On Thursday, Australia's Supreme Court ruled that Qantas Airways had violated the law by dismissing 1,700 ground staff and hiring contractors in their place at the onset of the COVID-19 pandemic. This has reignited public outrage against a company already embroiled in multiple controversies. The court stated that while Qantas had business reasons for its 2020 actions during peak pandemic-induced border closures, it violated labor law by attempting to undermine the rights of unionized employees to take industrial action and bargain collectively.
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This decision adds fuel to the public anger towards the national airline, which led to the premature retirement of its CEO earlier this month following an antitrust lawsuit accusing the airline of selling tickets for thousands of flights that were subsequently canceled. The company has also been accused of successfully lobbying the federal government to reject a request from Qatar Airways to increase its flights to Australia, thereby eliminating competition that could have reduced fares.
Qantas has refrained from commenting on its lobbying efforts. Its shares have dropped nearly 17% since July 24 amid intense scrutiny of its reputation. In 2021, the Federal Court ruled that Qantas had violated the law by outsourcing ground handling jobs. However, Qantas appealed this ruling in the High Court, which upheld the decision on Thursday. The case will now return to the Federal Court to determine penalties and compensation for affected employees. Transport Workers Union (TWU) Secretary Michael Kaine, who filed the lawsuit, said, "These workers have been put through hell.
Their families have been put through hell, their lives have been dislocated, some of them forever." Qantas responded by stating that it accepted the High Court's decision and noted that the Federal Court had already ruled out forcing the company to reinstate the workers. It said it had already made an unspecified provision in its accounts for penalties and compensation for affected employees after the Federal Court decision. "As we have said from the beginning, we deeply regret the personal impact the outsourcing decision had on all those affected and we sincerely apologize for that," said Qantas in a statement. When Qantas outsourced baggage handling roles, it estimated annual operating cost savings of A$100 million ($64.15 million) and an additional A$100 million in equipment investment savings over five years. This move also allowed Qantas to avoid potential future strikes by TWU. Despite these controversies, Qantas reported a record annual profit last month due to strong demand for international travel pushing up fares.