Australian flag carrier Qantas has issued a groveling apology to thousands of workers who were illegally sacked at the height of the pandemic when then CEO Alan Joyce decided to outsource jobs like baggage handling to cheaper third-party companies.
An employment tribunal ruled back in 2021 that Qantas had broken employment laws when it outsourced nearly 2,000 jobs but rather than accepting the court’s ruling, Qantas initially tried to appeal the verdict.
Qantas had hoped to save around AU $100 million per year by outsourcing ground handling and maintenance services to third-party contractors, but the airline now faces a massive compensation bill after a test case involving three workers.
On Tuesday, the carrier was ordered to pay $170,000 in compensation to three workers for non-economic loss stemming from the decision to outsource their jobs.
One workers won $100,000 in compensation, while the second was awarded $40,000 and the third is set to receive $30,000. The test cases will now be used to determine individual compensation payouts for all of the workers who lost their jobs during the outsourcing scandal.
“We sincerely apologize to our former employees who were impacted by this decision, and we know that the onus is on Qantas to learn from this,” commented the airline’s incumbent CEO Vanessa Hudson following the verdict.
“We recognize the emotional and financial impact this has had on these people and their families. We hope that this provides closure to those who have been affected.”
Hudson replaced Joyce as Qantas’ chief executive after he was forced to step down in disgrace in September 2023 when the airline came under intense public scrutiny for its poor operational performance.
In August, the Qantas board decided that Joyce should have $9.26 million wiped from his pre-departure annual bonus because of a series of mistakes that he made that resulted in “significant reputational and customer service issues”.
Along with the compensation payout for illegally sacked workers, Qantas is also footing a massive $100 million civil penalty for selling tickets for more than 8,000 flights that had already been canceled during 2022.
Hudson also agreed to create a $20 million customer remediation fund over the scandal.
Qantas is yet to determine how much the compensation bill for the sacked workers will set it back, while the airline says it will now work with the Transport Workers Union to determine individual payouts.
A federal court will determine a separate penalty for Qantas’ illegal actions at a later date.
