Qantas is confronting the possibility of a substantial financial penalty, with the Federal Court scrutinising the airline’s expressions of remorse over the unlawful outsourcing of nearly 1,700 ground handling workers in 2020.
In penalty hearings that began on Monday, Justice Michael Lee expressed scepticism of Qantas’ contrition. The airline’s chief people officer, Catherine Walsh, acknowledged the wrongdoing, saying Qantas was “deeply sorry” for the impact on affected workers and their families.
However, Justice Lee questioned the sincerity of the apology, noting that Qantas had previously contested compensation claims and only recently agreed to a $120 million settlement for the affected employees.
Seeking the maximum penalty
The airline is facing the prospect of significant fines after the High Court last year upheld a ruling that its decision to outsource baggage handlers and a ground grew at 10 airports during the COVID-19 pandemic breached the Fair Work Act. Justice Lee previously awarded each of the fired workers between $30,000 and $100,000 for hurt and suffering.
The Transport Workers Union (TWU), representing the outsourced employees, is advocating for the maximum penalty of $121 million, saying the outsourcing was the largest Fair Work Act violation in Australian history. TWU barrister Noel Hutley argued that Qantas prioritised profits over lawful conduct and attempted to fabricate justifications for its actions to mislead the court.
Justice Lee highlighted concerns about Qantas’ internal processes, suggesting the airline engaged in a cover-up by manipulating documentation ahead of the outsourcing decision. He emphasised the need for a strong message to deter corporate misconduct, indicating that a significant penalty may be warranted.
Dual motivation
Qantas maintains that the outsourcing decision was driven by sound commercial reasons amid the challenges posed by the COVID-19 pandemic. However, the Federal Court previously found that the airline’s actions were also motivated by a desire to prevent employees from engaging in protected industrial action, a violation of the Fair Work Act.
A $121 million fine would be the largest ever levied on an Australian company.
The hearings continued Tuesday, with closing submissions expected from lawyers for Qantas and the TWU.