A significant $90 million fine imposed on Qantas Airways could lead to former employees receiving up to $22,000 each as part of a compensation agreement. The Federal Court of Australia ruled that the airline’s decision to outsource 1,820 baggage handling, cleaning, and ground staff roles during the COVID-19 pandemic in 2020 was aimed at reducing union bargaining power during wage negotiations.
Justice Michael Lee described the penalty as the largest employer fine in Australia’s industrial history, citing the “sheer scale of the contraventions.” He directed that $50 million be allocated to the Transport Workers’ Union (TWU) for its role in exposing Qantas’ unlawful actions. The remaining $40 million is still under discussion regarding its distribution.
During a hearing, the TWU argued that it should receive a larger share of the fine, proposing that its portion should increase to $60 million. The union’s barrister, Noel Hutley SC, emphasized that the majority of the remaining funds should be directed towards affected workers. “Obviously, the vast bulk of (the remaining $40 million) should go to the employees,” Hutley stated, further asserting that if the court chose to allocate the entire amount to the workers, the union would support that decision.
The union also insisted that any interest accrued on the $40 million while awaiting distribution should benefit the workers. Hutley expressed concern that any delay in decisions regarding the funds could prolong the wait for payments and potentially incur additional legal costs.
While Qantas did not provide comment on the allocation of the $40 million, Justice Lee criticized the federal government for failing to investigate Qantas despite having the necessary powers. He made it clear that no outside party would benefit from the penalty, stating, “I don’t want any part of the penalty going to anyone except the affected workers… or the union.”
The affected employees are set to receive an average of about $65,900 each for economic loss, pain, and suffering, following Qantas’ commitment to establish a $120 million compensation fund. Legal costs related to administering this fund will be deducted from its accrued interest. To date, general damages of $9,000 have been paid to 1,759 former employees, totaling more than $15.8 million. Further assessments of economic and non-economic losses endured by these workers remain ongoing.
“This was an egregious wrong that had to be righted,” said TWU National Secretary Michael Kaine following the ruling. Justice Lee noted that some Qantas executives seemed more focused on the company’s reputation than on the plight of the affected employees. He expressed skepticism about the sincerity of Qantas’ remorse, saying, “I accept Qantas is sorry, but I am unconvinced that this measure of regret is not… ‘the wrong kind of sorry.'”
Qantas Chief Executive Vanessa Hudson acknowledged the court’s decision and apologized for the “genuine hardship” caused to many former staff members. The court was informed that Qantas had saved around $125 million in the year following the outsourcing decision, with potential annual savings of the same amount thereafter.
As the case progresses, affected workers and the union await a final decision on the distribution of the remaining funds, with the hope that justice will be served swiftly and fairly.
