Full Judgement: Transport Workers’ Union of Australia v Qantas Airways Limited (Penalty) [2025] FCA 971 (18 August 2025)

By Dr Laura Sowden, Partner, Anna Ly, Senior Associate & Theresa Au, Lawyer

On 18 August 2025, the Federal Court awarded the Transport Workers’ Union $50 million out of the $90 million penalty judgment it ordered against Australian airline, Qantas Airways Limited for its largest and most significant contravention of Pt 3-1 of the Fair Work Act 2009 (Cth) in over a decade. The case reminds employers to comply with the FW Act when outsourcing work and to be aware, especially for larger employer corporations, that if a breach of the legislation is found, massive penalties may be ordered.

Overview

The procedural history of the court claim initiated by the Transport Workers’ Union (the Union) against Qantas Airways Limited (Employer) commenced in 2021 in the Federal Court of Australia (the Court). Since then, there have been several proceedings addressing the Employers liability, outcomes sought by the TWU including appeals,[1] prior to the recent penalty judgment proceedings (Penalty Proceedings).

In short, the substantiated breaches were that the Employer significantly contravened s 340(1)(b) of the Fair Work Act 2009 (Cth) by dismissing its employees to prevent their exercise of a workplace right to organise/engage in protected industrial action and participate in bargaining in 2021.[2] It was found the CEO decided to outsource the Employers’ ground handling operations works at several Australian airports to various third-party ground handling companies (Outsourcing Decision). This resulted in employees of the Employer and its subsidiary Qantas Ground Services Pty Ltd being dismissed.

1,820 workers were affected by the Outsourcing Decision resulting in a contravention of s 340(1)(b) in that quantity and in the Penalty Proceedings, the Court was required to assess and decide the appropriate penalties to order against the Employer.

Issue

The Court considered (1) what penalty should be imposed on the Employer for its serious contravention of the s 340 general protections provisions of the FW Act and (2) who the penalty should be paid out to.

The law and legal principles

Under s 546 of the FW Act:

• the Court has power to order payment of a pecuniary penalty on application if it is satisfied a person has contravened a civil remedy provision (in this case that is s 340(1)(b) of the FW Act);
• the Court must not order more than 5 times the maximum number of penalty units to a body corporate which at the time the maximum penalty was 300 penalty units at $222 per penalty unit per contravention;
• the Court can order that the penalty or part of it be paid to the Commonwealth, an organisation or a person.

In exercising its discretion, the Court considered:

• the contravention was a single decision but impacted 1,820 workers, and thus the maximum penalty amount was $121,212,000:
  • The outsourcing decision affected 1,820 affected workers (at the time of the contravention in 2021).
  • The maximum penalty per contravention was 300 penalty units.
  • Each penalty unit was valued at $222 i.e. the total penalty per contravention was $66,600.
  • $66,600 times the 1,820 per contravention equals $121,212,000.
• due to the scope and size, perceived financial benefits, and consequences of the contravention by the Employer, a minimum penalty of $90 million was necessary to specific and general deterrence;
• a pecuniary penalty is not compensatory in any way;
• a large part of the penalty should be awarded to the Union to facilitate specific and general deterrence as it would strongly encourage other trade unions to bring prosecutions under the FW Act against employers with deep pockets which may improve enforcement of and compliance with the FW Act;
• neither the Commonwealth nor any executive government agency played a part in the proceeding and despite the Fair Work Ombudsman having authority to investigate under the FW Act, no pre-litigation investigatory action was undertaken so the penalty should not be paid to them.

Decision

The Court imposed a $90 million penalty (just under 75% of the $121,212,000 maximum penalty that can be awarded against corporations) of which $50 million was to be paid to the Union.

The remaining $40 million will go into a trust fund for the Court to consider whether it should be used to further compensate dismissed workers or be allocated to the Union.

What does this mean?

Employers, especially those with a large work force should take care when making outsourcing decisions.

While outsourcing may present significant costs savings to the company, if they affect a majority of the workforce and the decision is for instance to avoid industrial action or negotiating an enterprise agreement then that will be a contravention of the FW Act.

In this case, it was only one decision from this employer to outsource work which affected close to 2000 employees. That decision contravened the FW Act and resulted in substantial penalties being ordered against it.

Employers should take care to ensure that any decisions that will significantly change their workforce are compliant with workplace law to defend itself against union-initiated proceedings. The massive penalty ordered here will encourage further unions and employee representatives to commence proceedings.

Contact

Dr Laura Sowden | Partner | Workplace Relations, Employment & Safety

+61 2 8035 7890 Direct | + 61 435 290 383 Mobile

[email protected]

 

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[1] See Qantas Airways Ltd v Transport Workers’ Union of Australia [2022] FCAFC 71; (2022) 292 FCR 34; Qantas Airways Ltd v Transport Workers’ Union of Australia [2023] HCA 27; (2023) 278 CLR 571; Transport Workers’ Union of Australia v Qantas Airways Ltd (No 2) [2021] FCA 1012; (2021) 308 IR 333; Transport Workers’ Union of Australia v Qantas Airways Ltd (No 4) [2021] FCA 1602; (2021) 398 ALR 124; Transport Workers’ Union of Australia v Qantas Airways Ltd [2021] FCA 873; (2021) 308 IR 244; Transport Workers’ Union of Australia v Qantas Airways Ltd [2024] FCA 1216; (2024) 334 IR 187; Transport Workers’ Union of Australia v Qantas Airways Limited (Order to Recall Witnesses) [2024] FCA 572.

[2] See Transport Workers’ Union of Australia v Qantas Airways Ltd [2021] FCA 873; (2021) 308 IR 244 (Liability Judgment) and Transport Workers’ Union of Australia v Qantas Airways Ltd [2024] FCA 1216; (2024) 334 IR 187 (Compensation Judgment).