Embattled Qantas hoping for High Court win in outsourcing case brought by the TWU
Qantas is desperately hoping for a win this week when the High Court rules on the airline’s outsourcing of 1700 ground services jobs in 2020.
Qantas is desperately hoping for a win this week when the High Court rules on the legality of the airline’s outsourcing of almost 1700 ground services staff in late 2020.
The verdict due on Wednesday follows a series of blows to Qantas in recent weeks in the form of an Australian Competition & Consumer Commission lawsuit, a class action over travel credits, controversy over lavish executive bonuses and ongoing discontent among travellers about high fares and cost-cutting.
The snowballing controversies culminated in the early exit of CEO Alan Joyce last Tuesday and an $845m plunge in the company’s market value since the beginning of the month.
Although Qantas is quietly confident the High Court will rule in its favour, the Transport Workers Union believes Australia’s top court would uphold previous judgments by the Federal Court.
The court found Qantas could not prove it was not motivated by “prohibited reasons” and outsourced the heavily-unionised workforce to avoid industrial action when travel was restarting.
Qantas has defended the matter in the High Court on the basis the airline could not have breached the workplace rights of the impacted employees as they did not have the right to take industrial action when the decision to outsource was made.
Throughout all court hearings, Qantas maintained the sole decision-maker in the matter was domestic and international division CEO Andrew David, rather than Mr Joyce.
In the event the High Court finds in favour of the TWU, Qantas will probably face a steep fine but will not be required to reinstate the workers.
A win for Qantas would justify the decision to elevate the matter to the High Court, but crisis management expert Greer Quinn said it was “not likely to win hearts and minds”.
The managing director of Forward Communications and co-host of It’s PR Darlings podcast said that regardless of which way the ruling went, Qantas’s reputation was on shaky ground.
“From a corporate communications standpoint, Qantas is at a crossroads,” said Ms Quinn.
“At this point it’s not about saying the right thing.
“It’s about doing the right thing, and winning a court case isn’t enough.”
She said transparency and being open about past mistakes was critical, along with “actively listening to employees, customers and shareholders to understand their concerns”.
“Leadership reinvention is also important, and new CEO Vanessa Hudson has the opportunity to set a new tone for the company, emphasising employee welfare, customer service and corporate responsibility,” Ms Quinn said.
“Her leadership will be pivotal in instilling trust and confidence among stakeholders.”
Whatever the decision, it is clear the outsourcing decision has already hurt Qantas, by way of increased rates of mishandled bags during the difficult travel restart, longer wait times at baggage carousels, and graphic social media posts of damaged bags.
Pilots have also expressed concerns about the loss of experience among ground workers, leading to delays in pushbacks and a spate of minor collisions between aircraft and vehicles.
Qantas has consistently denied such issues are related to the outsourcing decision.
The victor in Wednesday’s ruling will not only get bragging rights; they will also be spared the enormous legal bill from the case.
Both the TWU and Qantas were represented by top silks including Noel Hutley SC and Bret Walker SC, with costs likely to run into the millions.
The last fortnight has been a rocky one for Qantas shareholders.
The stock was trading at $6.03 before the ACCC announced its legal action.
On Friday the stock closed at $5.54, a slump of almost 9 per cent.
The plunge has reduced the company’s market capitalisation from $10.4bn to $9.5bn.
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