The Federal Court has awarded a total of $170,000 in compensation for non-economic loss to three former Qantas employees ($30,000, $40,000, and $100,000 separately for each individual).
This decision stems from a 2023 High Court decision which found that Qantas’ decision to outsource the jobs of 1700 ground handler employees in 2020 constituted a breach of the general protections provisions in the Fair Work Act 2009 (Cth) (FW Act). This case is summarised in our article here. Relevantly, under the general protections provisions of the FW Act, an employer cannot take adverse action (including dismissing an employee) against an employee because the employee has, or exercises, a workplace right, or engages in industrial activity.
Background
In November 2020, Qantas outsourced its ground handling operations work at 10 Australian airports to several third-party ground handling companies (outsourcing decision) to reduce costs during the COVID-19 pandemic. This decision led to the redundancy of 1,700 of its ground-handling employees. At the time of the outsourcing decision, the employees were covered by two enterprise agreements that restricted them from taking industrial action or engaging in enterprise bargaining until the agreements had passed their nominal expiry dates. One agreement expired on 30 December 2021, meaning the outsourcing decision pre-emptively denied employees the opportunity to exercise their workplace rights to participate in protected industrial action and enterprise bargaining.
The Transport Workers’ Union (TWU) challenged the outsourcing decision, alleging that Qantas acted to prevent employees from participating in protected industrial action or enterprise bargaining, violating the general protections provisions of the FW Act.
In earlier rulings, the Federal Court found Qantas’ outsourcing decision constituted adverse action. Qantas’ subsequent appeal to the High Court in 2023 upheld this finding, affirming the decision was a deliberate attempt to avoid collective bargaining and protected industrial action.
Findings
The Federal Court decision, presided over by Justice Lee, focused on compensation for three former Qantas employees used as test cases for the broader group of affected workers.
Justice Lee ruled that Qantas would be required to pay varying degrees of compensation based on the test cases.
Economic loss was limited to one year’s salary based on the assumption that Qantas would have found a legal method to outsource the roles after a year.
In relation to non-economic loss, Justice Lee rejected Qantas’ argument that any non-economic loss actually suffered by the test case individuals would have been suffered regardless a year later, outlining that it lacked “any evidentiary foundation”. In awarding the compensation for non-economic loss, Justice Lee confirmed the position that the contravening conduct does not need to be sole cause of the loss and damage sustained because of unlawful conduct, it only needs to a cause of the loss and damage. As such, Justice Lee ordered that the employees be paid $30,000, $40,000 and $100,00 respectively, in acknowledgement of the personal harm they sustained from the sacking.
This case returned to court on 15 November 2024, to determine the final calculation for compensation to all affected workers. However, at this stage, there are no further updates on this matter.
Learnings for Employers
This case highlights the importance of transparent decision making. Employers must document substantive and legitimate reasons for decisions with potential adverse effects on employees. Failure to do so can lead to significant legal and financial repercussions.
It also confirms that non-economic loss may be awarded for personal harm resulting from unlawful adverse action taken against an employee, even if the adverse action is not the sole cause of the loss or damage suffered by the employee.
The High Court decision confirms that any action that affects an employee’s future workplace rights may also constitute a breach of the general protections provisions in the FW Act.
Case Reference: Transport Workers’ Union of Australia v Qantas Airways Limited (Compensation Claim) [2024] FCA 1216
