FEDERAL COURT OF AUSTRALIA
Transport Workers’ Union of Australia v Qantas Airways Limited (Penalty) [2025] FCA 971
SUMMARY
In accordance with the practice of the Federal Court in cases of public interest, the following summary has been prepared to accompany the orders made today. This summary is intended to assist in understanding the outcome of this proceeding and is not a complete statement of the conclusions reached by the Court. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment which will be available on the internet at the Court’s website.
INTRODUCTION
These reasons explain the imposition of a pecuniary penalty on Qantas Airways Limited (Qantas) for what the applicant, the Transport Workers’ Union of Australia (Union), describes as the largest and most significant contravention of the general protections provisions of Pt 3–1 of the Fair Work Act 2009 (Cth) (FWA) (and, for that matter, any of the predecessor provisions to Pt 3–1, which have been a feature of Australian industrial law for over 120 years).
The Union submits the Court should order Qantas to pay the agreed maximum penalty in the sum of $121,212,000 or close to it (and that the whole, or a substantial portion, of this penalty should be paid to the Union). Qantas now accepts a “substantial” penalty should be imposed but says the case “has already been a wakeup call for corporate Australia – on what the law is; on how the issues in such cases should be considered in advance, and how litigation should be prepared for and run” and that to inflict the maximum penalty or close to it would be oppressive as it would not give adequate weight to various factors which place Qantas’ overall conduct in a proper light and would lack any reasonable relation to the statutory maximum.
In short, I found that in November 2020, the Chief Executive Officer (CEO) of Qantas Domestic and International, Mr Andrew David, decided to “outsource” Qantas’ ground handling operations work at ten Australian airports to third-party ground handling companies (outsourcing decision). The vast majority of the Qantas-employed ground handlers were sacked and in July 2021, I found this was “adverse action” in contravention of the FWA, which provides that a person must not take adverse action against another person to prevent the exercise of a workplace right. Here, the relevant “workplace right” was the ability for the employees to organise and engage in protected industrial action and participate in bargaining in 2021.
Appeals against my decision were dismissed.
The Union had sought orders for compensation for economic and non-economic loss of the 1,820 affected workers (affected workers). The claims were referred to mediation in September 2023, but this mediation failed. I then dealt with three test cases in November 2024, and then referred the matter to a second mediation.
In December 2024, Qantas agreed to pay $120 million settlement although, given the way the case was run, the Court was unable to undertake the task of determining whether the settlement was fair. No Court approved notices have been sent to those affected. I have no idea as to what they have been told about their rights. I have no evidence as to how “representative” or statistically meaningful the test cases were, or how the total settlement sum was calculated.
But it is necessary to proceed on the basis that Qantas has done all asked of it when belatedly compensating workers (and I will determine penalty on that basis).
There is no real dispute as to the applicable provisions and principles in determining penalty. The Court’s task is fixing the penalty it considers fairly and reasonably to be appropriate to protect the public interest from future contraventions of the FWA. A penalty will be “oppressively severe” and thus “disproportionate” if it is greater than necessary to achieve the object of deterrence.
I ordered the provision of a document identifying the considerations the parties contended were relevant and set out below are my findings as to these considerations.
FINDINGS AS TO THE RELEVANT CONSIDERATIONS
Number of Contraventions and Maximum Penalty
The number of contraventions of s 340(1)(b) of the FWA committed by Qantas was 1,820, reflecting adverse action taken against each of the affected workers (leading to a maximum penalty available to be imposed of $121,212,000).
The Outsourcing Decision as a Single Act
Although the outsourcing decision was a “single act”, it was a carefully planned act directed at, and affecting, a very large number of employees.
Involvement of Senior Management of Qantas
The contravening conduct involved the following persons who could be said to comprise members of Qantas’ senior management: Mr David; Mr Jones; and Mr Hughes.
This is sufficient to conclude that senior management was involved in the contravening conduct, but the Union places significant reliance upon material revealed after my initial judgment (waived material) to disclose the involvement of others in the decision-making process.
The Union places emphasis upon the revelation in this waived material of the “central importance of Mr Joyce to the decision-making process in 2020”, that Mr Joyce was “someone who was being engaged with by senior personnel involved in the decision-making process” and that the “efforts of senior managers and advisors at the meeting of 1 June 2020 appear to have been directed to analysing and presenting options to the CEO and Managing Director for his evaluation, opinion and decision”.
I had found (in the compensation judgment) that when it comes to ascertaining precisely what went on within senior management of Qantas:
… we are still looking through a glass darkly. The reality that contemporaneous business records were prepared with an eye to eventual disclosure in litigation thought to be inevitable and the unreliability of the affidavit evidence have presented real challenges to fact finding in this case. This problem has been exacerbated by the fact that no minutes or notes were discovered of the GMC or a GMC Sub-Committee or the Project Restart Steering Committee (formed by the GMC)… What was communicated orally, of which there is no record, remains obscure, and… the use of a “voice over” expedient by Mr Jones in dealing with the GMC, on one occasion, was an attempt to prevent his real views being recorded in a contemporaneous document likely to be preserved. In this regard, it is notable that one of the most revealing documents in the case (the handwritten notation from Mr Jones: “Voice-over labour Gov Lockin benefits + open EBAs 2020 DEC”: see LJ (at 266–267 [63], 272 [67], 281–282 [102]–[103])) was only disclosed because a standard discovery order was made (opposed by Qantas) and because Mr Hughes just happened to scan the handwritten notes made by Mr Jones and sent the scanned annotated document to Mr Nicholas (LJ (at 266 [62])).
