Outsourced Qantas workers to have compo capped after Federal Court ruling

Qantas faces a hefty compensation bill for unlawfully outsourced workers but not as much as the TWU might have liked after a Federal Court ruling.

Federal Court judge Michael Lee has found Qantas would have outsourced its ground handling workforce within a year of doing so unlawfully, in a ruling that will likely limit compensation for the affected employees to about a year’s pay plus a sum for non-economic loss.

Based on amounts awarded to three “test cases” for non-economic loss, of $30,000, $40,000 and $100,000 respectively, it was likely Qantas would face a significant bill for the 1683 workers it axed in late 2020.

Justice Lee said the total amount was for Qantas to determine with the Transport Workers Union, and urged them to finalise the case promptly after four years of legal battles.

“Without assigning blame to either party, hopefully some common sense can prevail after all the disputation that has taken place, including three separate hearings, six first instance judgments, three appeals — two by Qantas and one by the union, various notices of intention and interlocutory dispute,” said Justice Lee.

“Vast legal costs have been expended, and particularly by Qantas, who have retained no less than five senior counsel during the course of the matter and numerous solicitors from one of Australia’s pre-eminent law firms.”

In his 70 page judgment, Justice Lee said both sides had “engaged in rhetoric about being willing to resolve all issues with promptitude” and now was the time for them to do so.

“It may be a triumph of hope over expectation, but my desire is for the court to move quickly to resolve any penalty and the balance of compensation issues,” added Justice Lee.

“Apart from any public benefit, finality would help bring a degree of closure to those workers who’ve been wronged, particularly for those who’ve experienced financial and emotional distress.”

Qantas ground handling workers would have lost their jobs with the airline within a year of the unlawful outsourcing decision, the Federal Court has found in determining compensation. Picture: Gaye Gerard

The TWU took action against Qantas in 2021, after the jobs of 1683 ground handling employees were contracted out to third party operators including Swissport and Menzies.

Qantas claimed the decision was purely commercial, and would deliver savings of $100m a year, considered crucial to the airline.

But the TWU argued Qantas was using the opportunity presented by the Covid pandemic to enact a long-held plan to get rid of the below the wing workforce, to minimise the union’s influence and limit industrial strife.

Justice Lee found Qantas could not prove it was not motivated by unlawful reasons for the outsourcing, in a decision that was upheld by the Full Federal Court and the High Court. 

Justice Lee then ordered Qantas CEO Vanessa Hudson to take part in discussions with the TWU to determine compensation for the outsourced workers.

The discussions failed, and the matter returned to court earlier this year.

The TWU argued that the workers would have had jobs for life if the outsourcing had not occurred when it did, but Qantas argued the move would have been made at another time, for lawful reasons.

In his judgment on Monday, Justice Lee said he was convinced Qantas would have moved to outsource by the end of 2021, had it not done so unlawfully in late 2020.

The matter will return to the Federal Court on November 15 at which time Justice Lee expected a decision on final compensation for the three test cases.

TWU national secretary Michael Kaine said Monday’s decision was “another victory for the workers after the hell Qantas had put them through”.

“Qantas says it’s turned over a new leaf. Well, it’s time to prove it,” Mr Kaine said.

“After relentlessly prolonging this case and denying workers justice, Qantas must do everything in its power to ensure appropriate compensation to workers. They should not have to suffer a day longer after the last four years of anguish.”

Ms Hudson again apologised to the outsourced workers and pledged to expedite compensation payments.

“We recognise the emotional and financial impact this has had on these people and their families,” said Ms Hudson.

“We hope that this provides closure to those who have been affected.”

Qantas increased its provision for the matter by $70m in its full year results delivered in August but has not revealed the full amount it has set aside.

The TWU previously indicated it expected Qantas to face a bill of more than $200m for the case.

Originally published as Outsourced Qantas workers to have compo capped after Federal Court ruling