Qantas Fined US$59 Million for Illegal Layoffs During Pandemic

A court in Australia has ordered Qantas to pay a fine of A$90 million (approximately US$59 million) for unlawfully laying off 1,800 ground staff during the COVID-19 pandemic. This ruling, delivered on August 18, 2023, marks the conclusion of a five-year legal dispute regarding the airline’s treatment of its employees.

Justice Michael Lee of the Australian Federal Court emphasized the need for the penalty to serve as a “real deterrence” to companies considering similar violations of employment laws. The airline made the decision to terminate the employees and outsource their roles in August 2020, a time when Australia faced extensive lockdowns and border closures due to the pandemic. The court found that Qantas had acted illegally, disregarding the workers’ rights to collectively bargain or engage in industrial action, despite the airline’s claims of “commercial imperatives.”

In a significant ruling, the Federal Court dismissed Qantas’s appeal against the decision, reinforcing the gravity of the violation. Justice Lee criticized the airline’s litigation strategy and noted that while Qantas has introduced changes to its management, its expressions of regret appeared more focused on corporate image than genuine remorse for the impact on its former employees. He remarked, “I accept Qantas is sorry, but I am unconvinced that this measure of regret is not, at least in significant measure… the wrong kind of sorry.”

Qantas, which has been a pillar of Australian aviation for over a century, has struggled to maintain its reputation following the illegal layoffs. The airline has faced increased scrutiny due to rising ticket prices, poor service claims, and the selling of tickets for flights that had already been canceled. In 2023, Vanessa Hudson took over as CEO, succeeding Alan Joyce, who stepped down earlier than anticipated amid mounting criticism over the airline’s labor practices and customer service, despite reporting significant profits for shareholders.

In response to the court’s ruling, Qantas accepted the penalty, with Hudson acknowledging the hardship caused to many former employees and their families. “We sincerely apologize to each and every one of the 1,820 ground handling employees and to their families who suffered as a result,” she stated. Hudson emphasized that the airline has spent the last 18 months working to rebuild trust with its workforce and customers, highlighting this as a top priority moving forward.

The court’s decision stipulates that the fine will be paid in two parts: A$50 million will be allocated to the Transport Workers Union, while A$40 million will be reserved for future payments to the affected former employees. This fine adds to a previous compensation amount of A$120 million that Qantas agreed to pay last year to the laid-off workers.

Former Qantas employee Anne Guirguis, who worked for the airline for 27 years, expressed relief at the outcome. “It has been five long years. Today is a victory, not just for our colleagues but for all Australian workers,” she stated outside the court.

National Secretary of the Transport Workers’ Union, Michael Kaine, characterized the ruling as a “final win” for the workers. He highlighted the circumstances surrounding the layoffs, indicating that many employees learned of their job losses via public announcements rather than direct communication. “Qantas was not sorry to workers when it illegally outsourced these workers,” Kaine remarked, underscoring the lack of concern shown by the airline at the time of the layoffs.

As Qantas aims to navigate through its reputational challenges, the airline’s focus remains on improving relations with its employees and restoring trust among its customers.