Qantas claims it made ‘a mistake’ in illegally sacking 1820 ground workers
Qantas could be forced to pay $120m in penalties on top of the millions it is already set to pay in compensation to sacked workers.
Business
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Qantas says it has “learnt its lesson” after unlawfully sacking more than 1800 ground workers, claiming the decision was a “mistake” rather than deliberate.
The airline was thrice found to have acted unlawfully when it fired 1820 staff in favour of outsourced contractors during the height of the Covid-19 pandemic.
While an earlier compensation hearing before Justice Michael Lee found Qantas should pay $120m to impacted workers, now a hearing will decide the added penalty Qantas must pay for the 2020 decision.
Qantas barrister Justin Gleeson SC continued his submissions at the Federal Court hearing in Sydney on Wednesday before Justice Lee.
Mr Gleeson told the court that Qantas’s decision was “a mistake” and not “intentional”.
“Going forward, Your Honour can be comfortably satisfied Qantas has learnt its lesson,” he said.
“Through Ms Walsh’s division and the board … the risk of making this error again is low.
“Qantas is coming to your honour as a first offender … and it would be oppressive to say you should pay close to the maximum penalty.”
Various meetings between senior managers at Qantas, a group management committee (GMC) meeting and a board meeting came under the microscope in court on Wednesday.
Mr Gleeson contended the problem with the outsourcing decision was not exposed to the GMC or board members during the meetings.
“Effectively the green light was given (to the board) … the problem was there but it was not exposed to the GMC or to the board and that’s to be taken into account when assessing the liability,” he said.
Mr Gleeson said the process “fell down” when it had not come to the attention of anyone at the GMC level that a red flag needed to be put up when making the decision.
In response, Noel Hutley SC, for the Transport Workers Union, told the court on Wednesday afternoon that the penalty range of $40-80m as suggested by Mr Gleeson was not of great assistance to Justice Lee.
“We say to imagine a fine of $40m is inconceivable in our respectful submission,” he said.
“The seriousness of this is at a very high level … which they have conceived in a sense … but they just say it’s not as high as we would have it.”
Mr Hutley rejected the airline’s submission that no one knew of the issue with the outsourcing decision during the GMC and board meetings.
“How could no one have known?” he said.
“None of it was supposed to come out … that’s the key of what we’re talking about.”
Mr Hutley said the concerns were obvious in regards to the executive meetings in which Qantas said no one was aware of the issue with the outsourcing decision.
“The case is we’ve all toddled along and tripped along and everybody has missed it and we just say that it is not credible,” he said.
‘Stronger than Sunrise’
The court was also told of a meeting between Qantas executives and lawyers that discussed the legality of outsourcing ground handlers.
In the meeting it was said that the proposal to outsource ground handlers was “stronger than Sunrise” – a reference to the airline’s ultra-long-haul Project Sunrise flights from Sydney to London and New York that are expected to begin in 2027.
“That appears to be some assessment as to whether the case for lawfulness is stronger than Project Sunrise,” Mr Gleeson said, referencing the meeting notes.
The airline has since reached an agreement with its pilots and crew who will work the ultra-long-range flights of more than 20 hours.
Meanwhile, Mr Gleeson said any penalty close to the maximum would be “manifestly unfair”.
“Qantas has accepted the seriousness of its conduct,” he said.
“The court can and should impose a significant deterrent penalty. However, it is in effect a first contravention (of the fair work act).”
The maximum penalty Qantas can be ordered to pay is $121m, on top of the $120m compensation fund that is now in the process of being administered to workers.
Earlier, the TWU called for the maximum penalty be inflicted upon Qantas and said the flying kangaroo was faced with a “once-in-a-lifetime opportunity” during the pandemic to save more than $100m per year.
Mr Hutley said the airline had the “temptation of the potential to produce a massive profit”.
In his submissions on Tuesday, Mr Hutley said Qantas had acted with “arrogance and a dismissive and self-justified attitude towards these events” that it was “dragging out”.
While Justice Lee is yet to decide exactly who will receive the money from the penalty imposed upon Qantas, there are three likely parties proposed.
The TWU is seeking a large majority of the penalty and also argued affected workers should receive further compensation.
Otherwise, the funds could go directly to the commonwealth.
The Federal Court earlier found that Qantas had acted against protections in the Fair Work Act in its outsourcing and was partly motivated by a desire to prevent industrial action.
The airline appealed the decision to the full bench of the Federal Court and later the High Court, both of which were unsuccessful.
After losing the appeal, the union and Qantas went to mediation to determine how much Qantas would have to pay the outsourced workers for economic losses linked to lost wages.
The hearing, which spanned more than three days, has now been adjourned.
Justice Lee has reserved his judgment while he considers the matter.
The penalty amount will be revealed at a later date.
Originally published as Qantas claims it made ‘a mistake’ in illegally sacking 1820 ground workers
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