Last week, the High Court of Australia ruled that airline Qantas had illegally sacked nearly 2,000 former ground crew during the Covid-19 pandemic.

The ruling upheld two prior judgements by the Australian Federal Court and Full Court of the Federal Court, which found the airline had taken unlawful adverse action, according to the Recruitment, Consulting & Staffing Association. The Australian Financial Review reported that the ruling also found Qantas was partly motivated to outsource baggage handlers and cleaners to avoid industrial action.

In 2020, Qantas decided to outsource its ground handling operations. At the time, affected staff were precluded from taking protected industrial action. In addition, the decision coincided with the relevant Qantas enterprise agreements’ nominal expiry dates.

In response to the decision, the Transport Workers’ Union (TWU) commenced proceedings in the Federal Court alleging that Qantas made its decision (at least in part) because it knew that the relevant employees would soon become eligible to engage in enterprise bargaining and take protected industrial action. In short, the TWU argued that Qantas made the decision to prevent the employees from exercising their future workplace rights.

While the Federal Court accepted Qantas’ evidence that financial pressures (with regard to the Covid-19 pandemic) were a significant motivator in its decision, it also found that one of the substantial and operative reasons for the decision was, in fact, Qantas’ desire to prevent the employees from exercising their workplace rights.

Qantas appealed the decision of the Federal Court to the Full Court of the Federal Court. However, the Full Court upheld the initial decision.

Qantas appealed the decision of the Full Court of the Federal Court, arguing that the prohibition on taking adverse action relates only to workplace rights that exist at the time the adverse action is taken, not future or potential workplace rights.

While the High Court acknowledged Qantas had ‘valid commercial justifications’ for its outsourcing decision, it ultimately agreed with the Federal Court that Qantas had chosen to outsource its baggage handlers and cleaners to avoid industrial action. 

Qantas says it will move swiftly to compensate the nearly 1,700 workers. The case will also return to the Federal Court. Justice Michael Lee will determine the scale of fines to be levied against Qantas for breaching the Fair Work Act and compensation for the 1,683 sacked workers.

Lawyers for the TWU have indicated they will seek the maximum AUD 100 million (USD 64.6 million) penalty, and the court will factor in economic losses, including redundancy payments already made and wages foregone, as well as mental suffering in deciding compensation, potentially amounting to tens of thousands per worker.

The airline ‘sincerely apologised’ for the sackings and said it would reach out to the Transport Workers Union ‘to discuss reaching agreement on a settlement for the people involved as reasonably and quickly as possible’.

Meanwhile, the Australian Financial Review reports that lawyers have warned that last week’s High Court judgment on Qantas’ outsourcing will inspire claims against bosses who block the exercise of future workplace rights. They say the ruling poses a major threat to the commonplace sacking of probationary workers days or weeks before they hit the six-month threshold to claim unfair dismissal.