Already and this is this is the Daily This is the Daily. Ohs oh, now it makes sense. Good morning and welcome to the Daily OS. It's Tuesday, the nineteenth of August. I'm Emma Gillespie.
I'm Tamkovlaski.
A landmark federal court decision has hit Quantas with Australia's largest workplace penalty in corporate history. The airline has been ordered to pay ninety million dollars for illegally sacking more than eighteen hundred workers during the pandemic. Money that comes on top of a one hundred and twenty million dollar compensation deal that the airline has already agreed to. It's been nearly five years since we first began hearing about this case, and there have been plenty of twists and
turns in the years since. So today we are going to take you through everything you need to know about this case. But first a quick message from our sponsor, So.
M this is being described as the largest case of illegal sackings in Australian history. That is not something you say on the podcast every day, yep, So why don't you take us right back? This is a COVID story. So let's go back to that time where did this all start.
Yeah, you might remember a series of I suppose Quantus would maybe frame them as bad pr headlines coming out about the airline in that COVID era, And this one is really at the core of that big media storm of the COVID era.
So we're talking right the beginning of the pandemic, like twenty twenty.
Yep, so COVID nineteen. We're right in the thick of it, and airlines are losing money rapidly, So borders are closed, flights are canceled. Every airline is doing it tough, and Quantus in particular claims that it is bleeding cash. They were the words that the carrier used at the time. Now, in November twenty twenty, Quantus made a decision to outsource more than eighteen hundred staff, So we're talking baggage handlers, cleaners, ground crew, all the people who keep the planes and
the airport's running for Quantus. Now, the company at the time said that this was a cost saving measure, that it was trying to survive the pandemic, and that by outsourcing these jobs to contractors, it could save about one hundred million dollars per year.
And so how do we get from a cost saving measure during the height of the pandemic to a court case.
So this is where it gets quite interesting and where we start to hear from the Transport Workers' Union. Now, this is a major union that represents a lot of the staff that were involved in the sackings, and the union argued that this wasn't just about money. They actually claimed that Quantus deliberately timed these sackings to prevent the workers from exercising their industrial rights, so that included their right to collectively bargain for better wages and conditions, as
well as go on strike to demand better wages. The TWU argued that Quantus deliberate and illegally sacked the workers at a time when they couldn't take any of that kind of action interesting, and so it launched legal action in the federal court in twenty twenty. Now, in July twenty twenty one, Justice Michael Lee, who was the same judge that handed down this week's penalty, he found that Quantus had indeed acted illegally, siding with the TWU.
A big finding. What were Justice Lee's reasons for getting there?
So he ruled that while Quantus may have had legitimate commercial reasons for outsourcing these staff, a substantial reason for the decision was to curb the union's bargaining power or
to curb staff's ability to exercise their industrial action. Under Australian workplace law, you actually can't sack workers to prevent them from exercising those rights, from doing things like striking, and Justice Lee found that Quantus basically couldn't prove that it wasn't motivated by that factor, so it couldn't prove that it was purely motivated by law full or financial
reasons rather than ones prohibited by the Fair Work Act. Essentially, the burden of proof was on Quantus to show that they weren't trying to weaken the union, and Justice Lea ruled that they couldn't.
Do that, and so that decision was handed down in twenty twenty one. We're now here in the second half of twenty twenty five, we're still talking about it. What happened next in the last let's say, almost four years since then.
Yeah, you're absolutely right. Quantus appealed that first decision in the federal court. They actually ended up taking this fight all the way up the court system. So first they appealed to what is known as the Full Federal Court. In twenty twenty two, three judges unanimously there upheld the original ruling against the airline, and then Quantus took its appeal to the High Court. So this is Australia's highest legal authority, the final place of appeal, and in twenty
twenty three, the High Court unanimously dismissed Quantus's appeal. That's three separate courts, seven different judges, all finding that Quantus did act illegally by sacking these workers.
And so it went all the way up the court ladder. It was rejected at every stage, and then it almost got sent back down for this sentencing decision or kind of a financial penalty being handed down, which is why we're talking about it today. So then that's the focus. What was the process in working out exactly how much Quantus needed to pay to remedy this mistake.
So there were essentially two separate issues that Quantus and the union have been working in the courts to resolve since that point. First, there's this issue of compensation for the workers who lost their jobs. Then separately, there are the penalties against Quantus for breaking the law. So a
twofold issue here. In October last year, Justice Lee in the Federal Court ordered compensation for the eighteen hundred affected workers, and the court found that Quantus should compensate them not just for economic losses like lost wages, but also for
non economic losses, including what the court called hurt and suffering. Now, before landing on a figure, how do you determine, you know, the value of what these eighteen hundred workers should be awarded, There was a bit of a test case in the Federal court now that involved three of the impacted workers.
These were three Quantus staffers aged in their fifties. Two of them had worked for the company for twenty years, and we heard firsthand from them about what the sacking had done to them mentally, physically, the emotional fallout, relationship fallouts, the whole kind of gamut of negative experiences were on
display from those three representatives. Justice Lee awarded those ex Quantus workers a total of one hundred and seventy thousand dollars, and that became a sort of blueprint for broader compensation to figure out a scheme that would include all eighteen hundred and twenty workers.
