Qantas has been hit with a landmark A$90 million penalty after Australia’s Federal Court ruled the airline illegally outsourced 1,820 ground-handling staff during the Covid-19 pandemic. The fine -the largest ever issued under Australia’s Fair Work Act – is intended to serve as a deterrent to other companies, with Justice Michael Lee criticising Qantas’s “unrelenting and aggressive” legal tactics and questioning whether its professed remorse was genuine.
In a statement, Qantas acknowledged the ruling and apologised to affected workers, conceding that the 2020 outsourcing decision had caused “real harm”. However, the court found the move was partly designed to prevent employees, many of whom were union members, from exercising their industrial rights. The airline has already agreed to pay A$120 million in compensation to laid-off workers after losing a series of appeals, and has now been ordered to pay A$50 million of the A$90 million fine directly to the Transport Workers’ Union, which brought the action.
Legal analysts note the penalty is close to the maximum possible under the Fair Work Act, but question whether it will be sufficient to dissuade other large firms from similar conduct, given the financial advantages Qantas ultimately gained through outsourcing. The decision caps a five-year legal battle described by the union as a “David and Goliath” victory for workers, and adds to a string of recent reputational setbacks for the carrier including a A$100 million penalty in 2024 for selling tickets on cancelled flights.
For corporate boards and in-house counsel, the Qantas ruling signals a more muscular judicial appetite to punish breaches of labour laws where cost-cutting intersects with workers’ rights. The case underscores that strategic decisions taken during crisis conditions even if commercially motivated will be scrutinised for legality long after emergency pressures subside.
