Qantas loses appeal against ‘illegal’ outsourcing of jobs

The airline will now go to the High Court to try to overturn a judgment that the outsourcing of 1600 jobs was illegal.

Qantas airport baggage handlers prior to the outsourcing of their jobs to companies like Swissport, Menzies and dnata.

Qantas will go to the High Court in an effort to overturn a court ruling that the airline’s outsourcing of more than 1600 ground-handling jobs was illegal.

On Wednesday, the Full Court of the Federal Court dismissed Qantas’s appeal against the judgment of Justice Michael Lee in July 2021, that found the outsourcing was motivated by a prohibited reason.

That reason related to a desire to eliminate the risk of ground-handling workers taking protected industrial action in 2021, when their enterprise agreement was due for renewal.

The Transport Workers Union went after Qantas following the outsourcing decision in late 2020 which saw the jobs of baggage handlers, cleaners and ground crews at ten airports contracted out to third party providers including Swissport and Menzies.

Qantas said the decision was solely due to the need to find substantial cost savings in the devastating Covid pandemic, with the outsourcing to save the airline $100m a year, plus $80m in new equipment.

But the TWU argued Qantas had used the pandemic to enact a long-term plan to get rid of a heavily unionised segment of its workforce.

Despite succeeding in having the outsourcing declared illegal, the TWU was unsuccessful in its campaign to have the court order the reinstatement of the workers by Qantas.

The Full Court judges, Darryl Ragiah, Mordy Bromberg and Robert Bromwich, dismissed the TWU’s appeal against the original finding that reinstatement would be “futile”.

With the company that employed the workers no longer in existence, and all ground equipment sold, the court found that if the affected employees were reinstated Qantas would as soon as legally possible retrench them.

TWU national secretary Michael Kaine congratulated workers on their “second win” against Qantas and called for the sacking of executives responsible for the outsourcing decision.

“After a horror 18-months having lifelong careers savagely and illegally ripped away from them, workers stood tall and took on one of the harshest and most powerful companies in the country,” said Mr Kaine.

“This is an emphatic ruling – a unanimous decision from four Federal Court judges. There is only one appropriate response from the Qantas board – heads must roll.”

However, he said it was regrettable the “flawed legal system” was unable to reverse the decision by giving workers their jobs back.

“The TWU vows to take this injustice to compensation hearings and give it all we’ve got to get workers what they are owed for the pain and anguish they’ve suffered,” said Mr Kaine.

Qantas declared it would seek leave to appeal the judgment of the Full Court to the High Court, and wanted a stay on any further hearings to decide on compensation for workers and a fine for the airline.

“Qantas has always said the decision to outsource our ground handling function was based on lawful commercial reasons in response to the unprecedented impact of the Covid crisis,” said a statement issued after the Full Court judgment.

“Prior to the pandemic, Qantas was actively recruiting into its ground handling function and investing in new equipment – a sign that we had no intention of outsourcing.”

The airline went on to say the ruling upholding the court’s refusal to order reinstatement of the outsourced workers, showed the TWU had been giving its members “false hope of getting their previous jobs back”.

“The TWU has pushed a lot of misinformation on this issue. Before the pandemic, we had outsourced ground handling in 55 of the 65 Australian airports we operated from,” said the statement.

“During the pandemic, we outsourced the ground handling at the remaining 10 airports. The companies now doing this work perform the same function for most other airlines in Australia and most airlines worldwide.”

A spate of ground handling mishaps over the busy Easter period, including multiple instances of mislaid bags and a couple of collisions with stationary aircraft, prompted further accusations from unions that the Qantas outsourcing was a mistake.

The TWU suggested the loss of experience and loyalty in ground handling operations had contributed to the issues, affecting thousands of passengers.