So they had those test cases, they came up with a bit of a figure. There has that now been resolved and is every worker going to receive a check for the damage and the lost wages? Yeah?
In short, yes, So in December, based on that case with the three workers, Quantus agreed to pay one hundred and twenty million dollars in total into a compensation fund for all affected former employees. But that still left us with this question of penalties. So, yep, you're going to compensate the workers that you were found to have illegally sacked. But what is the price that you should pay for making that mistake, for breaking the law in that way?
And that's why we're talking about it today. So in that two part equation you were talking about earlier of compensating the employees and then the penalties were now at that penalty's bit. Yep, what did Justice Lee rule?
So Justice Lee ordered Quantas to pay ninety million dollars in penalties, and as we've explained, that is on top of the compensation payment that it's required to pay.
So we're now over two hundred million dollars exactly.
The TWU was seeking the maximum penalty, which would have been one hundred twenty one million dollars. Quantus had argued for a mid range penalty, of course, something between the forty and eighty million dollar mark, so we were loosely
expecting a pretty high figure. But Justice Lee said that he wanted to come up with a number that was going to essentially deter other major corporations from behaving similarly, you know, setting a bit of an example here, and he was pretty scathing about the conduct of the airline. He said that quote, to deprive someone of work illegally is to deprive someone of an aspect of their human dignity. And this is not assuaged simply by expressions of regret.
It's pretty strong language from the judge there. Tell me about how he characterized Quantus's behavior, because the focus of this penalty bit is really about assessing their role in this process, and obviously it's worth ninety million dollars in penalties. Yeah, how did you describe Quantus as a kind of corporate citizen?
It was really interesting and just as Michael Lee is, as you can imagine, a very articulate judge. He was particularly critical of how Quantus handled the case. Immediately after
the outsourcing came to light. He criticized them of a lack of transparency, of kind of a dishonesty with the community about what was going on, and the judge also noted that while the airline did eventually apologize publicly that it had attempted to deny compensation payments to affected workers and that it had been quote the wrong kind of sorry.
So Lee suggested that the remorse shown by quantus quote more likely reflects the damage this case has done, rather than unique remorse for the damage done to the affected workers.
Let's get a quick response from the TWU. How have they responded to the penalty?
So the union has said that they're not necessarily happy about this penalty, but that they do welcome it as vindication for workers. Their argument all along has been, you know, we never should have been here having these conversations and the damage has been done. But National Secretary for the union Michael Kin described the penalty as a ninety million dollar message to corporate Australia that workers will stand up for what's right. The union has consistently argued throughout this
case that the human cost was enormous. The impact on the workers who suffered financially you know, family breakdown's mental illness as a result of suddenly losing employment, especially during the early scary stages of the pandemic. Cain also touched on the fact that the Transport Workers Union brought this case and took on a company with quote almost limitless resources,
knowing it was a long shot. Now, I thought it was interesting that Justice Lee actually acknowledged what the TWU did here, saying that the TWU quote has alone borne the burden of prosecuting this litigation. Now, with that in mind, he's actually ordered fifty million of the ninety million dollars that Quantas must pay to be paid to the union's so some of that penalty will go towards the union's legal cost.
And have we heard from the airline in all of this?
So Quantus has accepted the federal court decision. There's a statement from the airline this week that said the judgment holds them accountable for their actions which caused real harm to employees. We've heard from the group's CEO, Vanessa Hudson, who said the airline apologizes to each and every one of the sacked workers and their families, and she added that quote over the past eighteen months. We worked hard to change the way we operate to rebuild trust with
our people and our customers. This remains our highest priority as we work to earn back the trust we lost.
And so what happens now, I mean, where do we go from here? And I'm interested, particularly if any of the money has actually been paid out yet.
Yes, so the airline Quantus has noted that it has paid out that one hundred and twenty million dollars, but that has gone to a fund that's being managed by the Morris Blackburn lawyers, the law firm representing all the workers. Now, the law firm is still working to send those individual payments out. It started issuing payments in April this year.
But it is a really lengthy process and the compensation amounts for the workers actually vary, so they're ranging from between thirty thousand to one hundred thousand dollars based on individual circumstances. So the scale of those payments in accordance with the court's orders against the individual circumstances. You can understand why it might continue to be a lengthy one. But the money is in the bank for all intents and purposes from Quantus, and it will pay the penalty
from this week in accordance with court orders. According to Quantus.
A really significant employment case that comes to an end after many, many years and many tiers of the court system. Emma, thank you so much for that. Thank you, and thanks so much for joining us on the Daily Ods this morning. If you enjoyed what you listens to, we'd love you to share with a friend or leave a comment. You can listening on Spotify, Apple or watching us on YouTube. We'll be back in the afternoon with your head. Until then,
have a wonderful day. My name is Lily Maddon and I'm a proud Arunda Bunjelung Kalkudin woman from Gadighl Country. The Daily oz acknowledges that this podcast is recorded on the lands of the Gadighl people and pays respect to all Aboriginal and torrest Rate island and nations. We pay our respects to the first peoples of these countries, both past and present.