A Federal Court ruling on Monday has added a new chapter to the ongoing saga between Qantas Airways and its former employees, as the court ordered the airline to pay a combined A$170,000 ($114,000) to three baggage handlers it unlawfully sacked in 2020. The judgment, which sets a significant legal precedent, hints at a potentially massive damages bill for Qantas, as the airline faces a broader lawsuit involving approximately 1,700 former ground workers whose jobs were outsourced.
The ruling came from Federal Court Judge Michael Lee, who said the airline must pay the three workers A$30,000, A$40,000, and A$100,000, respectively, for non-economic loss, acknowledging the “harm sustained” when Qantas laid off its ground handling staff to prevent potential industrial action. The judgment is not merely a conclusion to this particular case but a bellwether for the airline’s future legal responsibilities, with the payments serving as “test cases” in upcoming negotiations between Qantas and the Transport Workers Union (TWU), which brought the industrial dismissal case to court.
In 2020, Qantas made the controversial decision to outsource its ground handling operations. Citing the unprecedented challenges of the COVID-19 pandemic, the airline argued that the decision was driven by financial necessity as it sought to reduce operational costs. Ground handling jobs, such as baggage handling and ramp services, were among the hardest hit by this decision, resulting in the loss of approximately 1,700 jobs across the airline’s Australian network.
At the time, Qantas maintained that the outsourcing move was part of a broader cost-saving initiative designed to protect the business during the severe downturn in air travel caused by the pandemic. The airline argued that the decision was vital to saving around A$100 million annually, as its passenger numbers plummeted and flights were grounded due to travel restrictions.
However, the TWU launched a legal challenge against the airline, claiming that Qantas had unlawfully outsourced these jobs in order to prevent industrial action by unionized workers, not simply for cost-cutting purposes. After a protracted legal battle, the TWU’s claims were vindicated when Australia’s High Court ruled earlier this year that Qantas’ decision to outsource the jobs was illegal. Monday’s ruling on compensation for the three test cases now sets the stage for what could be a significant financial payout for the remaining affected workers.
In his ruling, Judge Michael Lee emphasized the emotional and psychological impact the job losses had on the sacked workers. The payments awarded—A$30,000, A$40,000, and A$100,000 for the three claimants—are meant to compensate for non-economic loss, acknowledging the stress and hardship the workers faced as a result of their sudden dismissal during one of the most uncertain periods in recent history.
“The harm sustained by these individuals went beyond the loss of their jobs. It affected their livelihoods, their sense of security, and their future prospects,” Judge Lee said in his ruling. He noted that while Qantas had claimed the sackings were a financial necessity, the timing and manner of the decision showed that the airline had also sought to neutralize the threat of industrial action by the ground handling staff.
The judgment also highlighted the possibility that Qantas might have proceeded with the outsourcing lawfully in 2021 if it had waited, but its decision to act preemptively in 2020 led to the High Court’s finding that the sackings were unlawful.
This ruling, while a victory for the three workers involved, is just the beginning of a much larger legal reckoning for Qantas. Judge Lee instructed Qantas and the TWU to negotiate a total damages bill for all 1,700 workers impacted by the outsourcing, with the Federal Court expecting a progress report when the parties reconvene on November 15.
While the payout to the three former baggage handlers is significant in itself, it pales in comparison to what Qantas might face once compensation is determined for all 1,700 workers involved in the lawsuit. Legal experts have suggested that the final damages bill could run into hundreds of millions of Australian dollars, depending on the outcome of negotiations and the court’s future decisions.
This lawsuit is one of several legal and reputational challenges that Qantas has faced in recent years, particularly regarding its actions during the pandemic. The airline, once regarded as one of Australia’s most trusted brands, has found itself embroiled in a series of controversies that have tested its relationship with the Australian public and the federal government.
In May 2024, Qantas agreed to pay A$120 million to settle a lawsuit brought by the Australian Competition and Consumer Commission (ACCC). The ACCC had accused Qantas of selling tickets on flights that had already been cancelled in the months following Australia’s reopening of international borders in late 2021. The settlement, while not an admission of liability, was a costly reminder of the airline’s missteps during the pandemic.
Additionally, Qantas has faced intense scrutiny over its lobbying efforts with the Australian government, particularly regarding the controversial decision to block Qatar Airways from expanding its flight offerings to Australia. This decision, which critics argue stifled competition and kept airfares artificially high, has added to the airline’s reputational woes.
The latest court ruling comes as Qantas’ newly appointed CEO, Vanessa Hudson, attempts to steer the airline through these turbulent times. Hudson, who took over as CEO in November 2023, inherited a company that was not only financially weakened by the pandemic but also facing a mountain of legal and public relations issues stemming from its handling of the crisis.
In a statement following Monday’s ruling, Hudson acknowledged the court’s decision and expressed regret for the impact the outsourcing decision had on the sacked workers. “We apologize to the workers who were affected by this decision, and we know that the onus is on Qantas to learn from this,” Hudson said. She reiterated the airline’s commitment to working with the TWU to resolve the compensation issue for the remaining workers.
Hudson’s leadership will likely be defined by how she manages these ongoing legal challenges and works to restore the airline’s image. With the TWU calling for swift and fair compensation for the affected workers, Hudson faces the difficult task of balancing the airline’s financial recovery with the need to address the grievances of its former employees and rebuild trust with the public.
Michael Kaine, the national secretary of the Transport Workers Union, was quick to respond to the ruling, describing it as a significant win for the union and the sacked workers. “Qantas says it’s turned over a new leaf,” Kaine said in a statement. “It’s time to prove it. After relentlessly prolonging this case and denying workers justice, Qantas must do everything in its power to ensure appropriate compensation.”
Kaine also called on the airline to change its approach to labor relations, arguing that the outsourcing decision was emblematic of a broader problem within Qantas’ corporate culture. “For too long, Qantas has treated its workers as disposable. This ruling sends a clear message that those days must come to an end.”
The union is now focused on ensuring that all 1,700 workers impacted by the outsourcing decision receive adequate compensation, and it is expected that the upcoming negotiations will be closely watched by both labor groups and corporate Australia.
As Qantas prepares to return to court on November 15, the airline faces an uncertain future. While it has taken steps to address its legal challenges, including settling the ACCC lawsuit and apologizing for the outsourcing decision, the damage to its reputation may take years to repair.
For the 1,700 workers awaiting compensation, Monday’s ruling represents a crucial step toward justice. However, for Qantas, the financial and reputational cost of its actions during the pandemic continues to mount. How the airline navigates these challenges will not only determine its future but also serve as a lesson for other corporations grappling with the fallout from the COVID-19 era.
As the airline industry slowly recovers from the pandemic’s impact, Qantas’ ability to regain the trust of its workforce, its customers, and the broader Australian public will be critical to its long-term success. CEO Vanessa Hudson’s leadership will be instrumental in shaping that future, but the road ahead remains fraught with challenges.
