Qantas has been fined a record $90m for illegally firing 1,820 baggage handlers and other ground staff in 2020, taking the cost of its controversial outsourcing decision to more than $200m.
Justice Michael Lee on Monday handed down his decision on the penalty, nine months after Qantas and the Transport Workers’ Union agreed the airline would pay $120m in compensation to the sacked workers.
Reading his judgment in the federal court in Sydney, Lee said the $90m penalty was “slightly less than 75% off the maximum penalty”, and that $50m of the penalty would go to the TWU.
Lee said allocating a significant proportion of the fine would incentivise unions to pursue potential breaches of the enhance the Fair Work Act when the federal ombudsman failed to act, as he said it had in the case of Qantas.
“It will send a message to Qantas and other well-resourced employers that not only will they face potentially significant penalties for the breach of the act, but those penalties will be provided to trade unions to resource [them] to fulfil their statutory roles as enforcers of the act,” he said.
Lee reserved his decision on who should receive the other $40m.
He described the lengthy legal battle between the TWU and Qantas as “no ordinary case” and said he had “hesitation in reaching a conclusion” as to whether Qantas was “truly contrite or rather engaging in performative remorse”.
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“I do think persons of responsibility within Qantas do now have some genuine regrets but this more likely reflects the damage this case has done to the company, rather than a remorse for the damage done to the affected workers,” Lee said.
Lee said he felt a “sense of disquiet and uncertainty as to precisely what went on within the upper echelons of Qantas leading up to the outsourcing decision” and described the airline as “the wrong kind of sorry”.
Among the reasons Lee gave for imposing the record penalty was the airline’s attempts to obscure the decision-making process behind the outsourcing and the role the then chief executive officer, Alan Joyce, had played.
Lee was also critical of the way Qantas handled the legal process, saying its public relations department had rushed to send out press releases “spinning” court decisions in the airline’s favour.
He criticised the decision not to have Vanessa Hudson, the airline’s former chief financial officer and now chief executive, testify in court.
Lee said her evidence would have helped him assess whether the airline’s “expressions of contrition” and its promises of cultural change were genuine.
After the decision, Hudson said the outsourcing decision had “caused genuine hardship” for the affected people.
“We sincerely apologise to each and every one of the 1,820 ground handling employees and to their families who suffered as a result,” she said.
“Over the past 18 months we’ve worked hard to change the way we operate … This remains our highest priority as we work to earn back the trust we lost.”
The $90m penalty will be paid in accordance with the orders of the court.
Qantas has also paid $120m into the compensation fund for all affected former employees, which is being administered by Maurice Blackburn.
The TWU national secretary, Michael Kaine, said the union had won a “David and Goliath” battle and secured “the most significant industrial outcome in Australia’s history”.
Addressing the media, Kaine would not be drawn on how the TWU would spend its $50m windfall other than to suggest it would be used for other industrial campaigns representing its members.
“We will keep fighting our industrial fights,” he said.
Kaine said the TWU would submit to the court that the unallocated $40m of the $90m fine should go towards additional support for the affected workers.
Sacked workers still struggling
Anne Guirguis, who cleaned international aircraft for Qantas until the airline sacked her in 2020, told journalists she felt “relief” over the penalty decision.
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But she said she and many of her former colleagues had not been able to find new jobs. “All over the age of 50, it is impossible,” she said.
Standing beside her, Don Dixon, who had been a Qantas baggage handler, said he hoped the airline would learn from this and change the way it treated its staff.
“It is difficult getting a job at our age now, most people are 60 or above,” he said. “To be retrained at this time in your life and go to an employer and say ‘I was 20 years plus working for formerly the greatest company in this country … I service an aircraft, do you happen to have a plane?’”
The TWU had sought the maximum penalty of $121m, while Qantas had urged Lee to impose a “mid-range” penalty of between $40m and $80m.
Josh Bornstein, the Maurice Blackburn principal lawyer who represented the TWU in court, described Qantas as the country’s “fiercest legal opponent” and said the $90m penalty was the largest in Australia’s corporate history.
“It is also perhaps the darkest day in Qantas’s 105-year history,” he said.
The penalty decision comes about nine months after Qantas and the TWU agreed on a $120m payout for the sacked workers.
While the true cost of the illegal outsourcing has far eclipsed the $70m Qantas had previously budgeted to cover it, the saga does not appear to have put a serious dent in the carrier’s profits.
Qantas, which is due to release its financial results for the past year on 28 August, in February reported a bumper $1.39b in pre-tax profit for the six months between July and December last year.
In 2024, Qantas posted a $2.1b annual underlying profit. In 2023, the airline delivered a record $2.47b profit as it emerged from the pandemic era. In 2019, the year before it illegally sacked 1,820 staff, the airline made $1.30b in pre-tax profit.
The penalty decision wraps up a five-year legal battle that began when the TWU took the airline to court, arguing that the outsourcing was unlawful and motivated by the fact that many of the affected workers were union members with stronger bargaining power.
The federal court ruled in favour of the TWU and found the outsourcing contravened the Fair Work Act. Qantas appealed against the decision to the full bench of the federal court and later the high court – both of which were unsuccessful.
After the appeal, the two parties spent more than a year in mediation and remedy hearings to determine how much Qantas would have to pay the outsourced workers for economic losses linked to lost wages.
‘A ruthless, calculated act’
The New South Wales Labor senator Tony Sheldon, a former TWU national secretary and longtime Qantas adversary, said the $90m penalty against the airline confirmed workers had been “sacked in a ruthless, calculated act of corporate cost-cutting”.
Qantas said it accepted the federal court’s decision and would pay the $90m penalty according to the court’s orders.
Last year Qantas agreed to a civil penalty of $100m and $20m in compensation for allegedly selling tens of thousands of tickets on flights that had already been cancelled.