Although, in the end, these concerns about the completeness of the evidence are heightened by the revelation of specific discussions between Mr Jones and the absent Mr Joyce whereby the CEO, as early as May, “wanted to understand the whole range of options” (held at a time when Qantas “will never have another time like the present”) leaves me with a sense of disquiet and uncertainty as to precisely what went on within the upper echelons of Qantas leading up to the outsourcing decision. What can be said is that any decision to outsource in 2020 was not straightforward and despite the enthusiasm of some, those with the most industrial relations experience were chary about Qantas going down the outsourcing road.
At this hearing, Qantas contends that the Court cannot now entertain a submission that Mr Joyce was involved in the decision-making process because the proposition now advanced by the Union is inconsistent with my earlier finding Qantas “fastened” upon Mr David as the decision maker because Qantas considered “that his selection best assisted the inevitable legal defence of the outsourcing decision in this Court”.
As it turns out, in this aspect of the case, I do not need to resolve these issues.
I meant what I said in the above quote: I used the metaphor drawn from the First Letter of St Paul to the Corinthians advisedly; it reflected the reality that we have an imperfect vision of precisely what occurred “within the upper echelons of Qantas leading up to the outsourcing decision”. Even though, in the wake of the waived material later provided to me, I harbour doubts as to the conclusion I reached as to Mr Joyce not being directly involved in the outsourcing decision, it is unnecessary for me to explore these doubts further and attempt to resolve them. The same applies to the GMC or other members of the Board.
Consistently with the declaration made, I will continue to proceed on the basis that Mr David was the decision maker directly assisted by the involvement of Mr Jones and Mr Hughes. Those persons were regarded as being sufficiently senior members of management to propose, evaluate and then make such a signally important decision on behalf of the company. Accordingly, as part of the synthesis of factors discussed below, the involvement of persons regarded by Qantas as sufficiently senior to propose, evaluate and then make a decision of this importance goes to the nature of Qantas’ contravening and is relevant to assessing the demands of deterrence.
Whether the Contravening Conduct was Deliberate or Reckless
Although I cannot reach a definite, affirmative conclusion that I am reasonably satisfied any relevant Qantas actors (that is, persons other than Mr Jones and Mr Hughes) must have known of the unlawfulness of the prohibited reason, the position concerning Mr Jones is different and more troubling.
Even without the benefit of the confirmatory waived material, I made several related and important findings concerning Mr Jones, which lead me to conclude that Mr Jones knew it was better for Qantas for him to take the active step of ensuring an important (and apparently comprehensive) contemporaneous document did not record one of his reasons for supporting the proposed outsourcing decision.
Mr Jones was part of a culture which allowed him, when dealing with others within Qantas, and without reproach, to engage in conduct he thought might assist in later presenting a materially incomplete and hence false narrative of his subjective motivations when the outsourcing decision was challenged. Even looked at most benignly from the perspective of Qantas, the failure of others within Qantas to respond to, and enquire further into, the motivations of Mr Jones demonstrates a need for real change.
The Impact and Consequences of the Contravening Conduct
The non-pecuniary prejudice suffered by workers being unlawfully terminated ought not to be minimised. This is because work is more than a way to make a living; it is a form of continuing participation in society. To deprive someone of work illegally is to deprive a person of an aspect of their human dignity and this is not assuaged simply by mouthing expressions of regret.
This is why compensation was, and is, so important, particularly when reinstatement was refused because of the significant practical difficulties such a course would have occasioned.
This has now been sufficiently addressed to the extent compensation is relevant to the imposition of penalty.
Financial Benefits to Qantas
As a direct result of the unlawful conduct, Qantas saved approximately $125 million in the following 12 months and Qantas did not need to incur some capital expenditure (although because of findings I made in my compensation judgment, the net savings were probably closer to $20 million).
But at the time the outsourcing decision was made, the commercial benefits were perceived by those within Qantas as being far more extensive.
Qantas had forecast that, by the end of FY23, it would save $125 million per annum from the outsourcing. On any view, when the contravening conduct occurred, the perceived financial benefit to be gained by outsourcing was enormous, even by the standards of a company the size of Qantas.
Qantas’ Circumstances
It is well to commence the consideration of this factor by sounding a note of caution.
Qantas is a unique company: it is not only Australia’s largest domestic and international airline but has represented itself as occupying iconic status and as being emblematic of the Australian nation. Qantas described itself repeatedly in the documents as embodying “the Spirit of Australia”. Indeed, it says that it takes “the Spirit of Australia further” by its behaviour, which is to “always care and be responsible”. In recent times, some officers of Qantas have apparently perceived the corporation as occupying such a position of national importance that it has injected itself into political and cultural debates by being a partisan for one side.
It might be thought that in the light of all this, Qantas should be held to the exceptional, indeed unique, standard it represented itself as occupying in Australia.
But it would be a mistake to augment a penalty otherwise payable because the contravening conduct did not align with the way in which Qantas was representing it acted or its iconic status. Any misalignment between its unique status in Australian society or its professed “values” and the reality of the contravening could only be relevant to the extent it is material to fixing a penalty appropriate to protect the public interest in deterring future contraventions.
In securing deterrence it is, however, plainly necessary to have regard to the size and resources of the contravenor.
For the year ended 30 June 2024, Qantas had: (a) a $2.078 billion underlying profit before tax for FY24; (b) a $1.884 billion statutory before tax profit for FY24; and (c) a total revenue of $21.929 billion.
