QANTAS: Gets AU$90 million fine for illegally sacking 1,820 ground staff

Federal Court Judge Michal Lee has today imposed a fine of AU$90 million, which is at the upper end of the range open to him. That money is to be paid to the Transport Workers Union, and as additional compensation to the 1,820 workers affected by the 2020 sackings.

“I accept Qantas is sorry, but I’m unconvinced that this measure of regret is not a significant measure – a result of what the full court described in another case as ‘the wrong kind of sorry’.”

Justice Michael Lee

The findings

The AU$90 million awarded is to be paid by Qantas. AU$50 million of that is to go to the Transport Workers Union, which brought the case against Qantas on behalf of the sacked workers.

The remaining AU$40 million is being reserved for possible payment as additional compensation to the affected workers, the details of which are yet to be determined. However, Justice Lee is not opposed to that additional money being paid to the union for the benefit of the affected workers.

‘The price of deterance must be very large’

Justice Lee, Federal Court of Australia

Fine has to be a ‘real deterrent’

Justice Lee said the fine needed to provide a ‘real deterrence’ to the top leadership of large corporations.

He cited some of the airline’s activities as being ‘performative contrition’. He did note some real changes as a result of the decision, which should be reflected in the amount awarded.

This led to his reasoning that a fine of approximately 75% of the maximum allowed should be awarded. The maximum available to him was AU$121 million. AU$90 million is just shy of 75% of that figure.

Criticism of Qantas

The judge was highly critical of some of the actions of Qantas. He singled out some of the activities leading to the sacking of the ground staff. Lee accused management of being too concerned about masking the decision-making process from legal scrutiny, at the expense of worker welfare.

Alan Joyce started the road to rehabilitation with an address to the public forum, the Australian Aviation Summit, last week. But Justice Lee, in his judgment, pointed to the evidence, some of which emerged after the initial decision. Alan Joyce was essential to the decision to sack 1,820 workers illegally. Joyce still stands to gain AU$4 million as part of his long-term incentive plan.

He was also highly critical of the new CEO, Vanessa Hudson. She did not appear to explain the reasoning that led to the original decision. A not unreasonable request since she was part of the senior executive group that made the decision. Justice Lee said that her appearance would have been evidence of real contrition by Qantas over the incident.

Hi criticised the apparent lack of commitment by Hudson and Qantas to finding out how the illegal decisions were made. This included a lack of interest in discovering and remedying the cultural aspects that led to the decision. Lee also pointed out that Qantas still retains many of the advisors who were involved in the illegal activity.

Lee stated that he had to award an amount that demonstrated ‘real deterrence’ to the top leadership of corporate culture.

2PAXfly Takout

Qantas will be happy with this decision. It’s just outside the range they advocated. They bid for an amount between AU$40 and AU$80 million. The TWU wanted the full AU$121 million to be paid. At AU$90 million, it should be acceptable to both parties.

Well, it’s never over until it’s over. It appears that this episode still has an epilogue. That is, the payment of the final AU$40 million of the AU$90 million penalty is yet to be determined.

The justice has made it clear that he wants it to be for the benefit of the affected ground handlers. Those who were illegally sacked and are at the centre of this case. The question is really how this will be done.