Qantas to pay record fine of $58 million for pandemic sackings criticised by judge

A court ordered Australia’s largest airline, Qantas Airways, on Monday to pay a record fine of A$90 million ($58.64 million) for illegally sacking 1,800 ground staff during the COVID-19 pandemic and criticised it for a lack of contrition.

In imposing the penalty, the largest ordered by a court on a company in the history of Australia’s labour laws, Federal Court Judge Michael Lee also inveighed against the airline's litigation strategy.

While Qantas made changes to its board and management team, Lee said subsequent expressions of regret seemed more aligned with "the damage" the case had done to the company than remorse for the harm caused to workers.

"I accept Qantas is sorry, but I am unconvinced that this measure of regret is not, at least in significant measure... the wrong kind of sorry," he added. Lee said the size of the penalty, about 75 per cent of the maximum he could have set, was important to ensure it "could not be perceived as anything like the cost of doing business".

He said A$50 million of the fine would be paid to the Transport Workers' Union (TWU), which brought the case against Qantas.

After the decision, Michael Kaine, the national secretary of the TWU, said, "Against all the odds, we took on a behemoth... that had shown itself to be ruthless, and we won."

Monday's decision follows a December agreement on a compensation fund of A$120 million struck by the airline and the sacked workers.

During the pandemic in 2020, Qantas’ senior management decided to lay off 1,820 ground staff and shift their work to contractors.

Qantas said it was a commercial decision but the Federal Court in 2021 held the move to be "adverse action", preventing staff from exercising their workplace rights and unionising, in breach of Australia’s Fair Work Act.

Assessing Qantas’ actions, Lee said he was unconvinced it was truly contrite and criticised its culture, public relations approach and litigation strategy. For example, he said Qantas had announced it would appeal to the High Court against the 2021 court decision "without any time passing", to consider the 431-paragraph judgment. When its appeal failed, Qantas issued a statement "spinning" the outcome, however, and overlooking findings on its unlawful conduct, he added.

He also criticised Qantas’ conduct during litigation, such as opting to keep out of the witness box Vanessa Hudson, its current chief executive and former chief financial officer. "It is one thing for the 'Qantas News Room' to issue press releases by a CEO saying sorry; it is quite another for written assertions of contrition, recognition of wrong and cultural change to be tested in a courtroom," Lee said.

The penalty was the largest ever ordered by a court for violations of Australia’s labour laws, said Maurice Blackburn Lawyers, which represented TWU. "This record-breaking penalty reflects the monumental scale of Qantas’ wrongdoing," the firm's principal, Josh Bornstein, said in a statement.

The fine also reflected the unprecedented finding of adverse action against so many workers, said Shae McCrystal, a labour law professor at the University of Sydney. "Adverse action cases are risky," she said. "It signals a message to employers that if they break the law, then trade unions may receive those penalties in order to assist them in enforcing the act."

Qantas said it would pay the fine as ordered. "We sincerely apologise to each and every one of the 1,820 ground handling employees and to their families," Chief Executive Vanessa Hudson said in a statement.

Qantas shares were down 0.4 per cent at A$11.58 in early trading.