As of 30 June 2023, Qantas Domestic and International had 21,194 employees, 90% of whom were employed in Australia.
Contrition, Corrective Action and Co-operation
Contrition
I observed long ago that Qantas “sought to minimise” my liability findings and, more generally, that Qantas “exhibit[ed] a certain insouciance about them”.
Referring to the matters that gave rise to these observations and other, later comments made by officers of Qantas, the Union submitted the Court should not allow Qantas to “brush aside” its “vehement and regular denials of wrongdoing” and its persistent and public rejection of my findings. The conduct of Qantas, to use senior counsel’s memorable phrase, revealed “an attitude of adamantine self-righteousness”.
When one has regard to the conduct of Qantas revealed in the evidence, this cannot be dismissed as hyperbole.
On 30 July 2021, I published my reasons around 10:30am. Qantas was certainly not drawn to any agonising or self-reflection. The reasons consisted of 315 numbered paragraphs but less than two hours later, Qantas published a media release, which relevantly made representations attributed, for some reason, to Mr John Gissing, who was the CEO of the regional and charter business, QantasLink (who was described in the release as a “Qantas Group Executive”). Mr Gissing said:
(1) “Qantas fundamentally disagrees with the judgment”;
(2) the Union “put forward [a] persecution complex that our decision to save $100 million a year in the middle of a global downturn was really about stopping them from walking off the job at some time in the future”;
(3) the focus of the Union’s case “was on a few documents that made reference to industrial action while ignoring the hundreds that don’t… a reference to the risk of industrial action risk does not automatically mean that it’s a reason for the decision”; and
(4) “Qantas was motivated only by lawful commercial reasons, and this will be the subject of our appeal”.
In an article published on the day of the judgment in the Australian Financial Review, Mr Gissing also stated that Qantas’ executives “exhibited utmost honesty and integrity during the trial”. Given Mr Gissing’s role within Qantas; the evidence Qantas had adduced as to siloed decision making not involving the GMC; and Mr Gissing’s lack of involvement in the trial, how the CEO of QantasLink was able to make these evaluative judgments was not apparent. In any event, he further described the outsourcing decision as “a right decision, it was a lawful decision, and it was one we had to make quickly to secure those savings as soon as possible”.
Qantas then doubled down. In an interview in the Sydney Morning Herald, Mr Joyce was asked whether he had any regrets about the outsourcing decision and responded: “Not at all. We were in the middle of the biggest crisis in our history, we had to make dramatic action for us to survive. We fundamentally disagree with the ruling, we’re going to appeal it”.
Consistently with this line being taken at the highest levels within the company, the Chairman, Mr Richard Goyder, was quoted in an article published on News.com.au asserting that Qantas was only motivated by lawful commercial reasons and reiterated its “fundamental” disagreement with the Court’s decision.
Litigants, of course, are entitled to express disagreement, even strong disagreement, with a judgment. Courts, particularly at first instance, ought not be unduly sensitive to criticism, even when criticism is expressed forcefully by an unsuccessful party. After all, appeal courts regularly detect error. The administration of justice is not undermined by robust debate nor by the expression of dissenting views; confidence in judicial authority is secured by hearings being conducted in public and the reasoning process of the trial judge being exposed openly (and one hopes cogently) in a published judgment.
But it was two aspects of Qantas’ public relations narrative that are of interest in assessing the genuineness of its present submissions as to contrition: the first was the recurring theme that the Court agreed that Qantas had sound “commercial” reasons to make the outsourcing decision; and the second, was that Qantas only lost because of an onus point (as no positive adverse finding was made).
As to the first point, taking comfort from the fact that the Court found Qantas was motivated by “commercial” reasons overlooks the obvious reality that since man first started to engage in commercial activity, the motivation to engage in unlawful conduct in carrying out such activity can be accurately characterised as being predominantly a commercial one. Or described more bluntly, the pre-dominant motivation of unlawful commercial activity is avarice; that is, a greed directed to making or saving money.
As to the second, this contention, given repeated emphasis, was inaccurate given the positive finding of unlawful conduct made in relation to Mr Jones and Mr Hughes and more than once it was necessary to deal with the oft repeated assertion made by Qantas (in and outside Court) that this is “a case where there has been no positive finding to the effect that the impugned decision was for an unlawful purpose”.
Additionally, a further insight into Qantas’ public relations effort can be gleaned by its conduct immediately following the Full Court decision dismissing Qantas’ appeal. The reasons run to 431 paragraphs. They are, with respect, carefully expressed, appropriately detailed and canvass many complex factual and legal issues. Without any time passing allowing for study of the judgment or any reflection, at 11:29am that day, Qantas determined to issue a press release reasserting that it was solely motivated by “commercial reasons” and stating it would be seeking to appeal the judgment to the High Court.
Then at 10:13am on 18 November 2022, following a special leave application successfully concluding (which included no attack on the factual findings made at trial and left undisturbed by the Full Court) a press release sent the implicit but clear message that the factual findings were relevant to the High Court appeal. Contrary to the release, the “core” of the High Court case was plainly not about “Qantas’ ability to legally outsource a function to save more than $100 million a year when it was struggling to remain solvent”. Further, leaving aside this spinning, this release represented another instance of Qantas failing to acknowledge the Court’s findings about the motivations of Mr Jones and Mr Hughes.
Even when the narrow High Court appeal was dismissed, the Chairman of Qantas was unabashed. Mr Goyder made remarks at Qantas’ Annual General Meeting containing no acknowledgement of the unlawful nature of Qantas’ conduct nor acceptance of responsibility for it. They also give rise to a further point relevant to assessing the genuineness of contrition.
