Federal Court Imposes record $90 Million Penalty on Qantas – What Employers Need to Know

KEY TAKEAWAYS:

• The Federal Court imposed a $90 million penalty on Qantas for deliberately outsourcing 1,820 jobs to prevent employees from exercising workplace rights, marking the largest-ever penalty under Australia’s general protections provisions.
• The Federal Court found senior Qantas executives were directly involved in the unlawful action, which caused significant harm to workers’ dignity and well-being beyond financial loss.
• The decision serves as a major warning to businesses that adverse action breaching workplace rights will attract severe legal and financial consequences, especially where decisions are motivated by suppressing employee rights.

The Federal Court of Australia has delivered one of the most significant workplace relations penalty decisions in Australian history. The case of Transport Workers’ Union of Australia v Qantas Airways Limited (Penalty) [2025] FCA 971 arose from Qantas’ decision in 2020 to outsource ground-handling operations at ten airports, which resulted in the dismissal of 1,820 employees.

The Court had previously found that Qantas took “adverse action” against these employees in breach of the general protections provisions of the Fair Work Act 2009 (Cth). This contravention was found to be deliberate, involving senior management, and motivated in part by a desire to prevent employees from exercising workplace rights such as engaging in industrial action and collective bargaining.

What are General Protections Provisions?

General protections provisions, found in Part 3-1 of the Fair Work Act 2009 (Cth), protect employees from harmful or adverse action, coercion, undue influence or pressure and misrepresentation by their employer or a person engaging them for services, due to certain reasons.

These protections cover workplace rights (such as taking leave), temporary absences due to sickness or injury, participation in industrial activities, and certain personal attributes, such as your age, sex, disability or another discriminatory reason. The General protections provisions prevent actions like dismissal, demotion, or discrimination based on these factors.

Federal Court Judgment

Justice Michael Lee imposed a pecuniary penalty of $90 million on Qantas, representing “slightly less than 75% of the maximum penalty” of $121 million. This is the largest penalty ever imposed under the general protections provisions.

This is in addition to the $120 million in compensation awarded last year to the affected ground workers, who were found to have been illegally sacked or redeployed in 2020–21 in contravention of the Fair Work Act, a ruling that was upheld by the High Court.

In this earlier case involving Qantas, the Court examined the timing and motivation behind Qantas’ decision to outsource ground handling jobs. At the time, one enterprise agreement covering affected employees had expired, allowing bargaining to begin, while another was set to expire a month after the outsourcing decision. Although the Transport Workers Union intended to commence bargaining, employees were not yet able to take protected industrial action due to procedural requirements.

The Court’s ruling was later appealed and upheld all the way to the High Court, which found that a key reason for the outsourcing was to prevent employees from exercising their workplace rights to bargain or engage in industrial action once their agreements expired. This motive rendered the outsourcing an adverse action, as it was substantially based on suppressing those rights.

Key aspects considered in the penalty decision included:

• Seriousness of conduct: The outsourcing decision was carefully planned, affected a very large number of employees, and was driven by financial motives.

• Involvement of senior management: The Court found senior executives, including Mr Paul Jones (at all relevant times, Chief Operating Officer of Qantas Airlines) and Mr Colin Hughes (at the time, Executive Manager of Qantas Airports), were directly involved in the unlawful conduct.

• Impact on workers: The Court recognised that unlawful terminations cause significant harm beyond financial loss. Stating, “… work is more than a way to make a living; it is a form of continuing participation in society.” Continuing, the Court further stated, “To deprive someone of work illegally is to deprive a person of an aspect of their human dignity…”.

• Deterrence: In quantifying the penalty, the Court sought to ensure that breaches of workplace laws are not seen as just “the cost of doing business”, particularly for large corporations with vast resources.

Of the $90 million penalty, $50 million will be paid to the Transport Workers Union, which brought the case when regulators did not. The Court has reserved its decision on how the remaining $40 million will be distributed, including whether affected workers will receive a share.

Note to Employers

This case is a stark warning for employers, particularly larger corporations, that the Federal Court is willing to impose significant penalties for unlawful adverse action.

This decision highlights the factors that employers need to consider when making decisions to dismiss or demote an employee, particularly in circumstances where the decision may:

1. Injure an employee; or
2. Alter their position to the employee’s prejudice; or
3. Discriminate between the employee and other employees.

Employers should carefully consider whether an employee has exercised a workplace right, proposes to exercise a right, or whether the employer’s decision would prevent an employee from exercising a right before seeking to dismiss or demote an employee.

How We Can Help You

At Coutts, we have an experienced Employment Law team that can assist both employers and employees alike to ensure you are aware of your obligations and rights. If you need a review of your workplace policies, assistance with termination or guidance through a termination claim such as a general protections claim, contact our team today.

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