Qantas illegal outsourcing to cost airline $120m in compensation for affected workers

Qantas can finally draw a line under an ugly episode in its history after agreeing to pay $120m in compensation to outsourced ground handling workers.

After a drawn out legal process, the Transport Workers Union and Qantas have reached agreement on a $120m compensation package for workers whose jobs were illegally outsourced at the height of the Covid pandemic.

The decision means Qantas can finally draw a line under an ugly episode in its history and head into 2025 with clear air.

Under the deal, law firm Maurice Blackburn will administer a fund on behalf of the union, and pay compensation directly to the 1683 former ground handling workers from early next year.

The $120m will cover both economic and non-economic losses for the workers, compensation to the TWU, as well as the costs of managing the distribution of funds.

It’s understood the individual amounts will vary considerably, with some of the former Qantas workers to receive as little as $10,000 and others to get a lot more.

Qantas Group chief executive Vanessa Hudson said it was an important step in bringing closure to the individuals affected by the outsourcing decision.

“I want to reiterate our sincere apologies to those impacted and their families,” said Ms Hudson.

“We know this has been a difficult period for those affected and are pleased we have been able to work closely with the TWU to expedite this process and resolve it ahead of Christmas.”

Qantas CEO Vanessa Hudson at the airline’s AGM in Hobart. Picture: Nikki Davis-Jones

TWU national secretary Michael Kaine said delivering justice to the workers was the first step in turning Qantas around, and he warned current leaders against using the same tactics.

“There’s still a long way to go to bring back the flying kangaroo Australians used to love,” Mr Kaine said.

“It is encouraging new CEO Vanessa Hudson has agreed to establish a pool to ensure these workers receive justice.”

The TWU brought the lawsuit against Qantas in 2021, after the jobs of 1683 cleaners, ground crews and baggage handlers were outsourced to companies including Swissport, Menzies and dnata.

Qantas claimed the outsourcing was purely about saving the airline $100m per year at a difficult time for the aviation industry.

However, the Federal Court found Qantas was motivated by unlawful reasons, including a desire to avoid industrial action by the heavily unionised workforce.

Qantas appealed the decision to the full Federal Court and the High Court, with both upholding the original judgment by Justice Michael Lee.

Last month Justice Lee urged the TWU and Qantas to work out how best to compensate the workers themselves, with the two parties finally reaching agreement on Tuesday.

Mr Kaine said the former employees had “helped build the Spirit of Australia, working many decades to help make Qantas a national icon”.

“They’ve stood by each other during what for some has been the most difficult times of their lives, through family breakdowns, financial stress and mental hardship,” he said.

“Soon these brave men and women will receive long-awaited compensation in accordance with the principles set out in the court’s decision.”

A separate hearing would be held to determine penalties at a date to be advised by the Federal Court.

Originally published as Qantas illegal outsourcing to cost airline $120m in compensation for affected workers