The Chairman referred to “working through a process with the Federal Court and the [Union] to compensate the 1,700 employees who were retrenched” and no doubt a shareholder present would have assumed that compensation would be agreed at the upcoming first mediation or an amount of compensation would be paid to the workers with the quantum to be settled upon following a court process.
When the current “Chief People Officer” of Qantas, Ms Catherine Walsh, gave her evidence, she was asked whether she understood the impact that the unlawful outsourcing had on the affected workers. She responded that it was “very clear” to her that the Qantas workforce comprised people “who are deeply connected, passionate about what they do, many people of long tenure, and I have no doubt that the people who experienced this outsourcing, who lost their jobs, that this was a significant and profound impact on them”. She went on to give evidence that she did not doubt the impact upon the workers and their families was significant, and in her “role and being able to speak for Qantas, I’m very, very sorry for what occurred to these workers who had done nothing but operate and work blamelessly for an organisation that I’m sure many of them at that time loved”.
She held these views in early 2024, but it is testament to the practical irrelevance of: (a) her personal sympathies; (b) the “deep regret” of the Chairman; and (c) the previous representation that Qantas would “work though” compensation issues, that in April 2024, Qantas latched upon an eleventh-hour forensic strategy directed to ensuring that the affected workers received nothing. If any further evidence was needed as to the unrelenting and aggressive litigation strategy adopted in this case by Qantas, it is provided by this effort directed to denying any compensation whatsoever to those in respect of whom Qantas was publicly professing regret for their misfortune (and, in respect of whom, Ms Walsh was feeling “very, very sorry”).
In the light of all this context, it is unsurprising that the Union submits, in effect, that the Court is being presented with mere pieties. If so, such performative remorse would be no true reckoning; but theatre staged for the audience of both the Court and public opinion, hoping the curtain will fall on this saga with the financial damage minimised.
Qantas submits that there are a number of aspects of contrition in the present case: first, evidence of what the contravenor has done for those who suffered from its wrong to make the situation right; secondly, statements made by the contravenor to those affected by its wrongdoing; thirdly, statements made to the public and to the Court apologising for its wrongdoing; fourthly, evidence that the contravenor has set up appropriate systems, processes, procedures or education; and fifthly, evidence that the contravenor intends to change its ways.
The evidence directed to the first four of these aspects is relatively straightforward.
Documents are in evidence recording representations that have been made going to expressions of “deep regret” and the apologies made (leaving aside for a moment the issue as to whether these amount to a strategic posture designed to staunch adverse consequences).
The sum of compensation sought by the Union has been duly paid. It is an objective fact that the Qantas Board commissioned the “Qantas Governance Review Report” (QGRR), which recommended changes to Qantas’ ways of working. This report is said by Qantas to show it “interrogating its decision-making processes and putting into place procedures to minimise the risk of Qantas again making a decision that is unlawful”; and the evidence demonstrates the implementation of its central recommendations.
Further, the Qantas Board reduced the discretionary bonuses for Messrs Joyce, David and Finch, who were each informed that they received lower remuneration outcomes “following consideration by the Board of the events which had a material impact on the business and reputation of Qantas in 2023” including, but not limited to, the outsourcing decision.
Additionally, Qantas reintroduced a role directed specifically to “build[ing] better relationships between senior management and Qantas employees”. Consistently with prevailing HR jargon, this was a position labelled: “Group Chief People Officer”.
After the appointment of Ms Walsh, albeit relatively shorty before this hearing, training has been provided to relevant individuals within Qantas explaining the judgments, the general protections set out in the FWA, and how to avoid contraventions.
I accept that since 2023 Qantas has, to a limited extent, been prepared to hold those in senior management responsible for their actions. Although those executives had been handsomely remunerated in the past and the Board response only came after significant adverse publicity and, I would infer, a recognition of public and shareholder disquiet as to a range of issues concerning Qantas.
This brings into focus the fifth and, to my mind, most important of the aspects of contrition referred to above. Does Qantas really intend to change its ways?
I will come to the evidence that was adduced at the penalty hearing relevant to this point shortly, but what is noteworthy is the evidence not adduced.
It seemed to me obvious that the person who could give the most direct and compelling evidence of corporate change and contrition was the present CEO, Ms Vanessa Hudson. Ms Hudson was, after all, uniquely placed to assist the Court in this regard. She is a very longstanding employee of Qantas. During the period leading up to the contravening conduct, Ms Hudson was Group Chief Financial Officer of Qantas and a member of its GMC. She was referred to by Ms Walsh as the person who wanted relevant change in industrial relations.
The GMC was comprised of the leading executives within the business and was described as an “executive decision-making forum”, was said to set “the broad strategic goals and parameters for the entire Qantas Group” and was the forum to provide feedback on risks and opportunities arising from proposals being considered for implementation, including the outsourcing proposal. At the GMC meeting on 29 May 2020, attended by Mr David and Mr Jones, Mr Jones made an oral representation to the effect the option of outsourcing was “superior” given the “open EBA 2020 DEC”. Indeed, Mr Jones “attend[ed] a number of relevant meetings and actively participated”.
In my liability judgment, I rejected the submission made by the Union that the GMC made the outsourcing decision. Having said that, it had a central role during this period, including in the discussion of legal and industrial relations risks. As a former member of the GMC who is now responsible for implementing reform, Ms Hudson was clearly in a position to explain why she thought things went wrong, how she formed the view she wanted change in the industrial relations area and what she has done personally to ensure, in the light of her accumulated knowledge and experience, that contravening conduct does not occur in the future.
