Australian High Court Dismisses Appeal from Qantas

The High Court of Australia on Wednesday dismissed an appeal by Qantas Airways. The appeal concerned whether a decision by Qantas to outsource its ground handling operations at 10 Australian airports violated the Fair Work Act 2009.

The effect of the outsourcing decision was that ground handling services then being performed by employees of Qantas and Qantas Ground Services, many of whom were members of the Transport Workers Union of Australia, would instead be performed by staff of third-party suppliers (Qantas Airways Limited & Anor v Transport Workers Union of Australia [2023] HCA 27).

The high court judgement summary, available at https://www.hcourt.gov.au, said, "It was agreed that Qantas took adverse action against the affected employees in making the outsourcing decision. At the time of the outsourcing decision, the affected employees were prohibited from organising or engaging in protected industrial action..."

The issue before the High Court was whether s 340(1)(b) of the Fair Work Act 2009 prohibited a person from taking adverse action against another person for the purpose of preventing the exercise of a workplace right that might arise in the future. The High Court unanimously held that it did, and in doing so, rejected Qantas' contention that s 340(1)(b) only proscribed adverse action for the purpose of preventing the exercise of a presently existing workplace right.

Following the ruling, Qantas emailed a statement to news media saying it acknowledges and accepts the High Court’s decision to uphold two prior rulings by the Federal Court regarding the legality of outsourcing the remainder of the airline’s ground handling function in 2020.

The email states:

“The Federal Court originally found that while there were valid and lawful commercial reasons for the outsourcing, it could not rule out that Qantas also had an unlawful reason – namely, avoiding future industrial action. The High Court has now effectively upheld this interpretation. “The decision to outsource the remainder of the airline’s ground handling function was made in August 2020, when borders were closed, lockdowns were in place and no COVID vaccine existed. The likelihood of a years’ long crisis led Qantas to restructure its business to improve its ability to survive and ultimately recover.

“As we have said from the beginning, we deeply regret the personal impact the outsourcing decision had on all those affected and we sincerely apologise for that.

“A prior decision by the Federal Court has ruled out reinstatement of workers but it will now consider penalties for the breach and compensation for relevant employees, which will factor in redundancy payments already made by Qantas.”