Background
The $90 million fine was imposed by the Federal Court of Australia following Qantas’ decision in November 2020 to outsource its ground handling operations at ten Australian airports to several third-party ground handling companies. This decision led to the dismissal of 1,820 Qantas ground handling employees.
In July 2021, the Transport Workers’ Union of Australia challenged Qantas’ decision. Following a lengthy court process, including a High Court challenge, it was found that the outsourcing decision constituted adverse action, contravening the Fair Work Act 2009 (FWA).
Specifically, the FWA provides that a person must not take adverse action against another person to prevent the exercise of a workplace right by the other person. Here, the relevant workplace right was the employees’ ability to organise and engage in protected industrial action and participate in bargaining for an enterprise agreement in 2021. It was found that Qantas made the outsourcing decision to prevent protected industrial action from occurring in the future.
In total, there were 1,820 contraventions of the FWA. The Union described Qantas’ breaches as the largest and most significant contraventions of the general protections provisions of the FWA and sought the maximum penalty available of $121,212,000.
The $90 million fine
Qantas accepted that a substantial penalty should be imposed but maintained that the case had already served as a ‘wake-up call for corporate Australia’. Qantas argued that it would be oppressive to impose the maximum fine in these circumstances.
The Court agreed, outlining that the penalty should not exceed what is necessary to achieve deterrence. Taking all relevant factors into account – including the large scale of the contraventions, the mixed level of remorse demonstrated by Qantas, the financial advantage Qantas sought through the outsourcing, and senior management’s ‘calculated’ involvement in the decision – the Court concluded that a fine of $90 million was necessary.
This $90 million fine consisted of $50 million to be paid directly to the Union and $40 million reserved for further payment, which will be allocated between the Union and the affected workers.
What does this mean for employers?
This $90 million penalty is a strong reminder that contraventions of the FWA can lead to significant fines for employers. Courts are willing to impose hefty fines on employers where there are widespread contraventions of the FWA and where this will send a strong message of deterrence to other employers.
This case further emphasises how broadly adverse action and workplace rights can be defined under the FWA. It also serves as a reminder that an employer is prohibited from taking adverse action against an employee to prevent the exercise of a future workplace right.
Please contact a member of our workplace relations team if you have questions about any of the matters in this article.
If you would like to read further on this topic please see our previous article: Qantas’ adverse action appeal grounded following landmark High Court decision.
