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'The Patricks of the pandemic': Qantas and the unlawful outsourcing of 2000 jobs (by Josh Bornstein & Anthony Forsyth)

13th September, 2021

An edited version of this post was published under the authorship of Anthony Forsyth on The Conversation (9 September 2021):  

Qantas’s recent advertising campaign promising that Australians stranded overseas will once again be reunited with the resumption of international air travel tugs at the heart strings. However, the national carrier has been at the forefront of combative employer responses to handling the challenges of the COVID-19 pandemic.

Granted, its business has suffered a major hit due to border closures and travel restrictions. Just as the airline’s domestic operation was coming back into gear earlier this year, Sydney’s Delta outbreak and subsequent flare-ups in other states have halted most interstate travel. Recently, it announced a loss for 2020-21 of $1.73 billion.

Many businesses have faced similar dilemmas since the pandemic began 18 months ago. But few have treated their workforce as harshly as Qantas (see:

Qantas was almost first off the blocks with mass stand-downs in March 2020. It followed this up by precluding stood down workers from accessing their sick leave, even if they had contracted coronavirus while working, and vigorously fought union efforts to contest this decision in the courts.

The airline adopted a narrow interpretation of its payment obligation to employees under the JobKeeper scheme. This approach, according to the Australian Services Union, effectively reduced the payments made to fortnightly-paid staff by counting penalty rates earned in one week towards the $1,500 JobKeeper payment for the following period.

Earlier in the pandemic, the airline resisted making facemasks compulsory on its flights citing ‘a lot of resistance’ from travellers (see: Yet Qantas has joined SPC in becoming the first Australian employers to implement a mandatory COVID-19 vaccination policy for staff.

During 2020, Qantas announced plans to make 8,500 positions redundant including the outsourcing of 2,500 jobs carried out by ground staff, baggage handlers and cleaners. The fact that Qantas undertook mass sackings while in receipt of JobKeeper, a programme designed to ensure businesses retained their employees, ensured controversy would attend its decision.

TWU challenges outsourcing in the Federal Court

The Transport Workers Union challenged the airline’s decision to outsource ground handling work to third party providers at ten Australian airports, on behalf of around 2,000 employees who lost their jobs.

Relying on statutory provisions similar to those used to greatest effect in the 1998 waterfront dispute, the TWU argued that Qantas seized a “vanishing window of opportunity” provided by the pandemic to outsource all ground staff who were overwhelmingly union members. Qantas understood that stood down workers were deprived of any bargaining power. The Federal Court found that a reason for Qantas’s decision to outsource the workers was to prevent them from exercising important workplace rights; namely the right engage in collective bargaining and to take protected industrial action.

This reason placed Qantas in breach of the Fair Work Act.

The legal battle is far from over. The Transport Workers’ Union has asked the Federal Court to order the reinstatement of the 2,000 ground crew employees and compensate them for losses suffered as a result of Qantas’s unlawful conduct.

Qantas has other ideas. At a case hearing last week, the airline continued to vigorously oppose reinstatement. It also lodged an application for leave to appeal the Federal Court’s July decision, and wants the court to halt any further consideration of reinstatement until an appeal is determined.

This makes the prospect of the sacked workers getting their jobs back in the near future unlikely.

The Federal Court’s decision represents an important and overdue check on decades of business outsourcing initiatives that have undermined workers’ job security and driven down wages. Such business strategies mean that companies like Qantas eliminate the need to negotiate wages with their workers. Through outsourcing, a company can unilaterally set the price that they are willing to pay for the work and advise the labour hire provider if the price isn’t acceptable, that it will seek competitive tenders. The downward pressure is ultimately borne by the workers.

The ruling should also cause any employers tempted to take advantage of COVID through restructuring, with detrimental effects on their workforce, to think again.

Josh Bornstein is National Head of Employment Law at Maurice Blackburn and ran the Federal Court case for the TWU. Anthony Forsyth is Professor of Workplace Law, RMIT University, and runs the Labour Law Down Under Blog.

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