Australian airline Qantas fined record Ksh.7.6B for illegal pandemic layoffs

Federal Court Justice Michael Lee said he wanted the penalty to be a "real deterrence" to firms that might be tempted by the financial rewards of breaching employment law.

Qantas decided to sack the workers and outsource their jobs in August 2020, a period of lockdowns and border closures when no Covid-19 vaccine was widely available.

Australia's Federal Court subsequently found that Qantas had acted illegally despite its stated "commercial imperatives" because it prevented staff from accessing their rights to collectively bargain or take industrial action.

It later dismissed an appeal by the airline.

Long-dubbed the "Spirit of Australia", 104-year-old Qantas has been on a mission to repair its reputation, which was hit in recent years by the illegal sackings, soaring ticket prices, claims of sloppy service, and the selling of seats on already-cancelled flights.

Qantas chief executive Vanessa Hudson took over in 2023, promising to improve customer satisfaction.

She replaced Alan Joyce, who stepped down earlier than planned as Qantas endured criticism over its treatment of workers and passengers, despite delivering bumper profits for shareholders.

- 'We sincerely apologise' -

Qantas said it accepted the penalty.

"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," Hudson said.

"We sincerely apologise to each and every one of the 1,820 ground handling employees and to their families who suffered as a result," she said in a statement.

Qantas had worked for 18 months to change the way it works and "rebuild trust", the airline boss said.

"This remains our highest priority as we work to earn back the trust we lost."

Qantas' fine is to be paid in two parts, the court said, with Aus$50 million going to the Transport Workers Union and Aus$40 million being held for future payments to the former workers.

The penalty is in addition to a compensation payment of Aus$120 million for affected former employees that Qantas agreed to last year.

"It has been five long years. Today is a victory, not just for our colleagues but for all Australian workers," said Anne Guirguis, who worked at Qantas for 27 years cleaning aircraft before being laid off.

"We can close this chapter and move on now," Guirguis told reporters outside court.

Transport Workers' Union National Secretary Michael Kaine described Monday's decision as a "final win" for the Qantas workers.

"Qantas was not sorry to workers when it illegally outsourced these workers, many finding out they'd lost their jobs over a loudspeaker in the lunch room," Kaine said.

"Qantas is only sorry now that it has to pay the largest penalty fine of any employer in Australian corporate history."