Union says Qantas ground staff outsourcing court case a ‘watershed moment’, but airline defiant

The national carrier refuses to budge on its controversial move to outsource ground workers during a ‘window of opportunity’ created by the pandemic.

The Federal Court has ruled against Qantas over the outsourcing of 2000 ground staff, sparking furious celebration by their union, which says the axed baggage handlers, ramp workers and cabin cleaners hope to get their jobs back as soon as possible.

The Transport Workers Union challenged the move last year, alleging the national carrier took advantage of the Covid-19 pandemic, and Justice Michael Lee was tasked with determining if there was any prohibited reason for making the decision.

The union argued the global health crisis “provided a vanishing window of opportunity for Qantas to rid itself” of the TWU’s influence “and the exercise of workplace rights by its members”.

“The perceived financial benefits of outsourcing (which until the pandemic had not been pursued because of the risk of operational disruption) became for the first time feasible and Qantas … seized its perceived opportunity while it lasted,” Justice Lee said in his judgment, outlining the union’s position.

Qantas, on the other hand, argued that no prohibited reason informed the decision in whole or part, saying the pandemic had a devastating, unprecedented impact on its operations and revenues, and outsourcing the jobs fulfilled the imperatives of its recovery plan.

That was to slash operating costs, increasing variability in its cost base and minimise capital expenditure.

The judge said Qantas’ relationship with the union was antagonistic, noting CEO Alan Joyce (centre) had publicly labelled it “militant”. Mr Joyce is pictured with SA Premier Steven Marshall (right) and MP Stephen Patterson announcing a base to create up to 200 new jobs in Adelaide in May. Picture: Naomi Jellicoe

Qantas had given “all objectively cogent commercial reasons for the outsourcing decision” but had indeed contravened the Fair Work Act, Justice Lee ruled.

TWU national secretary Michael Kaine described the win as “a watershed moment for workers in Australia”.

“Workers whose lives have been put into turmoil after being kicked out of work will be expecting their jobs as soon as possible and we will be seeking meetings with Qantas to ensure this happens,” he said.

Qantas said it intended to appeal the judgment, which did not order it to reinstate workers or pay compensation or penalties.

“These matters had not yet been considered by the court and Qantas will oppose any such orders,” the airline said.

“While the court accepted that Qantas made the decision to outsource in response to the unprecedented impact of the Covid crisis, it found the TWU’s claim that preventing future industrial action was also a factor had not been disproven – which is the threshold for such cases.”

Group executive John Gissing told a media conference the company “fundamentally” disagreed with the judgment.

Outsourcing aimed to save Qantas up to $100m a year plus $80m over five years on equipment, the airline said.

“The focus of the TWU’s case was on a few documents … with reference to industrial action, while ignoring the many hundreds that don’t,” Mr Gissing said.

“Any company acting prudently has to consider all operational risks in making a significant decision and reference to the risk of industrial action does not automatically mean that it’s the reason for a decision.

“Qantas was motivated only by lawful, commercial risk and this will be the subject of our appeal.”

Outsourcing aimed to save Qantas up to $100m a year, which it “desperately needed”, he said, and also removed the need to spend $80m over five years on necessary ground handling equipment like baggage loaders.

Mr Gissing said $16bn in revenue lost due to the grounding of flights would rise.

“We needed to act,” he said.

“This is about survival. It was the right decision, it was a lawful decision.”

While the union says 2000 ground staff lost their job, Ms Gissing said it was “more than 1700” who were among 8500 people no longer working for Qantas due to Covid.

He accused the union of having a “persecution complex”, saying it was giving the sacked ground handlers “false hope” of getting their jobs back.

Originally published as Union says Qantas ground staff outsourcing court case a ‘watershed moment’, but airline defiant