Qantas has today lost its appeal to the High Court for illegally sacking 1,700 baggage handlers, cleaners and ground staff, and calls for a clean-out of the airline’s board have reached fever pitch.
Qantas has now been found guilty by the Federal Court, the Federal Court of Appeals and Australia’s highest court in a devastating unanimous decision by the seven justices in a case brought by the Transport Workers’ Union (TWU). The national carrier is now on the path to paying the multimillion-dollar legal bill on both sides, compensation to workers, and to clawing back bonuses from senior executives.
During the court hearings, Qantas conveniently maintained that the “sole decision-maker” in the matter was domestic and international division CEO Andrew David, who leaves the company this month — but the strategy clearly came from the top of the company.
Qantas chairman Richard Goyder and the entire board must be replaced by new directors, including a worker representative, after the High Court today unanimously upheld two Federal Court verdicts that Qantas illegally outsourced 1,700 workers, the TWU said.
The decision is the latest blow to the airline, already under fire for selling tickets for 8,000 flights it allegedly knew were already cancelled in 2022, and has significantly amplified the already tumultuous start to new CEO Vanessa Hudson’s administration.
“You owe these workers and their families a deep and sincere apology,” TWU national secretary Michael Kaine told Hudson.
“These workers have been put through hell. Their families have been put through hell. Their lives have been dislocated. Some of them forever. Separations. Loss of property. That’s the consequence of this illegal decision. You need to apologise to these workers straightaway. And not just in words, but in actions.”
The decision should see the removal of senior staff and legal advisers from the company, and may well be the final nail in the coffin for Goyder and many of his board members, who backed the strategy. The company has spent millions of shareholder funds fighting the TWU, which has scored a major victory for Qantas staff and Australian workers.
Qantas staff are also hopeful that the decision will see a much-needed clean-out at the company. “Good that this didn’t go Qantas’ way. Pity Joyce wasn’t here to face the fire that he caused. Hopefully some more heads will roll”, one engineer said.
A Qantas pilot said: “The company had no moral compass and would make Gordon Gekko blush.”
Today’s decision will also serve as a wake-up call for corporate Australia. As Josh Bornstein, partner at law firm Maurice Blackburn who ran the TWU case, said: “Had the appeal succeeded, it would have greenlighted the further de-unionisation of the labour market by big business.”
“When companies outsource workers like Qantas, they effectively avoid having to bargain with their labour. Instead, they engage labour hire agencies and dictate to those agencies what they are willing to pay for labour. Outsourcing has been one of the reasons that employees have lost the ability to obtain real wage increases. Qantas engaged in a collective bargaining avoidance scheme and, thankfully, the High Court has recognised that it was illegal.”
The Federal Court found that during the height of the coronavirus pandemic, when most aviation was shut down, Qantas seized on a “vanishing window of opportunity” to get rid of its unionised baggage handlers, sacking the workers when they were deprived of bargaining power.
Qantas counsel Justin Gleeson SC told the High Court at its hearing in May that the airline was “bleeding cash” due to the pandemic. Since then it has posted a profit of almost $2.5 billion for the 2023 financial year.
Qantas received $2.7 billion in taxpayer subsidies throughout the pandemic, $856 million of which was JobKeeper to keep workers employed — the highest amount of JobKeeper paid to any company. Yet, by August 2021, 9,400 employees had left Qantas following redundancies and outsourcing.
Qantas argued it could not have breached employee rights, as employees did not have the right to take protected industrial action at the time of the decision to outsource.
“The issue before the High Court was whether s 340(1)(b) of the act prohibited a person from taking adverse action against another person for the purpose of preventing the exercise of a workplace right that might arise in the future. The High Court unanimously held that it did and, in so doing, rejected Qantas’ contention that s 340(1)(b) only proscribed adverse action for the purpose of preventing the exercise of a presently existing workplace right,” the High Court said in a summary of its judgment.
Bornstein said Qantas had profited by dragging out the case for three years. “Qantas argued in the High Court that it should be permitted to sack workers merely because they wanted to bargain with the airline.”
“Qantas has fought this case every step of the way. For three long years, the sacked workers have waited for justice. During that time, the company has profited significantly from its illegal conduct”.
“The case isn’t over. Our legal team will now ask the Federal Court to hear claims for compensation for all adversely impacted workers and then seek a substantial penalty against Qantas,” said Bornstein.
Since the outsourcing, Qantas’ service has nosedived, TWU said, with complaints increasing 70% in 2022 amid high cancellations, delays and lost baggage. Company sources said that the only answer from Qantas’ airport managers, 10 days ago, was to “get Dnata [a ground handling outsourcer] to reduce delays”.
“The decision to outsource the remainder of the airline’s ground handling function was made in August 2020, when borders were closed, lockdowns were in place and no COVID vaccine existed. The likelihood of a years-long crisis led Qantas to restructure its business to improve its ability to survive and ultimately recover,“ Qantas said in a brief statement. “As we have said from the beginning, we deeply regret the personal impact the outsourcing decision had on all those affected and we sincerely apologise for that.”
“When you decide to fight Qantas, you know you have to throw everything at it … A real David and Goliath struggle, but it shows what workers can achieve when they pull together and join together and stand up for what is right through the union,” ACTU boss Sally McManus said.
Qantas faces three further court challenges: record penalties of $600 million sought by the ACCC for selling alleged cancelled flights, a criminal prosecution from the NSW safety regulator for standing down a health and safety representative during the pandemic, and a class action from angry customers who say they were misled and denied refunds.
Crikey has learned from staff based at Sydney Airport that former CEO Alan Joyce boarded an Emirates flight to Dublin the day he departed the company, accompanied by a security detail so he did not “have to interact with other passengers or onlookers”.
Are you happy to see the High Court side with workers? Let us know your thoughts on the case — and on Qantas in general — by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
