Qantas Airways has agreed to pay $120 million to settle compensation claims for over 1800 former workers whom the airline illegally outsourced during the COVID-19 pandemic. This decision marks the end of one of the most challenging episodes in Qantas' 104-year history, directly linked to its controversial staffing decisions made under the pressures of pandemic-era cost-cutting.
The airline's management announced the agreement with the Transport Workers Union (TWU) following years of legal disputes. The Federal Court had previously ruled against Qantas, determining the outsourcing decisions were illegal under Australia’s Fair Work Act. The court’s decision focused on the airline’s alleged attempts to circumvent protections to avoid potential industrial action.
Qantas CEO Vanessa Hudson expressed relief over reaching the settlement just prior to Christmas, emphasizing the need to provide closure for those impacted by the airline's decision. "This is an important step in bringing closure to these individuals and I want to reiterate our sincere apologies to those impacted and their families," Hudson said. She acknowledged the difficult circumstances faced by the affected employees and the families they support.
The airline will establish a compensation fund early next year to distribute payments to the 1820 ex-workers affected. This settlement includes not only compensation for lost wages due to unlawful termination but also addresses non-economic losses stemming from psychological distress and hardship, according to Qantas's statements.
Hudson reiterated the airline's commitment and cooperation during the negotiations, which aimed to expedite resolution before the end of the year. “We know this has been a difficult period for those affected and are pleased we have been able to work closely with the TWU to expedite this process and resolve it ahead of Christmas," she stated.
The TWU hailed the settlement as a significant outcome after what they described as "four gruelling years of court battles," which took their toll on the lives of those involved. TWU National Secretary Michael Kaine emphasized the long struggle of the workers, noting, “They’ve stood by each other during what for some has been the most difficult times of their lives, through family breakdowns, financial stress and mental hardship.” He remarked on the integral role these workers played as part of the Qantas operation, stating, "These workers helped build the Spirit of Australia. Many worked decades, proud to play their part in delivering the safety and service standards..."
Compensations awarded previously during test cases provided insight on the calculations for the fund. Three test cases resulted in damages ranging from $30,000 to $100,000 based on individual circumstances of the workers involved. While the new settlement amount has risen significantly — far exceeding the original $70 million provision Qantas set aside for potential liabilities — it reflects the broader repercussions of the airline's cost-cutting measures during the pandemic.
Analysts recognize this compensation as part of Qantas's effort to move forward from the negative publicity surrounding its outsourcing policies. Earlier this year, Qantas was required to pay $120 million following legal action taken by the Australian Competition and Consumer Commission (ACCC) for selling more tickets than available due to previous cancellations, indicating growing scrutiny of the airline’s operational practices.
The true financial burden resulting from the outsourcing episode could be far greater than the $120 million payout since the company faces potential additional penalties for breaching labor laws, which will be determined next year. Despite the challenges, Qantas has managed to post strong financial results, reflecting its resilience within the competitive aviation sector, with recent profits reported at over $2 billion.
Echoing the sentiments of the TWU, Kaine noted, “Delivering justice to these workers is just the first step... but there’s still a long way to go to bring back the flying kangaroo Australians used to love.” He called for more comprehensive reforms within the aviation industry to safeguard workers’ rights moving forward.
Overall, this settlement not only serves to settle the immediate financial obligations to those affected but symbolizes Qantas’s hopes to rebuild trust and demonstrate accountability within the turbulent climate of the post-pandemic travel industry.
