‘Wrong kind of sorry’: Qantas hit with $90m penalty for illegally sacking 1800 ground staff

Qantas has been hit with a landmark $90 million fine for illegally sacking more than 1800 ground workers five years ago, after a Federal Court judge expressed the airline had shown the “wrong kind of sorry”.

Justice Michael Lee ordered Qantas to pay $50m to the Transport Workers Union — which brought the case — saying it “would facilitate and promote” unions to take on similar cases where the Fair Work Ombudsman fails to act.

In a statement, Qantas said the company accepted the penalty and judgement which held it “accountable for our actions that caused real harm to our employees”.

It concludes a saga that began in 2020, when Qantas outsourced baggage handlers, cleaners and other ground staff, axing more than 1800 staff, as COVID-19 took a toll on aviation.

Qantas’ appeal to the High Court was unsuccessful, paving the way for the penalty to be awarded.

“Although the outsourcing decision was a single act, it was a carefully planned act directed at, and affecting, a very large number of employees,” Justice Lee said.

He accepted that Qantas was sorry for the illegal outsourcing, but wasn’t convinced the measure of regret was “significant” and described it as “the wrong kind of sorry”.

The fact former Qantas boss Alan Joyce’s name was kept out of direct involvement in the outsourcing decision also left Justice Lee “with a sense of disquiet and uncertainty as to precisely what went on within the upper echelons of Qantas leading up to the outsourcing decision”.

The union sought the maximum penalty of $121m, while Qantas urged Justice Lee to impose a “mid-range” fine of between $40m and $80m.

At $90m, the penalty represents 75 per cent of the maximum and is the biggest employer penalty in Australian corporate history.

The remaining $40m is yet to be allocated, but could go back to the 1820 workers who lost their jobs.

Qantas late last year reluctantly agreed to pay $120m in compensation to the sacked workers, taking the overall bill for its wrongdoings to $210m.

“It will send a message to Qantas and other well-resourced employers that not only will they face potentially significant penalties for breaches of the (Fair Work act), but those penalties will be provided to trade unions to resource those unions in their role as enforcers of the (FWA),” Justice Lee said on Monday.

He also criticised Qantas chief Vanessa Hudson for failing to appear before the court.

Justice Lee noted Qantas chief people officer Catherine Walsh during the hearings apologised for the company’s behaviour, but “it seemed to me obvious that the person who could give the most direct and compelling evidence of corporate change and contrition” was Ms Hudson.

“Going back to the issue as to whether Qantas is truly contrite, I have hesitation in reaching a conclusion,” he said.

Ms Hudson on Monday apologised for the “genuine hardship” it caused its former team and their families.

“Over the past 18 months we’ve worked hard to change the way we operate as part of our efforts to rebuild trust with our people and our customers. This remains our highest priority as we work to earn back the trust we lost,” she said.

The national carrier is working to regain the public’s trust after a raft of scandals left the airline’s reputation in tatters.

These included a botched COVID-19 credits program and and a post-pandemic restart of domestic and international services marred by poor customer service, lost luggage, flight delays and cancellations.

Maurice Blackburn principal Josh Bornstein, who represented the TWU in the case, said the record penalty meant corporate Australia was on notice that courts would not tolerate blatant attacks on workers’ rights.