It was asserted by Qantas that the intention of the new leadership and accountability is to: (a) learn from this mistake; (b) move on from it by fostering and implementing cultural change; and (c) change tack by taking responsibility for what happened. But whatever this new leadership and accountability means in concrete terms, it did not extend to Ms Hudson taking the step of entering the witness box and explaining, on oath, what she had learned from being involved as part of the senior management of Qantas when the outsourcing decision was made, any regrets she may have, and what, if anything, she now would have done differently when the outsourcing proposal (to use Qantas’ expression) was “socialised” with her and other members of the GMC.
Following the delivery of the CJ, Ms Hudson was recorded, in a document entitled “Qantas Statement on Ground Handling Compensation Judgment” as saying:
We sincerely apologise to our former employees who were impacted by this decision and we know that the onus is on Qantas to learn from this…
We recognise 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.
She also sent an email to the affected workers saying she recognised and apologised for the emotional and financial impact this decision may have had on you and your families and that she hoped “that through this compensation we can provide closure to those who have been impacted”.
Evidence given by Ms Hudson would likely have assisted in assessing the genuineness of these expressions of contrition. It strikes me that if one has regard to all the circumstances following the dismissal of the High Court appeal and the departure of Mr Joyce in September 2023, some affected workers might well have thought this apology and recognition that compensation “would provide closure” might sound somewhat hollow.
It should be recalled that on 14 September 2023, immediately following the High Court judgment, my Associate wrote to the parties concerning my proposal to make an order, at the case management hearing the following week, for the compensatory claims to be referred to mediation before the Honourable J L B Allsop AC, the former Chief Justice of this Court and asking the parties to obtain “instructions as to the identity of persons proposed by the parties to attend the proposed mediation”. Qantas agreed to the proposed order for mediation but instructed its counsel to submit that the in-house solicitor closely involved in the preparation of documents relating to the outsourcing decision and whose credit was in issue at the liability hearing, Mr Finch, represent Qantas at the mediation and that Ms Hudson, the then new CEO, not be required to attend. Over that opposition, an order was made that Ms Hudson attend.
The mediation failed and then came some further changes within the organisation, such as the arrival of Ms Walsh at the beginning of 2024 and the commissioning of the QGRR in October 2023. These sorts of changes are relied upon by Qantas to submit that little weight should be given to various statements made to the media by persons “no longer with Qantas” as they do not now reflect the new, changed culture at Qantas.
But despite all this, the culture at Qantas in April 2024 was such, that as noted above, shortly before the compensation hearing, and over the objection of the Union, Qantas raised for the first time an argument directed at denying any compensation to any affected worker. This was never explained other than by Ms Walsh saying, “the view at the time was the need to put all matters before the court for the court to determine”. But if there was real contrition and cultural change in April 2024 and Qantas was genuine about its “deep regret” and thinking and hoping compensation “can provide closure”, it strikes me as curious that Qantas decided, just before the hearing, to develop this argument, which would have served to prevent such “closure”. What changed about the importance of paying compensation to provide “closure” to workers post-April 2024 save for the fact that Qantas’ new argument was rejected?
Qantas did not have to instruct its lawyers at the compensation hearing to take such a course under its new post-2023 leadership, which is said by Qantas to embrace profound cultural change.
Returning to the evidence at this hearing, Qantas was represented by a formidable legal team: I infer the decision of Qantas not to call Ms Hudson was an informed and deliberate one. Of course, a consequence of this forensic decision was the absence of questioning by senior counsel for the Union as to the extent of her knowledge and involvement (as one of the members of the GMC) leading up to the outsourcing decision and other matters said to be relevant as to how Qantas has changed. It is one thing for the “Qantas News Room” to issue press releases by a CEO saying sorry; it is quite another for written assertions of contrition, recognition of wrong and cultural change to be tested in a Court room by senior counsel for a party submitting that Qantas is engaging in performative remorse.
Turning to the evidence eventually adduced, a further notable aspect of this hearing was that initially Qantas elected to foreshadow that it was not adducing any testimonial evidence going to contrition (as that concept is properly understood). It is passing strange that expressing contrition on oath or affirmation, was apparently not thought to be of relevance or importance to Qantas until prompting.
Going back to the issue as to whether Qantas is truly contrite or rather is engaging in performative remorse, I have hesitation in reaching a conclusion. Its conduct of the case and its public comments throughout the case gives reason for pause. Moreover, as the chronology indicates, Ms Walsh was only belatedly given the task of expressing contrition for events that occurred before she embarked upon her current role.
I accept that Ms Walsh is a sincere and competent professional who will do her personal best to prevent a reoccurrence of contravening conduct. As the person responsible for industrial relations, she now reports directly to the CEO. But given the extent of the cultural problem revealed by this case, I would have been much more persuaded of the genuineness of contrition if her evidence had been supplemented by a member of senior management who was present when the proposal was “socialised” and evaluated, and who explained why things went so wrong, how they have been converted to new ways of doing things, and how lessons have been learnt.
Time will only tell whether the undoubted good intentions of Ms Walsh will prevail. The scope of the task ought not to be underestimated. The strategy adopted by Qantas at the compensation hearing rather suggested an industrial relations culture that has very deep roots, despite high level representations of change following the departure of some key personnel in 2023.
