Qantas loses appeal in Federal Court in legal battle over ground worker outsourcing

The Federal Court has delivered its decision in a long legal battle sparked when Qantas laid off 1,600 employees.

Qantas has failed in its attempt to convince the Federal Court that it did not act unlawfully by outsourcing more than 1,600 ground staff during the pandemic.

The airline faces financial penalties for its decision to lay off baggage handlers, ramp attendants and cabin cleaners at the end of 2020 and instead use hired labor services from third-party contractors.

Qantas says it will now take its legal fight to the High Court.

The Transport Workers Union filed a lawsuit in Federal Court against the airline over the outsourcing decision and won a partial victory in July 2021.

Judge Michael Lee at the time ruled that the carrier had acted illegally and was partly motivated by the fact that many of the dismissed workers were union members with stronger bargaining ability.

The full Federal Court on Wednesday unanimously dismissed Qantas’ appeal against the decision, following a long-running legal dispute between the airline and the TWU.

Judges Mordy Bromberg, Darryl Rangiah and Robert Bromwich found Qantas pursued the outsourcing in part to prevent ground handling crews from exercising their right to take protected industrial action.

However, the judges dismissed TWU’s cross-appeal that the dismissed workers should return to their jobs, in part because of the significant cost to Qantas and the fact that the company that had employed them had been dissolved.

TWU National Secretary Michael Kaine congratulated the workers on their “second victory”, while criticizing the airline.

“Since outsourcing Qantas has lost its esteemed security rating, a number of serious security breaches have been reported,” Mr Kaine said.

“And passengers have suffered long delays, lost luggage and damaged property in the recent airport chaos.”

Qantas senior management argued that outsourcing was a difficult but necessary decision to recover costs lost during the Covid-19 pandemic.

“Qantas has consistently stated that the decision to outsource our ground handling function was based on legitimate business reasons in response to the unprecedented impact of the Covid-19 crisis,” a spokesperson said on Wednesday.

“Before the pandemic, Qantas was actively recruiting into its ground handling function and investing in new equipment – a sign that we had no intention of outsourcing.”

Chairman Richard Goyder told the airline’s annual general meeting in November that Qantas “fundamentally” disagreed with the Federal Court’s initial judgment.

He said the airline was only motivated “for legitimate business reasons, including saving $100 million a year in the midst of a global pandemic.”

“While the TWU is pushing for reinstatement, we no longer have a ground handling company to reinstate former employees, nor the equipment to do the job,” Mr Goyder said at the time.

In December, the Federal Court ruled that Qantas did not need to reinstate the workers to their former jobs, instead financial compensation being the appropriate remedy.

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