fair Work Act. Outsourcing workers prevented them accessing industrial rights to collectively bargain and take protected industrial action.

Qantas previously convinced the Federal Court not to reinstate the workers saying that if it did, Qantas management would sack them all over again.

Since the outsourcing, Qantas’ service has nosedived. Complaints increased 70% in 2022 amid high cancellations, delays and lost baggage.

Qantas faces three further court challenges:

• An unprecedented criminal prosecution from the NSW safety regulator for standing down a health and safety representative during the pandemic.
• Record penalties of $600 million sought by the ACCC for selling cancelled flights.
• A class action from angry customers who say they were misled and denied refunds.

TWU National Secretary Michael Kaine paid tribute to the workforce’s determination to hold Qantas management to account.

“Qantas workers have made history today. It has been three years and 20 days since Alan Joyce first announced the decision to outsource these workers, and they have not stopped fighting for a moment to ensure justice was served. “The final act of this board should be to strip Alan Joyce of his bonuses and follow him out the door.

“The Joyce regime has been toppled, but the airline cannot achieve the reset necessary for its survival under the same board that resided over the largest case of illegal sackings in Australian corporate history. Richard Goyder cannot make it through another day as Chair.

“Qantas needs a fresh start. A worker voice on the board would make a significant difference and send the right signal that Qantas is serious about getting back on track.

“All eyes will be on Vanessa Hudson as she responds to this verdict. Illegally sacked workers are owed an apology and an end to Qantas’ attempts to delay paying compensation and penalties.

“Hudson must reverse the destructive business model at Qantas that has exploited or attempted to manufacture loopholes to axe and outsource essential workers to 38 different entities. These actions have destroyed the airline and its reputation.

“The airline and the industry need saving from themselves. We need Federal Parliament to urgently pass the Closing the Loopholes Bill, and the Federal Government to establish an independent commission to ensure aviation decisions are made in the interests of workers, customers and the public.”

Qantas’ record $2.5 billion pre-tax profit reported in August revealed passenger revenue has jumped 32% since pre-covid 2019.

Qantas received $2.7 billion in taxpayer subsidies throughout the pandemic, $856 million of which was JobKeeper to keep workers employed – the highest amount of JobKeeper paid to any company. Yet, by August 2021, 9400 employees had left Qantas following overzealous redundancies and outsourcing.