Qantas shares still lift after court rules it illegally sacked 1700 workers

The airline was trying to avoid future industrial action by unlawfully outsourcing thousands of jobs.

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Australia's highest court has dismissed Qantas Airways Limited (ASX: QAN)'s appeal against an earlier judgement that the airline illegally sacked 1,683 employees.

In the midst of the COVID-19 restrictions in late 2020, the company told ground staff across 10 airports that their jobs would be axed and replaced with outsourced labour.

The Transport Workers' Union (TWU) immediately took Qantas to court, arguing that the sackings were illegal.

What did the High Court rule?

The Federal Court found that Qantas had indeed breached the Fair Work Act.

The airline then appealed that decision, taking the matter to the High Court.

The High Court on Wednesday morning agreed with the Federal Court decision, putting the case to rest almost three years after the original job terminations.

According to multiple media reports, a public gallery packed with former Qantas staff and union officials cheered the judgement as it was handed down.

A Qantas spokesperson acknowledged the development.

"The Federal Court originally found that while there were valid and lawful commercial reasons for the outsourcing, it could not rule out that Qantas also had an unlawful reason – namely, avoiding future industrial action. 

"The High Court has now effectively upheld this interpretation."

The airline blamed the uncertainty of the pandemic for the sackings.

"The decision to outsource the remainder of the airline's ground handling function was made in August 2020, when borders were closed, lockdowns were in place and no COVID vaccine existed," said the spokesperson.

"The likelihood of a years; long crisis led Qantas to restructure its business to improve its ability to survive and ultimately recover."

Qantas shares were up 0.27% at time of writing on Wednesday morning.

Workers devastated by illegal actions

TWU national secretary Michael Kaine, speaking outside the court building, called for sackings of a different kind.

"It is now time for the board to go," he said.

"But their last act should be to rip away the obscene bonuses [then chief executive] Alan Joyce has received while these workers suffered."

Damien, one of the affected Qantas workers, spoke of the personal toll from the episode.

"The last 3 years have been horrendous for my colleagues and myself," he said.

"A lot of us haven't found other employment. There have been relationship breakdowns, people have had to sell their homes."

The Qantas spokesperson apologised for the impact on its ground staff.

"We deeply regret the personal impact the outsourcing decision had on all those affected and we sincerely apologise for that."

Kaine urged the new Qantas chief to take the company in a new direction.

"Vanessa Hudson was side by side with Alan Joyce during his tenure. If she's to stay around she needs to turn over a new leaf at Qantas."

What types of remediations should take place, whether it's financial compensation and penalties, will be decided later.

After a series of corporate scandals, Qantas shares have now dipped more than 16% since 24 July.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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