Transport Workers Union wins case against Qantas over outsourcing of ground crews
Qantas was partly motivated by an upcoming employee negotiation and potential industrial action when the airline decided to outsource the jobs of more than 2000 people to cut costs in the downturn caused by COVID-19, a Federal Court judge has found.
The Transport Workers Union sued Qantas in the Federal Court after the airline announced in November 2020 that ground handling operations at ten Australian airports would be outsourced and moved to third-party companies, saving $103 million per year.
Qantas engaged in âcontravening conductâ when it outsourced the jobs of thousands of ground crew, a Federal Court judge has found.Credit:Wolter Peeters
The union argued that the outsourcing decision breached the Fair Work Act because the affected employees were targeted on the basis of their union membership. It was further argued that the outsourcing decision was made to prevent the employees from exercising their workplace rights, in another breach of the Fair Work Act.
In a judgment on Friday, Justice Michael Lee found Qantas engaged in âcontravening conductâ by outsourcing the employeesâ jobs, in a decision partially motivated by avoiding future industrial action.
Qantas has indicated it will file an appeal against the decision.
The union did not prove that the employees were targeted on the basis of their union membership, which meant that part of their case failed.
Justice Lee said the case had been touted in public commentary as a test case about the industrial phenomenon of outsourcing, but it was not that case ânor indeed is it a test case about anything at allâ.
He said the case was simply whether any prohibited reason formed a âsubstantial and operative partâ of Qantasâ reasons for making the decision to outsource.
The union successfully argued that senior Qantas staff were partly motivated by a desire to prevent the employees from organising and engaging in protected industrial action relating to their Enterprise Bargaining Agreement, which was due for renegotiation in early 2021.
Justice Lee said the union had argued the âdark cloudsâ of COVID-19 pandemic provided a âglimmer of opportunityâ for Qantas to stop union members from exercising their workplace rights and rid the airline of union influence.
âThe perceived financial benefits of outsourcing (which until the pandemic had not been pursued because of the risk of operational disruption), became for the first time feasible,â Justice Lee said.
Qantas maintained in the case that the outsourcing emerged only because of the impacts of COVID-19, which had a âdevastating and wholly unprecedented impact upon Qantasâ operations and revenuesâ and led to billions of dollars in losses.
The outsourcing agreement was entered into in January this year, and by March 31 all affected Qantas employees had ceased their employment.
Justice Lee said the relationship between Qantas and the union was historically âantagonisticâ and had âsouredâ in 2020 to the point where the airlineâs chief executive officer, Alan Joyce, publicly declared the union to be âmilitantâ.
Although Justice Lee found the workers were not targeted on the basis of their union membership, he said it is not in dispute that âthe effect of the outsourcing decision would be to remove the vast majority of union members from Qantasâ businessâ.
The unionâs barrister Mark Gibian, SC, put to Qantas executive Andrew David during the hearing that one reason for the outsourcing was that âyou wished to avoid Qantas being in a position where it needed to bargain with and negotiate with the TWU in the futureâ.
âThatâs not the reason that we made the decision,â Mr David said.
An internal Qantas document, which formed part of the case, weighed up the pros and cons of the outsourcing decision and listed some reasons to avoid outsourcing as âthe size of the job losses (2700) sticker shockâ and âgovernment risksâ.
The document was later updated to reference the upcoming enterprise bargaining round, and to point out there was currently an opportunity to execute a âfull exitâ of ground staff, which may never present itself again.
Justice Lee found the union was entitled to a declaration that Qantas engaged in âcontravening conductâ by outsourcing the jobs. The exact form of this declaration, and any relief the union is entitled to, will be decided at a later date.
The case will return to court on August 4.
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Georgina Mitchell is a court reporter for The Sydney Morning Herald.
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