Qantas has announced it will appeal the Federal Court’s ruling earlier on Friday that it breached the Fair Work Act by making 2,000 workers redundant.
In a strongly-worded statement, the airline argued the TWU, which brought the case, had a “persecution complex” and said it will “oppose any such orders” to reinstate workers or pay compensation.
Federal Court judge Justice Michael Lee earlier ruled that while Qantas likely didn’t make the redundancies purely to “hobble the industrial influence” of the TWU, on the balance of probabilities he was not satisfied that one of the reasons could not have been to prevent future industrial action.
It means outsourced employees could potentially regain their jobs or receive compensation, though that has yet to be determined.
“Qantas fundamentally disagrees with this judgment particularly in light of the following,” said the business in a statement.
“Prior to the pandemic, Qantas was actively recruiting into its ground handling function and investing in new equipment – a sign that had no intention of outsourcing.
“Qantas had three clear reasons right from the outset as to why the outsourcing was necessary in the wake of the massive impact of the COVID crisis:
“Using specialised companies could save Qantas up to $100 million a year – savings it desperately needed to unlock as part of its recovery from COVID.
“It would also remove the need for Qantas to spend $80 million over five years on necessary ground handling equipment like tugs and baggage loaders.
“Outsourcing would allow resources to be better matched with fluctuating levels of demand, especially when the same workforce is providing services to scores of airlines at the same airport. The need for this variability has been shown again by the latest set of lockdowns.
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“Today’s judgment does not mean Qantas is required to reinstate workers or pay compensation or penalties. These matters have not yet been considered by the Court and Qantas will oppose any such orders. Qantas will also seek to have its appeal heard as soon as possible and before any remedy hearing.”
Qantas group executive John Gissing said, “The TWU has put forward its persecution complex that our decision to save $100 million a year in the middle of a global downturn was really about stopping them from walking off the job at some time in the future.
“The fact is, Qantas deals with the operational risk of industrial action on a regular basis given the 50-plus agreements across the group. That risk pales in comparison with a pandemic that has grounded our fleet and our people for months, and has so far cost us $16 billion in revenue.
“The focus of the TWU’s case was on a few documents that made reference to industrial action while ignoring the hundreds that don’t. Any company acting prudently has to consider all operational risks when making a significant decision, but a reference to the risk of industrial action risk does not automatically mean that it’s a reason for the decision.
“Qantas was motivated only by lawful commercial reasons, and this will be the subject of our appeal.
“As part of its campaign, the TWU has been trying to discredit the safety of outsourced ground handling, despite the fact the long-term incident rate was double when this work was done in-house. That kind of behaviour is hypocritical and it undermines the strong safety culture that exists throughout Australian aviation.
“The impact the latest lockdowns in Melbourne and Sydney have had on domestic travel shows why it was so important that we unlocked the structural savings from outsourcing the remainder of our ground handling.”
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 external businesses including Swissport and dnata.
The TWU hired Waterfront dispute lawyer Josh Bornstein to argue the airline’s actions contravened the Fair Work Act because employees at the new companies are now no longer entitled to terms secured through enterprise agreements. Qantas had consistently denied it has done anything unlawful.
Bornstein called the decision a legal first.
“The Federal Court has found for the first time that a major employer has sacked over 2000 workers because it was seeking to deprive them of the ability to collectively bargain with the company for a new enterprise agreement,” he said.
“It is also the first successful challenge to a major corporate outsourcing exercise in 20 years. We put Qantas’ outsourcing on trial and Qantas lost. Large companies have used outsourcing for decades to prevent employees from being able to collectively bargain with them.
”As a result, employees have lost the ability to obtain proper wage rises. Once Qantas outsourced its workers and sourced them indirectly from labour hire agencies, it did not have to bargain with ground staff again.”
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