Qantas fined $59M for illegal pandemic layoffs

Key Points

• Qantas Airways has been fined AU$90 million ($59 million) for illegally firing over 1,800 ground staff during the pandemic, marking a significant violation of Australian labor laws.
• The case was brought to court by the Transport Workers Union, which highlighted the unlawful outsourcing of jobs and sought the maximum possible penalty for the airline.
• Justice Michael Lee criticized Qantas's litigation strategies and questioned the authenticity of its apologies, emphasizing the airline's focus on financial savings over employee welfare.
• A future hearing will determine the allocation of the remaining AU$40 million ($26 million) of the fine, while AU$50 million ($33 million) has been designated for the union involved in the legal action.

MELBOURNE (AP) — A judge on Monday fined Qantas Airways 90 million Australian dollars ($59 million) for illegally firing more than 1,800 ground staff at the start of the Covid-19 pandemic. The penalty is in addition to the AU$120 million ($78 million) in compensation that Australia’s biggest airline had already agreed to pay its former employees.

Australian Federal Court Justice Michael Lee said the outsourcing of 1,820 baggage handler and cleaner jobs at Australian airports in late 2020 was the “largest and most significant contravention” of relevant Australian labor laws in their 120-year history.

Qantas agreed in December last year to pay AU$120 million ($78 million) in compensation to former staff after seven High Court judges unanimously rejected the Sydney-based airline’s appeal against the judgment that outsourcing their jobs was illegal.

The Transport Workers Union, which took the airline to court, had argued the airline should receive the largest fine available — AU$121,212,000 ($78,969,735).

Lee ruled that the minimum fine to create a deterrence should be AU$90 million ($59 million), noting that Qantas executives had expected to save AU$125 million ($81 million) a year through outsourcing the jobs.

Lee questioned the sincerity of Qantas’s apology for its illegal conduct, noting that the airline later unsuccessfully argued that it owed no compensation to its former staff.

“If any further evidence was needed of the unrelenting and aggressive litigation strategy adopted in this case by Qantas, it is provided by this effort directed to denying any compensation whatsoever to those in respect of whom Qantas was publicly professing regret for their misfortune,” Lee said.

"I do think that the people in charge of Qantas now have some genuine regret, but this more likely reflects the damage that this case has done to the company rather than remorse for the damage done to the affected workers,” Lee added.

Qantas chief executive Vanessa Hudson, who was the airline's chief financial officer during the layoffs, said in a statement after Monday's decision: “We sincerely apologize 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," she said.

“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,” she added.

Lee ruled that AU$50 million ($33 million) of the fine go to the union, because no Australian government agency had shown interest in investigating or prosecuting Qantas.

“But for the union … , Qantas’ contravening conduct would never have been exposed and it would never have been held to account for its unlawful conduct,” Lee said.

“Hence the union has brought to the attention of the court a substantial and significant transgression of a public obligation by a powerful and substantial employer,” Lee added.

A hearing will be held at a later date to decide where the remaining AU$40 million ($26 million) of the fine will go.

Michael Kaine, national secretary of the union that represents 60,000 members, said he felt vindicated by Monday’s ruling, which ends a five-year legal battle that Qantas had been widely expected to win.

“It is a significant — the most significant — industrial outcome in Australia’s history and it sends a really clear message to Qantas and to every employer in Australia: Treat your work force illegally and you will be held accountable,” Kaine told reporters.

“Against all the odds, we took on a behemoth that had shown itself to be ruthless and we won,” Kaine added.

Qantas has admitted illegally dealing with passengers as well as employees in its responses to pandemic economic challenges.

Last year, Qantas agreed to pay AU$120 million ($78 million) in compensation and a fine for selling tickets on thousands of cancelled flights.

The Australian Competition and Consumer Commission, a consumer watchdog, sued the airline in the Federal Court alleging that Qantas engaged in false, misleading or deceptive conduct by advertising tickets for more than 8,000 flights from May 2021 through to July 2022 that had already been canceled.