Qantas gets slammed again

This time to the tune of $90 million

In what might be corporate history’s most cringe-worthy apology tour, Qantas has just copped a massive A$90 million fine from the Federal Court. Why? Because back in 2020, they illegally outsourced around 1,820 ground handling staff, bag handlers, cleaners, the lot during the COVID-19 crisis. The court found the move wasn’t just heartless; it also breached the Fair Work Act.

Justice Michael Lee didn’t hold back. He labelled the Qantas’ “sorry” as “the wrong kind of sorry”, more PR spin than genuine contrition. He was unimpressed by their defence strategies, their spinning of court outcomes, and their internal culture that preferred legal gymnastics to owning up.

Why the $90 million – and where’s it going?

Here’s how the fine breaks down:
• A$50 million goes straight to the Transport Workers’ Union (TWU) not a ransom, but a strategic boost. The judge wants to empower the union to keep policing labour law when regulators don’t.
• The remaining A$40 million is still up in the air likely to be used for additional worker support or further compensation. The TWU’s pushing for that.
So… what did Qantas get wrong?
1. Illegally outsourcing during COVID-19, Qantas used the pandemic as cover to cut 1,700 jobs. The TWU effectively argued the move was also aimed at blocking future industrial action. The courts agreed.
2. Cultural complacency – Justice Lee flagged a lack of leadership change and questioned whether Qantas had actually learned from the ordeal. Their pathetic little “sorry” fell short because their CEO didn’t even bother to testify.
3. Cost cutting gone rogue – They budgeted only A$70 million for the fallout, thinking it’d be enough. Turns out this saga has blown way past that. Ha ha.
4. Poor legal and PR handling – Qantas fought the decision tooth and nail, spun court wins prematurely, and dragged the process out through appeals. None of it helped their “good guy” image.

Will the fine really hurt Qantas?
In a word: Not much. They’re fresh off a near A$2.5 billion underlying profit year, and results are due in just a couple of weeks. Geez, it sounds like they are doing okay, and $90m won’t even touch the sides.

But here’s the thing, the reputational and PR damage from having your name dragged through the courts and then the media is unquantifiable. Qantas, which is seemingly an Australian icon with brand loyalty to die for, has just exposed itself as a corporate bully. But let’s be real, with staggering profits in the billions, it’s obvious that Qantas cares more about share price and mega profits than they do about customers and employees. So hopefully this nasty, embarrassing case doesn’t just cost cash, it should hit their reputation.

And this whole debacle certainly invites scrutiny, shows that you can beat the big guys and most importantly, it sets a judicial precedent. It’s a signal for corporate Australia: you can’t just blatantly abuse workplace rights under the guise of “commercial necessity”.

What this teaches us about outsourcing
• Avoid outsourcing as a way to sideline workers’ rights especially if your goal is to weaken union influence or dodge future bargaining. That’s a clear breach of the Fair Work Act.
• Respect potential rights, not just existing ones – Even if industrial action isn’t happening yet, you can’t act pre emptively against it.
• Decision making should be transparent – Keep clear documentation, honest rationales, and include leadership in hearings or change rollouts.
• Compensate fairly and promptly – Qantas eventually agreed to a A$120 million compensation fund for the sacked workers, managed by Maurice Blackburn. Workers will get up to 12 months’ pay plus non-economic loss amounts ranging between A$30,000 and A$100,000, depending on individual circumstances.
• Take note of your moral compass during crises – The pandemic was no excuse to bypass workplace laws and treat people like disposable napkins.

Quick recap
What Qantas did wrong: Illegally outsourced unionised ground handling staff during COVID, in breach of workplace laws; resisted responsibility; then performed a PR style apology. Whoopsie.
Why the fine: A$90 million as a strong deterrent, with A$50 million invested into union enforcement and A$40 million pending distribution.
Will it hurt? Financially, not much. But reputational fallout and the legal fallout matter more.

Lessons for other businesses: When considering outsourcing, make sure you do it ethically, legally, fairly, and transparently. Remember people will remember how you treated them when shit goes down. And in this case Qantas certainly failed the sniff test.

Written by

Emily Jaksch