Qantas in court loss to Transport Workers Union over outsourcing

The outsourcing of 2000 ground handling crews by Qantas was motivated by an unlawful reason, the Federal Court has found.

Qantas airport baggage handlers, whose jobs were outsourced last year, have scored a critical victory in the Federal Court.

Qantas will appeal a Federal Court ruling that found the airline acted unlawfully in its decision to outsource 2000 ground handling crew.

The jobs of baggage handlers, ground crew and cleaners were axed early this year, after all below the wing operations were outsourced to third party providers including Swissport, Menzies and dnata.

Judge Michael Lee delivered his judgment on Friday, ruling that Qantas had failed to convince him that the risk of protected industrial action by the workers was not a factor in the outsourcing decision.

He described the case brought by the Transport Workers Union was “complex” and said under the law, it was up to Qantas to prove it had not used an unlawful reason to outsource the jobs.

Although the airline had argued the decision was made solely for financial reasons to help alleviate the crippling impact of the Covid-19 pandemic, Justice Lee said there was evidence to suggest those involved in the decision were conscious of a limited window of opportunity.

“I am affirmatively satisfied that (former Qantas executive) Paul Jones factored into his risk assessment, that the outsourcing decision should be taken at that particular time to prevent affected employees disrupting services in 2021 by taking protected industrial action,” Justice Lee said.

“The documents are replete with reference to industrial risk and the likely industrial backlash if outsourcing ground operations was pursued which was no doubt the reason why experienced industrial lawyers were so heavily involved.

“Qantas’ evidence went to great lengths to paint a picture of internal agonising and studious assessment of the alternatives and detachment up until the eleventh hour, but I am unconvinced that this was the case.”

Justice Lee said the court would reconvene on Monday (August 3) to decide upon declaratory relief in favour of the union.

The TWU indicated it would be demanding the outsourcing decision be reversed and called the ruling a “watershed moment for workers in Australia”.

“This ruling calls a halt to shifting responsibility for workers and outsourcing them onto third parties on a low cost, take-it or leave-it contract,” said TWU national secretary Michael Kaine.

“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.”

Qantas said planned to appeal the ruling, saying it “fundamentally disagreed with the judgment” and stressed that there was no requirement to reinstate workers and pay compensation or penalties.

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

“Qantas will also seek to have its appeal heard as soon as possible and before any remedy hearing.”

Group executive John Gissing said the focus of the TWU’s case was on a few documents that made reference to industrial action while ignoring the hundreds that didn’t.

“Any company acting prudently has to consider all operational risks when making a significant decision, but a reference to the risk of industrial action risk does not automatically mean that it’s a reason for the decision,” Mr Gissing said.

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

A recent survey of the outsourced workers by the TWU found 77 per cent wanted their jobs back, and 75 per cent had been unable to find full-time employment since being axed.

Mr Kaine said the judgment raised serious questions for senior Qantas management who “targeted ground workers for outsourcing because they were united to fight for decent standards at the airline”.

However Justice Lee found high levels of union membership among the ground handling crews was not a factor in Qantas’s decision.

The airline and TWU have engaged in several court battles in the last year, including a clash over JobKeeper payments and sick leave allowances.

Despite an initial victory over the payment of JobKeeper to employees, the TWU lost on appeal by Qantas, and the union was also unsuccessful in its attempt to have stood-down workers receive sick leave pay.