The TWU presented evidence in the Federal Court on Monday that suggested Qantas used COVID as an opportunity to speed up pre-existing plans to outsource staff.
Qantas denied the accusation, arguing that the decision to make more than 2,000 ground handlers redundant was due to the “extremely severe” financial impacts of the pandemic.
The union is attempting to force the airline to rehire more than 2,000 staff, arguing that the decision to remove them contravened the Fair Work Act because employees at the new companies will now no longer be entitled to terms secured through enterprise agreements.
On the first day of proceedings, the court heard a report by Qantas chief operating officer Paul Jones, dated 27 April 2020, that said the operating environment presented a chance to speed up change through the outsourcing of ground handling operations.
It discussed the “challenges of ASU (Australian Services Union) rates” it claims were 25 per cent above the market rate.
Qantas executive manager airports Colin Hughes said the document was merely a “problem statement” designed to consider a number of outcomes.
The TWU’s barrister, Mark Gibian SC, cross-examining, said, “The heading is ‘Providing a pathway to implement third-party labour supply’ — that’s what was being contemplated.”
“I think it was contemplating a number of things,” Hughes replied.
Qantas’ barrister, Neil Young QC, said the decision to outsource the staff by Domestic and International chief executive Andrew David was based on the difficult financial conditions created by the pandemic.
“The immediate and ongoing financial impact to the Qantas Group of the pandemic has been extremely severe. There was a combined revenue loss of $11 billion from March to December, a 91 per cent reduction in underlying profit for the 2020 financial year, a $2.7 billion tax-free loss for the fiscal year and a $1.5 billion statutory loss,” Young said.
“Because of those circumstances, each business unit was tasked with delivering significant cost reductions and restructuring savings.”
Young said that the airports division was tasked with a number of cost-cutting targets, including reducing costs by 72 per cent in the 2021 financial year. Managers decided only outsourcing met all of their strategic objectives.
Both Qantas and Jetstar removed ground handling operations this year at the Australian airports where the work was done in-house, which included Sydney, Melbourne and Brisbane, shifting them to businesses including Swissport and dnata.
The case continues.