Qantas Fails To Make A Case In Union Outsourcing Court Battle

A court ruling on Friday morning found Qantas’ bid to outsource the jobs of 2,000 employees was largely unlawful. The Transport Workers Union (TWU) took Qantas to court over the matter in December. The union alleged Qantas breached the Fair Work Act. While the union did not succeed in all its arguments, it nonetheless enjoyed a significant win today.

Qantas has lost a Federal Court case involving outsourced workers. Photo: Getty Images

Qantas outsourced the jobs of aircraft cleaners, ramp workers, push back drivers & baggage handlers

In late November 2020, Qantas said its restructuring of ground handling operations, which included baggage handlers, push-back drivers, ramp workers, and aircraft cleaners, would see 2,000 jobs outsourced. 

Qantas argued doing so would see the airline save US$74 million annually, avoid large capital spending on equipment such as aircraft tugs and baggage loaders, and better match the costs of ground handling with fluctuating demand.

Qantas went on to award contracts to Swissport and Menzies Aviation. A bid by the TWU on behalf of employees was unsuccessful. Qantas said that bid was “theoretical with no roadmap of how projected cost savings would be achieved.”

The TWU said, as a result, Qantas workers at 10 airports including Sydney, Melbourne, Brisbane, Perth, Adelaide, Darwin, Cairns, Townsville, Alice Springs, and Canberra have now lost their jobs, which have been outsourced to workers on less wages and conditions.

The Qantas outsourcing decision took 2,000 people off the Qantas payroll. Photo: Swissport

Qantas seized a vanishing window of opportunity

In December, the union began legal action against Qantas. The TWU argued the outsourcing decision breached Australia’s Fair Work Act.

In the interim, the TWU has publicized several possible safety breaches at Qantas since the outsourcing process began. That including planes severely damaged after being hit by baggage vehicles, damaged planes taking off without being investigated, and baggage being delayed and damaged.

On Friday, the Federal Court upheld much of the TWU’s case. Justice Michael Lee found Qantas’ objectives of avoiding unnecessary capital expenditure, improving flexibility, and reducing costs during the travel downturn were all objective commercial reasons for the outsourcing decision.

But much of the case revolved around whether Qantas took the decision to target union employees to prevent future legitimate industrial relations activity.

“There was a vanishing window of opportunity,” Justice Lee said. “The operational disruptions caused by the pandemic meant the risk-reward analysis that previously prevented outsourcing been considered became for a limited period, viable.”

The travel downturn presented Qantas with a vanishing window of opportunity regarding outsourcing. Photo: Getty Images

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One Qantas executive in the Judge’s firing line

Justice Lee found Qantas executive Andrew David was largely responsible for the outsourcing decision. Justice Lee also ruled Qantas failed to prove on the balance of probabilities that Mr David did not make the outsourcing decision for a prohibited reason – preventing future legitimate industrial relations activities. The TWU welcomed the ruling as “a watershed moment.” 

“Senior Qantas management have serious questions to answer after this judgment,” says TWU National Secretary Michael Kaine. “This ruling calls a halt to shifting responsibility for workers and outsourcing them onto third parties on a low cost, take-it or leave-it contract.”

Both the TWU and Qantas have been ordered into case management to negotiate relief following Friday’s ruling.