Australia’s largest airline, Qantas, has been hit with a record-breaking fine of AUD 90 million (about US$59 million or £43 million) after a Federal Court found it had illegally sacked more than 1,800 ground staff during the early days of the COVID-19 pandemic. The penalty, handed down on August 18, 2025, by Justice Michael Lee, marks the largest ever imposed for breaches of industrial relations laws in Australia’s history, according to BBC and the Associated Press.
The saga began in August 2020, when Qantas, citing financial pressures from lockdowns and border closures, made the controversial decision to outsource its ground operations. The move, which affected baggage handlers, cleaners, and other ground staff, came at a time when no COVID-19 vaccine was available and the aviation industry was reeling from unprecedented disruption. Qantas argued that the layoffs were a necessary financial measure as flights ground to a halt, but the Federal Court later found the airline had acted illegally, specifically by preventing staff from exercising their rights to collectively bargain or take industrial action.
Justice Lee, in his ruling, described the outsourcing of 1,820 jobs as the "largest and most significant contravention" of relevant Australian labor laws in the past 120 years. He made it clear that the penalty was designed to send a strong message to other employers. "The fine is intended as a real deterrence to other employers who might be tempted by the financial rewards of breaching employment law," Lee stated, as reported by AP. He further questioned the sincerity of Qantas’s remorse, noting the airline’s "unrelenting and aggressive" legal strategy, which included attempts to avoid paying compensation even after publicly expressing regret for the layoffs.
Qantas’s chief executive, Vanessa Hudson—who was the airline’s chief financial officer at the time of the layoffs—issued a public apology following the court’s decision. "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 in a statement. "The decision to outsource five years ago, particularly during such an uncertain time, caused genuine hardship for many of our former team and their families." She added, "Over the past 18 months 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 as we work to earn back the trust we lost."
The court ordered that AUD 50 million of the fine be paid directly to the Transport Workers’ Union (TWU), which had pursued the case against Qantas. Justice Lee specifically lauded the union’s role, stating, "But for the union … Qantas’ contravening conduct would never have been exposed and it would never have been held to account for its unlawful conduct." The remaining AUD 40 million of the fine will be allocated following a future hearing, as reported by AP.
The TWU, which represents about 60,000 members, described the verdict as a "final win" and a landmark victory for Australian workers. Michael Kaine, the union’s national secretary, told reporters, "It is a significant—the most significant—industrial outcome in Australia’s history and it sends a really clear message to Qantas and to every employer in Australia: Treat your workforce illegally and you will be held accountable." He added, "Against all the odds, we took on a behemoth that had shown itself to be ruthless and we won." Anne Guirguis, a former Qantas employee of 27 years who lost her job in the layoffs, expressed relief at the outcome: "We can close this chapter and move on now," she told reporters outside the court, as cited by AFP.
For Qantas, the financial blow does not end with the AUD 90 million penalty. The airline had already agreed in December 2024 to pay AUD 120 million (about US$78 million) in compensation to former employees after losing multiple appeals, including a unanimous decision by seven High Court judges rejecting its defense. This brings the total financial cost of the saga to more than AUD 210 million, not including legal fees and reputational damage.
Yet, some legal experts question whether the penalties are sufficient to deter similar conduct by other large corporations. Dan Trindade, an employment law expert from the legal firm Clayton Utz, told BBC, "If it's not seen as sufficient deterrence, the government may face calls to increase penalties." Justice Lee himself noted that Qantas executives had expected to save AUD 125 million (US$81 million) a year through outsourcing, suggesting that the financial calculus for such decisions might still favor risk-taking by large firms.
The Qantas scandal is not an isolated incident; it comes on the heels of other high-profile controversies for the airline. Just last year, Qantas was ordered to pay AUD 100 million for selling tickets on thousands of flights that had already been canceled, after the Australian Competition and Consumer Commission sued the airline for false, misleading, or deceptive conduct. These repeated breaches have battered the airline’s once-sterling reputation as the "Spirit of Australia."
Vanessa Hudson, who took over as CEO in 2023, has made public commitments to improve customer satisfaction and repair the company’s image. However, Justice Lee’s remarks in court documents suggest skepticism about whether Qantas’s contrition is genuine or merely a response to public and legal pressure. "I do think that the people in charge of Qantas now have some genuine regret, but this more likely reflects the damage that this case has done to the company rather than remorse for the damage done to the affected workers," Lee said.
The case has also highlighted the critical role of Australia’s unions and the legal system in holding powerful corporations to account. With government agencies showing little interest in investigating or prosecuting Qantas, it was the union’s persistence over five years that finally brought the airline’s actions into the public eye and secured justice for the affected workers.
As Australia’s aviation sector continues to recover from the pandemic’s impact, the Qantas ruling serves as a stark reminder that even the country’s most iconic companies are not above the law. The message from the courts is clear: shortcuts at the expense of workers’ rights will not be tolerated, and those who break the rules will be held accountable—even if it takes years of determined legal battles to get there.
For the former Qantas ground staff and their families, the decision marks the end of a long, bitter chapter. For the rest of Australia’s workforce, it stands as a powerful precedent—and a warning to employers everywhere.
