SYDNEY (Bloomberg): Qantas Airways Ltd. was ordered to pay A$90 million ($59 million) for illegally sacking almost 2,000 ground workers during the Covid-19 pandemic, in a court judgment that included sharp criticism of the airline’s culture and raised questions about how much the company has changed.
In a ruling on Monday, the Federal Court of Australia told Qantas to pay A$50 million of the penalty directly to the Transport Workers’ Union, which had sued the airline over the firings.
A portion of the remainder, to be determined at a later hearing, might go to some of the 1,820 sacked workers. The fine comes on top of last year’s A$120 million compensation deal for the impacted former employees.
Qantas outsourced ground-handling operations at 10 Australian airports in late 2020, under then-Chief Executive Officer Alan Joyce, as the pandemic brought aviation to a standstill.
The Transport Workers’ Union argued staff were axed to avoid looming negotiations over pay and conditions and potential strikes.
Reading his hour-long judgment, Justice Michael Lee criticized the culture that allowed the firings to proceed. He also questioned the airline’s degree of contrition and its commitment to change, noting Qantas’s "unrelenting and aggressive litigation strategy” as it pursued the case through the courts.
Lee said he was left "with a sense of disquiet and uncertainty as to precisely what went on within the upper echelons of Qantas leading up to the outsourcing decision.”
The illegal firings were one of several scandals and corporate missteps at Qantas during the pandemic and its immediate aftermath, including accusations from the regulator that Qantas sold seats on thousands of flights that the airline had already scrapped.
The airline agreed to pay a further A$120 million in penalties and compensation for the ghost flights.
Resolving the ground handlers’ case has been a key part of Qantas’ rehabilitation under Joyce’s successor, Vanessa Hudson, who took the helm in late 2023. Justice Lee’s stinging words on Monday now reopen the debate about who was to blame, and what’s being done, following the worst reputational crisis in the airline’s history.
‘Performative Remorse’
Lee expressed his dissatisfaction that Hudson hadn’t appeared in court, but had instead apologized through company statements.
"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 by senior counsel for a party submitting that Qantas is engaged in performative remorse,” Justice Lee said in his judgment.
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Hudson again apologized in a statement after the judgment.
"We sincerely apologize to each and every one of the 1,820 ground handling employees and to their families who suffered as a result,” Hudson said. "We’ve worked hard to change the way we operate as part of our efforts to rebuild trust with our people and our customers. This remains our highest priority.”
Lee said that while he accepts Qantas is sorry, he said it’s probably "the wrong kind of sorry.”
"I do think persons of responsibility within Qantas do now have some genuine regrets, but this more likely reflects the damage this case has done to the company rather than either remorse for the damage done to the affected workers, or concern it engaged in the contravening conduct,” Lee said.
Former CEO Joyce resurfaced in Sydney last week and defended his record - and the steps taken - when he ran Qantas. In a speech at an aviation conference, he said "hard and painful” decisions made during the Covid pandemic saved Qantas from collapse.
"Qantas, like many airlines, also faced very challenging decisions about its workforce. I acknowledge that,” Joyce said in his speech, without directly referring to sacking the ground workers.
TWU National Secretary Michael Kaine, speaking after Monday’s judgment, described Qantas’ actions in 2020 as "ruthless and self-interested.”
"Today’s decision is a A$90 million message to corporate Australia that workers will stand up for what’s right,” Kaine said.
Qantas had faced a maximum A$121 million penalty for illegally sacking the workers.
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