In conclusion, it goes too far to conclude Qantas is now simply like Tartuffe; pleading virtue only when cornered and feigning contrition while harbouring no genuine regret. I do think persons of responsibility within Qantas do now have some genuine regrets, but this more likely reflects the damage this case has done to the company rather than either: (a) remorse for the damage done to the affected workers; or (b) concern it engaged in the contravening conduct (a finding it resisted until it could resist no more and has, on multiple occasions prior to this hearing, sought to explain away as representing no moral or ethical failure).
Corrective Action and Co-operation
It is here that one does see some indications of change.
A review of the QGRR released in 2024 demonstrates that its author, an “experienced business adviser” Mr Tom Saar, was satisfied it was produced following a “robust” process and believed Qantas has “an openness to feedback and reflection, and a commitment to achieve market or industry-leading practices in governance, culture and ‘ways of working’”.
Having noted this, it is worth remarking that in the “[k]ey recommendations and Qantas’ response” section of the QGRR, listed as one of ten “[k]ey events or root causes” that led to “a loss of trust amongst stakeholders [sic] in the 12 months prior to October 2023”, was Qantas “losing its appeal to the High Court against earlier Court determinations that Qantas’ outsourcing of ground handling services involving approximately 1,700 redundancies was unlawful”.
But it is far from clear to me that these identified aspects of the so-called “root cause dynamic” identified in the report were the cause, or at least the most proximate cause, of the contravening conduct. Perhaps understandably given its breath, it does not descend into any detail about how and why the contravening conduct occurred and the words “outsourcing” or “unlawful” do not appear in the document again.
Three or so of the ten enumerated “Improvement Themes” identified by Mr Saar might have some relevance in combatting the aggressive industrial relations and litigation culture evident in the making and later defending of the outsourcing decision, although they are expressed in such a Delphic way that it makes it somewhat difficult to tell (for example, “[c]oalesce around agreed Board and Management interaction norms (focused on sharing and collaboration, accountability and challenge, respect and support)” or “[c]ommit to more formal feedback mechanisms and development cycles covering skills and behaviours for both the Group Leadership Team and Board effectiveness”.
Having said this, the QGRR is not a superficial document and does provide some evidence of Qantas interrogating its general decision-making processes and committing to change and renewal.
Apart from the re-introduction of the role of Ms Walsh, there has also been significant change in personnel. As we have seen, the CEO has changed, as has the Chairman and the composition of the Board. A number of officers involved in the conduct have also left.
I accept that amongst the post-2023 management there is a desire for Qantas to be perceived as having changed, and for some generalised cultural change to occur. These are some not insignificant changes, and I am confident Ms Walsh has thought about how to foster cultural change. But when one looks at specifics, the Union understandably points to the ongoing involvement of those consulting with and advising Qantas during the period it engaged in contravening conduct in continuing to provide industrial advice.
If one returns to how “the issues in such cases should be considered in advance, and how litigation should be prepared for and run”, it is suboptimal a directed investigation has not taken place as to how the cultural approach to industrial relations (revealed graphically by the tone and content of the waived materials) arose, how it contributed to the proposed outsourcing decision being “socialised” with the GMC the way it was, and how the proposal came to be evaluated by persons who held the prohibited reason thus infecting the process.
The lack of directed enquiry to get to the bottom of how the contravening conduct occurred does not evince a real departure or shift from the longstanding attitude of Qantas that the “commercial” decision was made in the midst of an existential crisis, and there was no real failure or lapse worth commenting upon. The relevant “key event” or “root cause” that led to “a loss of trust” identified in the QGRR was Qantas “losing its appeal to the High Court” – not the underlying culture which led to the specific outsourcing decision being made in the way it was made in the first place.
Past Contraventions
Qantas is not a persistent flouter of industrial laws and, after recognising this reality, the amount necessary to secure specific and general deterrence is not affected one way or another by other instances where Qantas has been found to have acted contrary to the law.
Adverse Publicity
Qantas has received significant adverse publicity as to the unlawfulness of the conduct. Although the Union contends this not relevant, this submission cannot be accepted. The experience of the public criticism that Qantas has received is something that has obviously spurred the need to take some steps towards change and to present to the public that the culture within Qantas has changed. The experience of adverse publicity (and the obvious desire to avoid receiving more in the future) is a factor in favour of Qantas when it comes to specific deterrence.
Clarification of the Law
The litigation has clarified that it is unlawful to take adverse action to prevent the exercise of a workplace right, even if that right is not held at the time the action is taken. But an honest but mistaken understanding of the law concerning future workplace rights did not inform the contravening conduct (which would be very relevant to specific deterrence). The whole point was ensuring that the contemporaneous documents created a record which demonstrated that no consideration was given to preventing the exercise of any right whatsoever, irrespective as to whether it had crystallised.
CONSIDERATION OF QUANTUM OF PENALTY
First, as my findings indicate, the issues broadly described as contrition and culture (including the findings relating to the disparity issue) create a picture that is, at best, mixed.
I accept Qantas is sorry, but I am unconvinced that this measure of regret is not, at least in significant measure, a result of what the Full Court (Besanko, Wigney and Bromwich JJ) described as “the wrong kind of sorry”: see Kazal v Thunder Studios Inc (California) [2017] FCAFC 111; (2017) 256 FCR 90 (at 147 [167]).
Despite every effort being made by Qantas to select and insulate the putative decision maker; despite the efforts to ensure business records prevented any discoverable document being created which would undermine the narrative that its three imperatives were the sole motivation for outsourcing; despite engaging specialist lawyers at every stage of the process including having the solicitors and a barrister settle what was wrongly said to be a routine financial delegation document to reinforce the insulation of the CEO; despite the elaborate in-house bid process which, in truth, was never going to be successful; despite the inaccurate or incomplete public communications both before and after trial; and despite the incompleteness and lack of candour in the narrative presented by Qantas to the Court, sufficient aspects of the truth eventually outed.
