Qantas savaged by Federal Court judge Michael Lee in final hearing of unlawful outsourcing case

Federal Court judge Michael Lee has dismantled Qantas’ handling of the unlawful outsourcing case, suggesting it lacked candour and was untruthful in its defence.

Federal Court judge Michael Lee has eviscerated Qantas for a “lack of candour” throughout a long-running unlawful outsourcing case where the airline is seeking to limit its penalty to no more than $80m of a maximum $121m.

The Transport Workers Union brought the case against Qantas in late 2020 after the airline announced it would outsource its entire underwing workforce made up of 1820 people to save $100m a year.

In a judgment tested by the Full Federal Court and the High Court, Justice Lee found Qantas could not prove it was not motivated by a prohibited reason, being a desire to avoid industrial action by TWU members.

After three days of hearings to decide what penalty Qantas should face for the unlawful behaviour, Justice Lee erupted over the way in which the airline had run its case suggesting it had not been truthful.

“The real issue in my mind after the benefit of hearing all the submissions is the lack of candour,” he said.

“The fact you have an organisation where you have things like the voiceover happen, you have things like what I’ve heard today where a very very precise mechanism has been put in place in order to then be presented to the court in inevitable litigation which departs from the truth.”

He suggested witnesses had been “sworn up to affidavits which did not reveal the truth,

the whole truth and nothing but the truth”.

“I’m presented with a case which shows a decision making process which is completely at odds with what in truth happened. That’s the most profoundly disturbing aspect of this.”

Baggage handlers were among the ground crews outsourced by Qantas in a 2020 decision that was found to have been made unlawfully. Picture: NCA NewsWire/Dan Peled

Barrister for Qantas Justin Gleeson SC submitted that Justice Lee should not make adverse serious findings about the way the case was conducted without identifying the individuals concerned and giving them the chance to respond, in the name of procedural fairness.

“That finding cloaked under Qantas’ approach to the case is necessarily a finding impugning individuals who ran that case before your honour who were employed at Qantas,” said Mr Gleeson.

“Your honour should not embark upon this approach. If your honour was contemplating it there would have to be an identification of the individuals who have a case to answer, and there would have to be an adjournment of the case for them to be given procedural fairness. Your honour should not embark upon any of that in our submission at this stage of this hearing.”

Qantas CEO Vanessa Hudson was not called to give evidence in the outsourcing case.

The tense exchange came after Justice Lee had previously expressed concern with how the case was being run, and his criticism of Qantas’ failure to put CEO Vanessa Hudson on the stand.

For the second straight day, Justice Lee questioned why the “obvious witness” was not called, meaning Ms Hudson, given her role of chief financial officer under then CEO Alan Joyce in 2020.

Instead, chief people officer Catherine Walsh gave evidence, despite the fact she was not employed by Qantas when the outsourcing decision was made.

“Now why shouldn’t I draw inferences from that, that Qantas want to do all they can to protect themselves from scrutiny?” Justice Lee asked.

Mr Gleeson responded that Ms Walsh had given “unchallenged evidence” about the cultural change being undertaken at Qantas under Ms Hudson’s leadership.

“When (Ms Walsh) took on the role, it was explained to her pellucidly clearly by Ms Hudson that a change had been made at Qantas and the proper dealing with employees was to be given central attention by Ms Walsh and the group leadership team,” said Mr Gleeson.

“That’s something that has happened and that’s in the CEO’s favour and in Qantas’ favour.”

Justice Lee adjourned his decision on the matter of penalty, and indicated it could be some time until he was in a position to deliver his judgment.

Originally published as Qantas savaged by Federal Court judge Michael Lee in final hearing of unlawful outsourcing case