The penalty against Qantas has important implications for employers and the role of unions
Qantas' $90 million fine for unlawfully sacking 1820 baggage handlers and ground staff in 2020 puts unions in a greater position as a legal player, a leading employment law firm in Sydney told HRD.
The fine represents a record penalty that stands as a warning to corporate Australia that cutting costs at the expense of lawful conduct can have serious legal and reputational consequences.
Analysing the judgement, Victoria-Jane Otavski (pictured above, right), Principal and Black Bay Lawyers, observed:
The decision has furthered the power dynamic and legal shift given to employers - highlighting they cannot dismiss workers to avoid them exercising rights they would have had and expands the scope of the Fair Work Act’s “general protections."
This, therefore, provides a broader legal basis to challenge dismissals from the point of view of the employee that may be strategically timed to undermine worker rights.
Previously, employers could argue that because a right hadn’t yet been exercised, it couldn’t be protected but in the wake of the Qantas decision, potential or future rights are recognised as grounds for legal protection.
The level of the penalty also warrants mention given it sends a clear message that workers and unions can now pursue meaningful consequences for unlawful actions, increasing the exposure for employers engaging in strategic or retaliatory dismissals.
Additionally, the decision has certainly enhanced the role of unions as legal enforcers by affirming their authority as defenders of employee rights beyond just negotiations and in the Courtroom.
The fact that $50 million of the $90 million penalty is being paid directly to the Transport Workers Union, this outcome reflects a major development and reflects a strengthening in position of unions as a legal player, moving them away from just advocates and as enforcers of workplace rights, and which can in certain situations, receive an ‘upside’ for their involvement.
Employers will face a new risk in circumstances where unions might see litigation not just an industrial strategy, but also as a financially sustainable or advantageous course.
Precedent set with compensation amount
BlackBay Lawyers Senior Associate Julie Mehrdawi (pictured above, left) said the massive fine reflects the severity of Qantas’ contraventions of the Fair Work Act.
“The severity of the penalty highlights the seriousness of employers engaging in unlawful adverse action, reflecting the Court’s position that mass breaches of the Fair Work Act will not be tolerated,” Mehrdawi said.
“Adverse action can include actions intended to punish employees, such as dismissing an employee or cutting back their shifts, simply because they exercised, or sought to exercise, their workplace rights.”
The penalty has been imposed in addition to the $120 million Qantas already agreed to pay as compensation to the sacked workers.
This - described by Justice Lee as a "wake up call" for corporate Australia - was highlighted by Mehrdawi as devastating for reputation.
“Once a company is associated with misconduct or non-compliance, it risks losing the trust and confidence of its workforce, clients and the public," she said.
“Employers must abide by workplace laws and conduct business ethically and responsibly, regardless of the size of the organisation.”
Justice Lee's ruling on Qantas sackings
The outcome concludes a dispute that began in 2020 when Qantas announced it would outsource ground handling operations at 10 Australian airports in response to the COVID pandemic, which resulted in mass sackings.
Reading his judgment in the Federal Court of Australia, Justice Michael Lee highlighted the seriousness of Qantas’ conduct.
“To deprive someone of work illegally is to deprive someone of an aspect of their human dignity,” he said.
He said that the decision will send a message to the airline and to other well-resourced employers that not only can they face significant penalties for breaches of the Fair Work Act 2009 (Cth), but also that the penalties will help unions fulfil their statutorily accorded roles as enforcers of the Fair Work Act.
Where the remaining $40 million will go is not yet known - but will be discussed at another hearing.
** This piece was written by Naomi Shivaraman (pictured above, centre), Legal Affairs Strategist at BlackBay Lawyers - with contribution from Victoria-Jane Otavski, Principal, and Julie Mehrdawi, Senior Associate at Black Bay Lawyers, based in Sydney. **