But what is concerning for effective deterrence is that the result was not a foregone conclusion. It was only after the disclosure of the waived material, that the correctness of the finding that those assisting Mr David held the prohibited reason became self-evident. The finding was made at the liability hearing only because of standard discovery which revealed, among other things, the “voice over” document (a crack which let the light in) and because of a carefully prepared and thorough cross-examination.
As I noted in the introduction, Qantas accepts that it allowed the process to become too focussed on protecting any decision from a legal challenge, that the affidavits and other evidence at the liability trial did not present the reality in some respects, and “the question of conduct of the case is relevant”; it further submits the case has already been a “wakeup call for corporate Australia” including in how the issues in such cases should be considered in advance, and “how litigation should be prepared for and run”.
But how has this asserted recognition translated into action?
Giving full weight to the reality that there was (and is) no finding that Qantas engaged in deliberately improper conduct, at the risk of repetition, there is no evidence anyone within Qantas investigated how the process was able to become too focussed on protecting this decision from a legal challenge and why it was that a less than candid picture of what happened was placed before the Court.
The need for specific deterrence to ensure change does take place and takes root at Qantas is highly significant. The demands of general deterrence to other corporations (particularly large publicly listed corporations) is also centrally important and a penalty must reflect the public interest in ensuring, as Qantas submitted, that this case is, in truth, a real deterrent: a “wakeup” call on what the law is; on how the issues in such cases should be considered in advance, and how litigation should be prepared for and run.
Secondly, a factor of even more obvious importance, pointing to the necessity of deterring similar conduct, is the sheer scale of the contraventions; being the largest contraventions of their type, and the consequence it had for 1,820 affected workers (who were then denied compensation for a long period by reason of the subsequent conduct of Qantas).
Thirdly, a further factor pointing significantly in the direction of a penalty near the maximum is the extent of the financial advantage that Qantas sought to achieve by the contravening conduct. The anticipated savings were more than the quantum of the maximum penalty in the first year and were thought to be ongoing, and the penalty cannot be perceived as being anything like just a cost of doing business.
Fourthly, and related to the size of the anticipated benefit, is the size and financial standing of the contravenor. A very large penalty must be imposed as the imposition of a pecuniary penalty must involve a financial disincentive which encourages compliance with the law “by ensuring that contraventions are viewed by the contravenor and others as an economically irrational choice”.
Fifthly, the Union expressed concern that Qantas would (and be perceived to have) “gotten away” with something if there was no reinstatement. No reinstatement was ordered, but my present focus is on achieving real deterrence (including general deterrence to large public companies which might be tempted to “get away” with contravening conduct because the rewards may outweigh the downside risk of effective remedial responses, including eventual penalties).
Sixthly, the outsourcing decision was evaluated, recommended and made by senior management. It was not the work of a junior employee and, moreover, as I have explained, one of those involved deliberately avoided recording an aspect of his evaluation of the benefits of outsourcing. He knew this stratagem would present an incomplete picture in an important contemporaneous document when any outsourcing decision was challenged. This is redolent of a corporate culture that needs to change and needs further incentive to change.
Although I have mentioned some factors by way of emphasis in this summary, this does not mean that I have not considered all the relevant considerations. I have, and all the considerations identified as relevant by the parties and set out in detail in the judgment have been borne in mind.
The price on contravention in the present circumstances must be very large, but I must ensure the penalty is not greater than necessary to achieve the object of deterrence. Further, the process of instinctive synthesis must result in a penalty that bears some reasonable relationship with the maximum of $121,212,000.
Taking all relevant factors into account, a penalty of no less than $90 million appears necessary to achieve the objects of deterrence (slightly less than 75% of the maximum penalty).
RECIPIENT OF PENALTY
The issue then arises as to whom the penalty should be paid in whole or in part.
The Nature of the Discretion
Consideration of the question as to whom the relevant funds should be paid in the circumstances of this case must start with a detailed analysis of the nature of the power being exercised which is provided in the judgment.
There is no absolute rule, but generally, where, like here, there is a common informer, that discretion is exercised in favour of the person responsible for the bringing of the case.
But as I noted at the outset, this is the largest and most significant contravention of Pt 3–1 of the FWA (or its predecessor provisions) in over 120 years. Certainly, insofar as my research has discovered, the quantum of the penalty vastly exceeds any other penalty recovered by a common informer.
Payment to the Union Justified
The following factors militate strongly in favour of a substantial part of the penalty being paid to the Union:
(1) an arm of the executive government did not show any interest in investigating or prosecuting Qantas, and the Union, as a common informer, has alone borne the burden of prosecuting this litigation at first instance and on appeal;
(2) but for the Union commencing and prosecuting, Qantas’ contravening conduct would never have been exposed and it would never have been held to account for its unlawful conduct; hence the Union has brought to the attention of the Court a substantial and significant transgression of a public obligation by a powerful and substantial employer;
(3) the risks of the litigation are best assessed ex ante and without the distortion of hindsight bias – here, the risk was of significance in three ways: (a) success in the litigation on the merits, particularly before discovery, was far from assured; (b) the litigation was to be commenced against a well-resourced employer with substantial assets and financial resources at its disposal and, given the stakes, would have been anticipated to spend vast legal fees to defend its position; and (c) the drain of the Union’s resources by way of legal and related costs was reasonably anticipated to be highly significant;
(4) looked at ex post, the litigation has proven to be hard fought, and its prosecution has required not only the expenditure of significant resources but determination and skill; and
(5) the payment of a penalty to the Union, particularly a significant sum, would strongly incentivise it and other trade unions to bring prosecutions under the FWA, particularly against employers who have extensive resources to defend their position and interests; this may well operate to enhance the enforcement of the legislative scheme effected by the FWA.
