Australia’s largest airline, Qantas Airways, was ordered by a federal court on Monday to pay a record fine of A$90 million ($58.6 million) for unlawfully dismissing 1,800 ground staff during the Covid-19 pandemic, marking the biggest penalty in the history of the nation’s labour laws.
The ruling by Justice Michael Lee caps a lengthy legal battle that has spanned years and reached the High Court, with the judge describing Qantas’ actions as the “largest and most significant contravention” of the Fair Work Act to date.
“The sheer scope and size, perceived financial benefits, and consequences of the contravention require a minimum penalty” of 90 million Australian dollars, equivalent to US$58.6 million, Justice Lee concluded.
“Any less would not achieve the necessary specific and general deterrence.”
The airline’s share price was down by 0.52% on Monday.
Judge condemns Qantas’ conduct and lack of remorse
In his judgment, Justice Lee said the penalty, set at roughly 75% of the maximum, was designed to ensure Qantas could not treat breaches of labour laws as a mere cost of doing business.
He was scathing of the airline’s approach to litigation and its failure to display genuine contrition for the harm caused to its workforce.
“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,” he said.
Lee pointed to the airline’s immediate announcement of an appeal following the 2021 court ruling, issued without proper reflection on the detailed judgment.
He also criticised Qantas for attempting to manage public opinion through press statements while avoiding having its executives, including current chief executive Vanessa Hudson, testify under oath.
“It is one thing for the ‘Qantas News Room’ to issue press releases by a CEO saying sorry; it is quite another for written assertions of contrition, recognition of wrong and cultural change to be tested in a courtroom,” he remarked.
Union celebrates landmark victory
Half of the penalty, A$50 million, will be paid directly to the Transport Workers’ Union (TWU), which brought the case on behalf of the ground staff.
“Against all the odds, we took on a behemoth … that had shown itself to be ruthless, and we won,” TWU national secretary Michael Kaine said after the ruling.
Legal representatives for the TWU welcomed the judgment as a powerful warning to employers.
Maurice Blackburn Lawyers, who worked on the case, described the fine as “record-breaking” and reflective of the “monumental scale of Qantas’ wrongdoing.”
Labour law experts also emphasised the significance of the decision.
Professor Shae McCrystal of the University of Sydney said it signalled a shift in the way courts and unions may respond to unlawful employer actions.
“Adverse action cases are risky … it signals a message to employers that if they break the law, then trade unions may receive those penalties in order to assist them in enforcing the act,” she said in a Reuters report.
Compensation already agreed with sacked workers
The penalty comes on top of an earlier A$120 million settlement reached in December between Qantas and the sacked workers.
That agreement followed a test case ruling which confirmed the company had acted unlawfully in outsourcing 1,820 ground handling roles at the height of the pandemic.
Qantas initially argued that the outsourcing was a commercial decision driven by financial pressures, as travel bans and border closures hammered the aviation industry.
However, the Federal Court in 2021 ruled the move was designed to prevent employees from exercising workplace rights and unionising.
Qantas has since apologised and said it will pay the fine as ordered.
“We sincerely apologise to each and every one of the 1,820 ground handling employees and to their families,” Chief Executive Vanessa Hudson said in a statement.
Qantas’ battered corporate reputation
The fine adds to a series of blows to Qantas’ public standing, which has suffered badly since the pandemic.
Once one of Australia’s most trusted brands, the airline has been mired in controversies over labour disputes, customer service complaints, and regulatory action.
In late 2023, it was embroiled in the Australian Competition and Consumer Commission’s lawsuit over so-called “ghost flights” and saw the departure of long-time chief executive Alan Joyce.
The fallout contributed to Qantas being ranked the fifth most distrusted brand in Australia in June, according to Roy Morgan research, behind major supermarkets, Facebook/Meta and telecommunications firm Optus.
The company’s troubles were compounded last month when it confirmed one of the country’s largest cyber breaches, with personal data of 5.7 million customers accessed by hackers.
The breach included sensitive details such as addresses, phone numbers, and even meal preferences.
Wider implications for corporate Australia
The record A$90 million fine, combined with the earlier compensation settlement, marks a significant financial and reputational cost for Qantas.
Analysts say it may also reshape employer behaviour across Australia.
Josh Bornstein, principal lawyer at Maurice Blackburn, which represented TWU, said the scale of the fine underscored that even powerful companies could not disregard labour laws.
“This record-breaking penalty reflects the monumental scale of Qantas’ wrongdoing,” he said.
For many Australians, the ruling provides a sense of accountability against a national carrier that has long played an outsized role in the country’s economy and culture.
But whether Qantas can restore its reputation in the eyes of workers, regulators and passengers remains uncertain.
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