In a landmark ruling, the Federal Court of Australia has ordered Qantas to compensate nearly 1,700 ground workers who were illegally dismissed during the COVID-19 Pandemic. This decision marks a significant victory for the affected workers and sets a precedent for employee rights in the face of corporate cost-cutting measures.
The Court’s Ruling
On 21 October 2024, Justice Michael Lee ruled that Qantas would be required to pay compensation to illegally sacked workers on varying degrees based on individual circumstances, specifically the hardship and distress caused by Qantas’ unlawful termination. The ruling underscores the significance of compensating workers not only for economic losses but also for the broader impacts of Qantas' actions on their livelihoods. Here, it was held that the compensation is to be limited to twelve months following the outsourcing decision, and that non-economic compensation amounts would be based on each of the test cases of $30,000, $40,000 and $100,000.
“I consider that the … amounts of compensation for non-economic loss reflect the harm sustained by each of the three individuals in a way that is appropriate, just and rational”, Justice Lee said.
Justice Michael Lee has also encouraged Transport Workers Union and Qantas to resolve any outstanding issues of compensation stating, “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”.
Background of the Case
This decision comes after a protracted legal battle stemming from Qantas’ decision to outsource ground handling operations between November 2020 and March 2021 (during COVID-19), effectively terminating the employment of almost 1,700 workers at eleven airports. Although Qantas justified the terminations due to cost-cutting measures necessitated by COVID-19 flight restrictions, Qantas did not replace the employee’s once the restrictions had ceased and instead continued to outsource ground handlers. In 2023, the High Court ruled in Qantas Airways Limited & Anor v Transport Workers Union of Australia [2023] HCA 27 that this conduct was illegal.
Qantas Response
On 21 October 2024, in accepting the Federal Court’s decision, Qantas released a public statement apologising to the affected former employees. Qantas Group Chief Executive Officer Vanessa Hudson stated, “We sincerely apologise to our former employees who were Impacted by this decision, and we know that the onus is on Qantas to learn from this”. Qantas has sought assistance from Transport Workers Union to expedite the compensation and has commenced undertaking an actuarial review to develop an estimate of the total compensation amount payable.
Notably, in its 2024 financial year results, released in August 2024, Qantas reported a full-year profit of $1.25 billion and had allocated $230 million in customer-restoration initiatives and provisions for penalties for the illegal sacking of ground handlers. Transport Workers Union has estimated the potential total compensation payout to be at around $100 million.
Broader Implications
The decision sends a strong message to corporate Australia about the consequences of unlawful employee termination. It highlights that adhering to labour laws, even during challenging economic times is of upmost importance and its abrogation incurs significant financial penalties.
What’s Next?
The Federal Court has ordered both parties to enter mediation and to use the three ‘test cases’ as a guide for determining compensation for all affected former employees. A separate hearing will be held at a later date to determine penalties, potentially bringing closure to a protracted legal dispute which has lasted over four years.
Justice Lee’s judgement not only vindicates the affected former employees, but also importantly underscores the power of collective action in protecting employee rights. As the aviation industry continues to recover from the impact of COVDI-19, this case will likely influence future labour relations and corporate decision making in Australia.
ABOUT THE AUTHOR
Isabella Tziolis assists as a paralegal in commercial, defamation, employment and general matters and is committed to supporting BlackBay Lawyers mission of delivering exceptional legal services. Her work focuses on assisting in providing comprehensive legal support, conducting extensive research, and offering strategic guidance to clients.
Isabella is currently studying a Bachelor of Laws and a Bachelor of Arts, majoring in Politics and International Relations at the University of New South Wales. Her academic and professional experience has fostered her high attention to detail and strong analytical skills which allows her to efficiently handle high-pressure situations and contribute to effective legal strategies.