Additionally, subject to a class of proposed recipients discussed below, there is no reason why it would serve to better advance the objects of the FWA or, more generally, be a more appropriate exercise of discretion, to pay a part of the penalty to another identified recipient.
Certainly, the Commonwealth assumed no burden in pursuing Qantas’ contraventions, it did nothing to initiate proceedings against Qantas (notwithstanding the Fair Work Ombudsman had standing).
Nor is there any basis to make a payment to any other organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth).
It is all well and good to enforce the law against those from whom relief is easily obtained or against those with finite resources preventing prolonged resistance. It is obviously simplistic to say the bigger the company, the bigger the employer; but large corporations with significant resources and access to an array of specialist industrial lawyers are often large employers. It is a formidable prospect to spend public funds taking on a fight against such a corporation, even if it was thought there were reasonable prospects of success. Industrial organisations, for a variety of reasons, may have a greater appetite for risk. Payment of a significant portion of the penalty to a common informer might increase the detection and prosecution of future contravening conduct by very large employers.
It does not assist the enhancement or enforcement of the FWA to only incentivise common informers to be “flat track bullies”, that is, to only bring proceedings where the risks are perceived to be minimal or only against those without extensive resources to defend their position and interests.
Given the order contemplated is not to be regarded as compensatory, some guide to appropriate quantum can be achieved by focussing on the relationship between risk and reward (linked, as this concept necessarily is, to incentive). It does not strike me as intuitively wrong that greater rewards might be appropriate in circumstances of greater risk.
In all the circumstances, the payment of at least a large part of the penalty to the Union is warranted. I am satisfied such a course will facilitate and promote both specific and general deterrence. It will send a message to Qantas and other well-resourced employers that “not only will they face potentially significant penalties for breaches of the [FWA], but that those penalties will be provided to trade unions to resource those unions to fulfil their statutorily accorded roles as enforcers of the [FWA] and to seek the enhancement of the terms and conditions of employment and the industrial interests of employees whom they represent”.
The Position of the Affected Workers
When it comes to the affected workers, the submission of the Union is that “they will be fully compensated for their individual loss and damage arising from the contravening” and that penalty amounts “are not intended to be compensatory in [sic] and there is no call for affected employees to be awarded penalties”.
But it is necessary to say three things about the submission of the Union as to the affected workers.
First, I do not accept the evidence establishes that the affected workers will necessarily be “fully compensated”. Indeed, as I explain in the judgment, the whole notion I can presently reach a conclusion all affected workers will be “fully compensated” on the material before me is highly problematical.
Properly analysed, the suggested “full compensation” figure relied upon by the Union is an aggregated amount Qantas was prepared to agree to pay, on a net present value basis, to quell each of these over 1,800 controversies without additional cost or other expense to Qantas, being an amount agreed to by the Union as being sufficient having regard to its role in this litigation. I am in the dark as to whatever enquiries the Union made, what analysis it undertook, and what other factors were considered, including whatever matters it was entitled to consider by reference to its own interests (given it had no fiduciary duties to affected workers in negotiating the settlement of the claim it was entitled to bring).
Secondly, it occurs to me that there may be a range of losses or expenses which would not have been incurred “but for” the contravening conduct but would not be part of a recovery under a discretionary order for statutory compensation.
By way of illustration, let us ponder the circumstances of one sacked, healthy and motivated 60-year-old man who very much wanted to continue work, had a mortgage and other living expenses to pay, a wife to support, and who still wished to provide some measure of financial support to his children. He wanted to remain a baggage handler until he was much older but cannot now secure such a role.
Perhaps by undertaking a course of vocational training, however, the sacked worker may be able to improve his lot by increasing his prospects of gaining employment in a quite different field. Although the training or related expenses he may incur (or may wish to incur) is not properly recoverable as statutory compensation, it is not presently evident to me that such a man is a less appropriate recipient of a small part of the penalty than the Union who has already been fully compensated and has separately been handsomely incentivised to act as a common informer. It is easy to imagine a range of similar circumstances.
Thirdly, Qantas submitted that if “the Court were to form the view that not all of the penalty should be paid to the [Union], the Court may consider that it is appropriate to award some of the penalty to the [a]ffected [workers]”. This is disputed by the Union. Recognising the prospect that things might come to this, I raised in advance of the hearing whether the Court should appoint an amicus curiae to provide submissions as to whether some part of the penalty should be paid to specified affected workers or some related “particular person”.
ORDERS
I will make an order that pursuant to s 546(1) of the FWA, Qantas pay a pecuniary penalty in the amount of $90 million.
Having regard to all the circumstances, I consider it appropriate that an amount of the penalty in a sum of $50 million be paid to the Union.
I will reserve, for later consideration, the making of further orders for the payment of the $40 million balance of the penalty. In this regard, there are real competing interests as between the Union and the affected workers (or at least some of them) and the prospect that informed my suggestion of appointing a contradictor to the Union’s submissions has now been realised.
I propose to list the matter for a further hearing to provide for final resolution of the payment away of the balance of the penalty.
JUSTICE M B J LEE
18 August 2025
