New Qantas CEO Vanessa Hudson haunted by ghost of Alan Joyce

Chief executive Vanessa Hudson can’t blame the airline’s previous management for a legal loss that has now given unions the upper hand.

The problems are mounting sky high for new Qantas chief executive Vanessa Hudson, who now faces the challenge of rebuilding the airline’s tarnished reputation after giving the powerful industrial union the upper hand.

A resounding High Court loss underscores just how misguided Qantas’ management team under former boss Alan Joyce was to appeal to the top court of the land. It reinforces Joyce’s approach to never take a step back in his battles with unions.

Qantas was found to have unlawfully sacked more than 1700 baggage handlers and ground staff. Picture: NCA NewsWire/David Geraghty

But the decision to sack more than 1700 baggage and ground staff while being stood down had already been found unlawful by the Federal Court, then the Full Federal Court. And it takes a special kind of determination to take the matter further. Doing so has dramatically raised the stakes, which means the High Court loss represents a major own goal from Qantas that could come at a cost of more than $200m. But the loss stands to do far more long-term damage to the airline and new chief executive Hudson than had the matter ended at the Federal Court.

Unions will be boosted by the High Court win and will be looking to reassert their dominance on the airline after more than 15 years of bloody battles with former boss Joyce.

Remember Joyce was determined to show how he intended to run things early as chief executive taking the nuclear option against unions by grounding the entire Qantas mainline fleet. That move in 2011 remains a sore point with passengers who were caught up in the action, particularly those stranded overseas.

Former Qantas chief executive Alan Joyce took a hardline approach against unions. Picture NCA NewsWire/Aaron Francis

Hudson knows she needs to keep the airline running smoothly for customers but unions will increasingly flex their muscle to secure as many gains as possible for staff early on.

Hudson will need all her skills to show customers that Qantas now has a more softer image, but one that doesn’t give too much of the gains achieved in the past decade back to unions.

Instead of focusing on a rebuild, Hudson will be on the back foot. Unions too are looking for weakness on the board and are demanding chairman Richard Goyder steps down. Although the former Wesfarmers boss will play the long game and is determined to not be going anywhere, particularly while there is a transition to a new CEO.

Rebuild battle

And the outsourcing case represents a problem that is going to keep casting a shadow over Hudson as she sets about in the Qantas rebuild. She was part of the culture and the top management team that led to Qantas being on the nose with customers and regulators.

An outside CEO coming in would be able to blame the previous management team for everything and rebase expectations with workers, passengers and investors.

Hudson doesn’t have this luxury. As former chief financial officer, she too was part of Joyce’s inner-management circle through Covid and partly owns these decisions.

Last month Hudson called out Joyce’s impact on the airline telling investors Qantas is a better organisation due to Joyce “because our culture has gone from night and day to where we are today”.

This is why Qantas’ other big legal action, the ACCC allegations that the airline was selling tickets for flights it had already cancelled, represents a bigger danger for Hudson.

If the ACCC claims are proven and it is established that top management knew about the alleged behaviour, her tenure as CEO would be critically damaged. Remember the ACCC allegations are just that and have not been tested in court.

Unions will now be ready to flex their muscle against Qantas after the High Court win. Picture: NCA NewsWire / Christian Gilles

The High Court gave a sliver of acknowledgment to Qantas’ main argument, noting that the decision to outsource baggage handlers was based on “sound commercial reasons” in the midst of the Covid pandemic.

But the High Court agreed with the previous Federal Court judgements that the airline had crossed the line when it dismissed workers that had already been stood down. This deprived the workers of bargaining power extended to them under workplace rules. The High Court described Qantas’ case that argued stood down workers down don’t have full workplace protections as “flawed”.

For Hudson it is significant that the Qantas executive who was driving the outsourcing changes, Andrew David, is about to finish with the airline.

An earlier judgment by the Federal Court’s Justice Michael Lee said David’s evidence was not considered “entirely satisfactory”, and he found that the Qantas executive was unwilling “to make concessions from time to time”. David, the former boss of both domestic and international operations, flagged his retirement in February.

At the same time Joyce, who would have signed off on the decision and the subsequent legal challenges, brought forward his retirement this month.

Hudson, who was not named in the High Court action, has a full slate of new executives now place, with a new head of domestic, new chief financial officer, new head of international, a new boss coming at regional carrier QantasLink as well as the creation of chief people officer and chief risk officer.

It’s a new management team but passengers and regulators will be left wondering how much of Joyce’s combative culture has been left behind. And unions are ready to test this.

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Originally published as New Qantas CEO Vanessa Hudson haunted by ghost of Alan Joyce