Qantas moves to keep compo bill for outsourced workforce to a minimum

Qantas told the Federal Court that if it had not outsourced its ground handling operations in 2020, it would have done so the following year.

Qantas baggage handling operations were among those outsourced in late 2020 in a decision the Federal Court found was unlawful. Picture: Dan Peled/NCA NewsWire

Qantas has told the Federal Court that if it had not taken the decision to outsource the jobs of 1683 ground handling workers in late 2020, it would have done it 12 months later as the Covid pandemic continued to ravage the airline’s bottom line.

In hearings to determine what compensation should be paid to the former workers after the court found Qantas acted unlawfully, the airline is arguing it has limited liability to the ex-employees.

The Transport Workers Union was seeking vastly more compensation, claiming their members had considered their positions at Qantas “jobs for life”.

In order to help Justice Michael Lee decide upon an appropriate amount, both parties were presenting “counterfactual” scenarios, outlining what would have happened had the unlawful outsourcing decision not been made in 2020.

Justice Lee’s original judgment found Qantas could not prove it was not motivated by the desire to avoid industrial action by its ground crews who were due to negotiate a new enterprise agreement in 2021.

TWU assistant national secretary Nick McIntosh argued it was unlikely the ground handling workers would have staged industrial action in 2021, as a new pay deal was negotiated.

He said the TWU had spent $1m on an in-house bid to keep the ground handling work at Qantas, to show how important those jobs were to members.

“The last thing we want to do is run to industrial action,” Mr McIntosh said, pointing out that the last time ground crews went on strike at Qantas was in 2011.

Federal Court Justice Michael Lee at a conference in Melbourne. Picture: Aaron Francis

Qantas chief operating officer Colin Hughes said in the event new enterprise agreements had been negotiated with the TWU, he still would have recommended to his manager that ground handling operations be outsourced.

“I would’ve been making the case that the arguments we had for outsourcing in 2020 remained, because the financial targets that were set for the business wouldn’t have been met,” Mr Hughes said.

“Obviously the circumstances of the pandemic continued in 2021 and the commercial imperatives that existed in 2020, existed in 2021. That would’ve been the logic and the reason I brought to that conversation.”

It was also suggested much of the ground handling workforce would have remained stood down without pay during 2021.

Barrister Richard Dalton for Qantas pointed out the “sole decision maker” in the matter would still have been Andrew David, the then Qantas Domestic and International chief executive.

“On Mr David’s evidence (at a previous hearing) this outsourcing option would’ve been back under consideration (in mid-2021),” Mr Dalton said.

“Qantas was looking at drastic measures to stem losses including the sale of their Mascot premises and other cost reduction measures. This option would’ve been back on the table for consideration at that time.”

Justice Lee suggested it would have been helpful to hear “what (former CEO) Alan Joyce thought, and what the board thought” about the outsourcing decision.

Mr David, who retired from Qantas last year, was expected to give evidence at the hearing on Wednesday.

A Qantas spokesman said they wanted former ground handling employees to receive fair compensation as quickly as possible.

Court-ordered mediation between the TWU and Qantas led by CEO Vanessa Hudson, was unable to reach an agreement.