A five-year legal battle has finally ended, justice has been served to the employees, and there is a sense of celebration in the air. An Australian court on Monday imposed a crushing penalty of AU$90 million (US$59 million) on Qantas Airways for unlawfully laying off employees in 2020. What does it mean to lay off illegally? In this particular case, the company fired around 1,800 employees (mostly ground staff) during COVID-19 and later outsourced their work. Now, how is that illegal? Rather, it’s cost-saving, one may think. However, there’s a fine line crossed, stamping on the employee’s rights. Here’s everything you need to know about how and why the monetary punishment is valid.
What Did Qantas Do to Get Fined?
It was August 2020, and the world was under lockdown with no vaccine in sight. Qantas decided to lay off 1,800 employees, including ground staff like baggage handlers, cleaners, and other support personnel. What reason did Qantas give the public? “Commercial reasons,” let’s assume to save money. However, things quickly took a turn when Qantas outsourced these jobs.
Why was it illegal?
Laying off employees wasn’t the problem, but outsourcing the same work to external contractors is. It contradicts their reasoning for firing employees in the first place and clearly violates these employees’ rights:
- Employees couldn’t collectively bargain, meaning they couldn’t negotiate as a group for better pay or conditions in such a compromised situation.
- Their loyal employees worked for the company for 27 years (Anne Guirguis).
- Many were reportedly fired after a loudspeaker announcement in the lunchroom.
- Blocking the employee from going for strikes and protests, or any other form of industrial action, for that matter.
The 5-Year Struggle…
When a major company like Qantas gets involved, it’s never an easy fight, but the Transport Workers Union (TWU) stayed strong, and the case eventually went in their favor. Later, Qantas appealed to the court, claiming they didn’t do anything wrong, only to be dismissed and penalized (even in reputation) on August 18.
The AU$90 Million (US$59 million) Punishment
The court ordered the company to pay monetary charges of AU$90 million (US$59 million). Notably, this is the most significant employee penalty in Australia’s history. Here’s the full breakdown:
- Of that amount, about AU$50 million (US$32.6 million) will go to the Transport Workers Union.
- And roughly AU$50 million (US$26.1 million) is allocated for future payments to the same laid-off employees.
- Well, this amount aligns with the AU$120 million that Qantas agreed to pay as compensation to the former employees (who got fired).
Justice Brings Joy…
“It has been five long years. Today is a victory, not just for our colleagues but for all Australian workers. We can close this chapter and move on now,” said Anne Guirguis (an employee who worked for 27 years at Qantas).
“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,” said the Union National Secretary Michael Kaine.
The company had to bear a whopping AU$210 million (US$137 million) and a broken reputation in total. In addition to that, the judge, Justice Michael Lee, explicitly stated that this punishment should serve as a “real deterrence.” Therefore, the law should deter companies from violating employee rights.
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