Qantas has publicly acknowledged and accepted the ruling of the High Court on the airline’s decision to outsource its remaining ground handling function in 2020. This decision comes after the High Court upheld two preceding judgments made by the Federal Court on the matter.
Background of the Case
The core issue originated from Qantas’ decision in August 2020 to outsource its ground handling functions. The court found that the airline’s decision constituted the illegal firing of 1,700 baggage handlers, cleaners, and other ground staff.
The airline argued that the global scenario was grim at the time, with borders shut, widespread lockdowns, and no available COVID-19 vaccine. Given the daunting prospects of a prolonged crisis, Qantas justified its restructuring as necessary to ensure the airline’s survival and eventual recovery.
However, in its initial ruling, the Federal Court found the airline might have an unlawful motive alongside the legitimate commercial reasons Qantas presented for the outsourcing move. The suspected illegal intent was to circumvent future industrial actions by the Transport Workers Union of Australia. The TWU represented the Qantas ground-handling employees affected.
Validating this stance, the High Court has affirmed the Federal Court’s interpretation.
Qantas’ Stance and Apology
Reflecting on the matter, Qantas stated, “We deeply regret the personal impact the outsourcing decision had on all those affected, and we sincerely apologize for that.”
The previous ruling from the Federal Court dismissed the possibility of worker reinstatements. The current judgment paves the way for deliberations on potential penalties for Qantas. Additionally, considerations for compensating affected employees are now on the table. It’s worth noting that any compensation deliberations will consider redundancy payments Qantas has already disbursed.
Following the Federal Court’s original judgment in 2021, Qantas had prudently made provisions to manage this potential financial liability.
Navigating Turbulent Times
This decision comes on the heels of other troubles at Qantas. The ACCC recently filed court proceedings for violations of consumer protections. Former Qantas Group CEO Alan Joyce moved up his retirement to September 6. This came shortly after announcing that the airline would eliminate the expiry dates on COVID-19 credits. The ACCC had identified this as an issue and communicated its displeasure to Qantas. Vanessa Hudson took over the Managing Director and Group CEO role on that day. She must navigate this turbulence to keep the airline on a steady path.
However, Qantas has a sound financial base. The airline recently posted a significant profit of $2.47 billion. Importantly, the airline has already factored in compensation penalties it might need to cover. The airline’s decision to outsource ground service avoids potential flight disruptions. Despite negative headlines, Qantas remains stable for now. Critically, the airline must focus on rebuilding its positive public image at home.