Airlines giant Qantas fined a substantial amount of $58 million for terminations during the pandemic, receiving heavy criticism from the judge.
Qantas Airways has been ordered to pay a record-breaking fine of A$90 million ($58.64 million) by the Australian Federal Court for illegally dismissing 1,820 ground staff during the COVID-19 pandemic in 2020. The airline’s senior management decided to sack these workers and outsource their roles to contractors amid the pandemic's severe impact on aviation, a move the court found to be "adverse action" that breached Australia’s Fair Work Act by preventing employees from exercising workplace rights and unionising.
The Transport Workers’ Union (TWU) brought the case against Qantas, arguing that the layoffs were intended to avoid upcoming pay and condition negotiations and potential strikes. The Federal Court judge, Michael Lee, harshly criticized Qantas’s corporate culture and aggressive litigation strategy, highlighting a lack of genuine contrition from the airline despite its public apologies. He emphasized that the penalty size—about 75% of the maximum possible—was necessary to ensure the fine would not be seen as "the cost of doing business."
Key details:
- The layoffs happened in late 2020 during pandemic lockdowns and border closures when no vaccine was yet available.
- Qantas initially appealed a 2021 court decision that had ruled against it, but its High Court appeal failed.
- The court ordered A$50 million of the fine to be paid to the TWU, with the remainder potentially distributed to affected workers after further hearings.
- This fine is in addition to a previous A$120 million compensation agreement Qantas reached with the dismissed employees.
- Qantas CEO Vanessa Hudson issued a formal apology following the ruling, acknowledging the harm caused.
The case represents the largest penalty imposed under Australian labor laws for such violations and serves as a significant legal precedent emphasizing that unlawful mass dismissals during crises will face severe consequences. The court also criticized Qantas for a lack of contrition and its litigation strategy.
Michael Kaine, the national secretary of the TWU, commented on the decision, "Against all the odds, we took on a behemoth ... that had shown itself to be ruthless, and we won." Shae McCrystal, a labor law professor at the University of Sydney, added that the fine signals a message to employers that if they break the law, trade unions may receive penalties to assist in enforcing the act. Maurice Blackburn Lawyers, which represented TWU, stated that the record-breaking penalty reflects the monumental scale of Qantas' wrongdoing.
The airline has stated it will pay the fine as ordered.
The airline's aggressive strategy in dismissing its ground staff during the COVID-19 pandemic, resulting in a massive fine of A$90 million ($58.64 million) by the Australian Federal Court, indicates that businesses engaging in adverse actions that breach labor laws, such as preventing employees from exercising workplace rights and unionizing, will face significant financial penalties. This fine, about 75% of the maximum possible, is a message to both Qantas and other businesses that such actions could be seen as the 'cost of doing business,' but the court has emphasized that it is not.
