Economics

Qantas Slammed with the Largest Fine in Australian Corporate History

After four years of court proceedings, the airline giant was fined $90 million for over 1,000 illegal layoffs. Will their promise to do better in future hold any water?

Published

8 months ago

September 2, 2025

LJ Scandelli

Photo Source: Transport Workers Union Facebook

On August 18, the Federal Court fined Qantas $90 million for illegally outsourcing ground handling jobs and sacking 1,820 employees during the pandemic. The four-year-long court case sees the company facing the largest fine in Australian corporate history.

This is the culmination of events that began in 2020, when Qantas announced it would begin outsourcing 2,000 positions as part of its ‘Project Restart’ proposal. It was framed as an essential measure to ensure the company’s survival, saving Qantas $100 million a year. The Transport Workers Union (TWU) took action against the unlawful termination in 2021, filing a lawsuit with the Federal Court. Qantas made two separate appeals to the Full Court of the Federal Court and the High Court, but it lost both appeals.

‘Project Restart’ and the resultant redundancies coincided with the renegotiation of the enterprise agreement, which would have allowed workers to take lawful strike action. TWU accused Qantas’ decision of being at least partly motivated by a desire to pre-empt collective bargaining and protected industrial action.

Qantas was found by the court to be in full breach of the Fair Work Act (FWA), with the outsourcing constituted as “adverse action” against Qantas employees. It was fined three-quarters of the maximum penalty available. Justice Michael Lee has divided the fine, with $50 million going to the TWU and $40 million expected to be divided amongst the workers. Justice Lee expressed his hope that this payment will encourage other unions to pursue legal action against companies that breach the FWA, regardless of their size and power.

Qantas issued a statement not only accepting the $90 million fine but also agreeing to pay $120 million into a compensation fund. The airline claims it has worked hard to change the way it operates and is hoping to rebuild staff and customers’ trust in the company.

“We sincerely apologise to each and every one of the 1,820 ground handling employees and to their families who suffered as a result. The decision to outsource five years ago, particularly during such an uncertain time, caused genuine hardship for many of our former team and their families.” – Vanessa Hudson, Chief Executive of Qantas.

Despite the magnitude of the fine, Forbes Australia reported on August 25 that Qantas’ profits increased by 28%, reaching $1.6 billion in FY25. The total fines and legal fees the company had to pay amounted to roughly 13% of its annual profits. It was in light of this information that the union pushed for the agreed-upon maximum penalty of $121 million, or as close to it as they could reach. Qantas counterargued that the case has already served as a wake-up call for corporate Australia, and inflicting the maximum penalty would be ‘oppressive’. The fine that Justice Lee settled on was balanced to be in excess of the amount of money that Qantas saved with its ‘Project Restart’, so as to deter companies from accepting legal penalties as cheaper than remaining above-board in the first place.

Justice Lee slammed the company’s handling of the case in his reasons for judgment. He criticised Hudson’s absence from the stand during the hearings, as well as Qantas’ failure to produce adequate notes of business meetings held before the termination of its 1,800 employees. Justice Lee suspects that these were calculated moves to distance the decision from top management and the board, stating, “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.”

The decision is a landmark penalty for corporations in Australia and a trendsetting victory for Unions. Justice Lee hopes the ripple effect of this case will both lead to cultural changes for the airline and also serve as a cautionary tale for the rest of corporate Australia.