Alan Joyce’s final legacy: A massive industrial relations damages bill

The legacy of Alan Joyce’s 15 years at the helm of Qantas will live on in many ways. He broke many business conventions, but his arguably aggressive industrial relations agenda may find its way into the corporate history books.

So, it really felt like the end of an era this week, when the Federal Court handed down the parameters for compensating 1700 ground handlers illegally sacked by Qantas during the pandemic.

New Qantas chief Vanessa Hudson will have to clean up the industrial relations mess she inherited from Alan Joyce.Credit: Dion Georgopoulos

The airline and the Transport Workers Union now need to get back to the negotiating table to nut out the payment for each worker.

Qantas has been ordered to pay a total of $170,000 to three former workers whose jobs were unlawfully outsourced, and the total estimated payments for the rest of the sacked staff will be extrapolated from this determination.

Thus, at first blush, the last of Joyce’s industrial hardball action looks set to cost the airline $100 million – potentially more.

It is a significant number and not an accounting cost. Qantas will need to hand cash to these former workers, and Joyce’s successor, Vanessa Hudson, who is desperately trying to cut costs, will have to recoup this one-off expense.

Joyce needs no introduction to any discussion about his nuclear industrial relations tactics.

The Federal Court found that while there were valid and lawful commercial reasons for the staff outsourcing, it could not rule out that Qantas also had an unlawful reason – namely, preventing employees from participating in protected industrial action and participating in collective bargaining for an enterprise agreement.

Qantas claimed the decision was purely commercial and would deliver savings of $100 million a year, considered crucial to the airline.

That is the point at which it came unstuck.

Joyce needs no introduction to any discussion about his nuclear industrial relations tactics.

The 9/11 terrorist attacks in the United States may have been the biggest aviation grounding in history. However, here in Australia, it was in October 2011 when Qantas’ entire fleet was grounded by Joyce, who went nuclear to force a settlement with the airline’s pilots, engineers and ground staff.

The unions may have branded Joyce an industrial relations terrorist, but he had significant support from many in the industry who believed the unions were holding the company to ransom with threats of ongoing industrial action.

In many respects, Joyce’s nuclear option set the industrial relations tone with most sectors of Qantas’ workforce for more than a decade.

Joyce was obsessed with shifting pay and conditions in the sector from a bygone era to a modern industrial relations landscape that recognised the airline’s need to compete with other international airlines and lower-cost competitors.

And for that, he was prepared to be the dartboard target of a large part of his workforce.

But Hudson seems much less inclined.

“We sincerely apologise to our former employees who were impacted by this decision, and we know that the onus is on Qantas to learn from this,” she said in response to Federal Court Justice Michael Lee’s ruling on Monday.

“We recognise the emotional and financial impact this has had on these people and their families. We hope that this provides closure to those who have been affected.”

The estimate of the record damages bill is based on Lee’s judgment that the outsourced workers would have remained employed for 12 months without Qantas’ unlawful action, and that they deserved between $30,000 and $100,000 each for the hurt and distress they suffered.

“Hopefully, some common sense can prevail after all the disputation that has taken place, including three separate hearings, six first-instance judgments, three appears – two by Qantas and one by the union – various notices of intention and interlocutory disputes,” Lee said.

Technically, the decision to outsource the staff was made by the former head of Qantas Domestic and International, Andrew David. But, in reality, it’s difficult to imagine that this move didn’t require ultimate approval from Joyce, and probably the board.

Qantas certainly fought hard to defend its actions, but Hudson’s comments this week suggest she is prepared to accept the umpire’s decision.

She needs to usher in a new chapter for Qantas, in which the airline sets itself apart by generating revenue from improvements and innovations in its routes and planes, and better customer service to justify its premium pricing.

Getting into a mud wrestle with staff is not an example Hudson should follow. To be fair, Joyce has done many of the hard industrial relations yards. Hudson should now turn over a new leaf in industrial relations to bring staff on board with her strategy for the airline’s future.

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