Qantas wins landmark case over temporary layoffs

The decision could have a ripple effect on the airline industry and beyond

Qantas wins landmark case over temporary layoffs

Qantas cannot be held reasonably responsible for its decision to stand down hundreds of crew members – given the current downturn in the airline industry, a federal court has ruled.

The temporary layoffs at Qantas and its budget carrier Jetstar came in response to the slowdown in air travel during the COVID-19 crisis, Justice Geoffrey Flick said in his landmark decision.

In late March, Qantas stood down two-thirds of its workforce, including the 450 aircraft engineers who filed the case through the Australian Licenced Aircraft Engineers Association.

Read more: Qantas stands down two-thirds of staff

The workers’ union alleged the work stoppage resulted from a “voluntary change in business operations” and that the matter was not “entirely out of the airlines’ hands”.

But the federal court rejected these claims. “It was an economic reality forced upon the airlines by reason of the global pandemic and the conduct of the Commonwealth, state and territory governments in restricting travel and movements,” Justice Flick said.

“Given the substantial downturn in passenger flights, there was no other option ‘reasonably’ open for Qantas or Jetstar to pursue,” he said.

Qantas welcomed the decision after arguing in court that it had exhausted all other means to cut costs, including deferring airport rent payments, before deciding on work stoppage.

At the time, Qantas had reportedly been paying out wages of about $3.8m a week to its aircraft maintenance staff. Without making any changes to flight operations and staffing, the airlines would have run out of money within eight to 10 weeks.

Read more: Qantas announce thousands of job losses

The company also said the temporary layoffs followed employment agreements on what to do in case workers could not be “usefully employed”.

“Standing down our workers as travel demand collapsed due to factors outside of our control wasn’t a decision we took lightly,” the company said. “We did it because the alternative would have been to burn cash and put the whole company at risk.”

Union leader Steve Purvinas, however, questions whether there wasn’t really any available work for aircraft engineers to perform as Qantas claims.

“We think that with aircraft grounded, there has been ample work that could have been done which should have meant that they weren’t stood down,” Purvinas said.

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