Qantas Faces Historic A$90 Million Penalty for Illegal Layoffs Amid Pandemic

In a landmark decision, Qantas has been ordered to pay A$90 million for unlawful sackings, raising questions about corporate responsibility in crisis situations.

An Australian federal court has imposed a record penalty of A$90 million (£43 million; $59 million) on Qantas Airways for the illegal dismissal of over 1,800 ground staff during the Covid-19 pandemic. The ruling, applauded by the Transport Workers' Union, represents the largest fine ever for breaches of industrial relations laws in Australia. In his judgement, Justice Michael Lee emphasized the need for this fine to serve as a deterrent for other businesses contemplating similar actions.

The airline has accepted the penalty, admitting it caused "real harm" to employees impacted by the layoffs. CEO Vanessa Hudson issued an apology to the affected ground handling workers and their families, acknowledging the hardship caused by the decision to outsource operations five years prior, especially during a time of unprecedented uncertainty.

The financial penalty marks Qantas' long struggle with legal disputes following its decision to outsource ground operation roles in 2020. The airline argued it was a necessary measure for survival as the aviation sector faced widespread disruptions. The court has mandated that A$50 million of the penalty will go directly to the Transport Workers' Union, which spearheaded the legal action. The union hailed the ruling as a significant victory for its members, who had long fought for justice after being dismissed.

According to Judge Lee, the fine aims to dissuade other large corporations from dismissing workers under similar pressures, ensuring they know the potential repercussions. He expressed concerns over Qantas’ corporate culture, questioning the authenticity of its remorse, especially after the company employed an "aggressive" legal strategy.

In addition to the A$90 million fine, Qantas has already committed to compensating laid-off workers with A$120 million in 2024 following a series of legal defeats. Legal analysts, however, caution that the consequences might not be severe enough to prevent similar acts by other companies, as the savings accrued from outsourcing could outweigh potential penalties. Qantas’ record penalty comes amid other public relations crises for the airline, including hefty fines for overbooking flights and significant data breaches impacting millions of customers.