Qantas hit with record fine for illegal layoffs during pandemic

An Australian court has fined airline giant Qantas a record A$90m ($59m) for illegally sacking more than 1,800 ground workers during the Covid-19 pandemic.

Australia's Transport Workers' Union said it welcomed the penalty, which is the largest imposed by a court for violations of industrial relations laws in the country's history.

Federal Court Justice Michael Lee said in the judgement that he wanted the fine to act as a "real deterrence" to other employers.

The airline said in a statement that it has agreed to pay the fine and that the ruling holds it accountable for actions that caused "real harm" to its employees.

"We sincerely apologise to each and every one of the 1,820 ground handling employees and to their families who suffered as a result," Qantas Group chief executive Vanessa Hudson said.

"The decision to outsource five years ago, particularly during such an uncertain time, caused genuine hardship for many of our former team and their families."

The fine is the largest financial penalty issued to an Australian company under the Fair Work Act, which sets out rules for workers and employees.

Australia's biggest airline has faced a years-long legal battle over its decision in 2020 to outsource its ground operations staff, which it said was a necessary financial measure as the aviation industry came to a standstill during the pandemic.

Qantas was ordered by the court to pay A$50m of the penalty directly to the transport workers' union, which had sued the airline over the layoffs.

The decision marked the "end of a David and Goliath five-year battle" and is a "moment of justice for loyal workers who'd loved their jobs at the airline," said the transport union in a statement.

The fine is close to the maximum penalty that can be imposed for breaching Australia's workplace laws.

Judge Lee said the fine is meant to discourage other large firms from thinking they can "get away" with such moves, even if they think the benefits might be worth the risk of getting caught.

In court documents, Judge Lee questioned Qantas' corporate culture and whether the firm's remorse was genuine.

He noted the firm's "unrelenting and aggressive" legal strategy as a sign of efforts to avoid paying any compensation to workers it previously said it felt sorry for.

In 2021, the court found that Qantas had partly outsourced its workforce to limit workers' taking industrial action. Many of the axed workers were union members.

Qantas' penalty is on top of A$120m of compensation that the airline had agreed to pay to laid off workers in 2024, after losing multiple appeals in court.

But it may not be big enough to deter other companies from doing the same as the airline may have saved even more money by outsourcing its staff during the pandemic, said Dan Trindade, an employment law expert from legal firm Clayton Utz.

"If it's not seen as sufficient deterrence, the government may face calls to increase penalties."

The illegal sackings were among several scandals involving the airline in recent years. Last year, Qantas was ordered to pay A$100m for selling tickets on thousands of flights it had already decided to cancel.