Federal Court Orders Qantas to Pay $90 Million for Unlawful Outsourcing

What's Happening?

Qantas has been ordered by the Federal Court to pay $90 million in penalties for unlawfully outsourcing over 1,800 ground-handling jobs during the COVID-19 pandemic. The decision to outsource these jobs was initially made in November 2020 as a cost-saving measure, aiming to save the airline approximately $100 million annually. However, the Transport Workers’ Union (TWU) challenged the legality of this move, arguing it was designed to prevent industrial action. The Federal Court found Qantas in breach of the Fair Work Act, a decision upheld by the Full Federal Court and the High Court. The ruling marks a significant victory for the TWU and affected employees, with the court also considering compensation for lost income and damages.

Why It's Important?

This ruling sets a precedent for how airlines and large employers handle outsourcing decisions during crises. It highlights the legal and ethical implications of cost-cutting measures that affect employee rights and industrial relations. The case underscores the importance of maintaining trust and morale within the workforce, which can impact an airline's reputation and customer perception. For Qantas, the decision comes amid other challenges, including allegations of selling tickets for canceled flights and scrutiny over executive bonuses, further affecting its public image.

What's Next?

The TWU is advocating for the reinstatement of some staff and pushing for broader reforms in aviation employment practices. Qantas, under new CEO Vanessa Hudson, faces the challenge of rebuilding its reputation and addressing the consequences of the court's decision. The airline must navigate the legal and public relations fallout while ensuring compliance with workplace laws in future operations.