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After five years of failed appeals and obfuscation, Qantas has been fined a record $90 million for breaching industrial laws when it outsourced its ground crews. By Martin McKenzie-Murray.
‘Jetstar with a paint job’: Inside the $90 million Qantas fine
This week, Justice Michael Lee of the Federal Court issued his final judgement against a company once considered Australia’s pride. After years of hearings and failed appeals, Lee imposed on Qantas a penalty of $90 million – the most ever applied for a breach of industrial law in this country.
The penalty, the severity of which, explained Lee, reflected years of misleading evidence and dubious demonstrations of remorse by the airline, was imposed for Qantas’s illegal outsourcing of 1820 union ground-handling staff in 2020. Qantas had long argued it was a commercial decision made during the bleakness of early Covid; the court found it was made to purge unionised labour not long before negotiations were to begin on a new enterprise bargaining agreement, a time in which industrial action would become protected by law.
The case was brought by the Transport Workers’ Union (TWU) five years ago and was marked by spectacular discrepancies in the evidence Qantas provided to the court. For years the airline denied any wrongdoing and appealed, unsuccessfully, all the way to the High Court. “These were committed Qantas workers who had done nothing wrong and had loyally served this company, in many cases for decades,” the TWU’s national secretary, Michael Kaine, said this week. “They weren’t just sacked; they were told by Qantas that they were delusional for questioning it. This ruthless, self-interested and illegal calculation to kick them to the curb has rightfully merited the largest ever penalty of its kind.”
Justice Lee’s judgement took an hour to read. It is extraordinary in its detail. Lee described how Qantas had created a highly “artificial” forum for the decision-making – one that was not designed to adequately test for propriety but rather to protect the inevitable decision from future scrutiny. “Qantas accepted that it allowed the process to become too focused on protecting any decision from a legal challenge,” Lee said, “at the expense of more robust interrogation of the real reasons for the decision.” And: “This decision was lawyered from the start and up to the hilt. It was all structured in an artful and careful way designed to maximise the chance of Qantas being able to defend its decision in anticipated litigation.”
Parties to this decision-making were “quarantined” – paper trails were replaced with phone calls or verbal exchanges in person. Then chief executive Alan Joyce was almost entirely absent from any documents – a fact that gave the impression of his innocent detachment from the decision-making.
Only after the trial did further documents emerge that suggested Joyce’s involvement, a fact Lee lamented in Monday’s judgement. “I meant what I said in [an earlier judgement]: 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’ ... in the wake of the waived material provided to me after the [litigation judgement], I harbour doubts as to the conclusion I reached … as to Mr Joyce not being directly involved in the outsourcing decision ...”
This resembles the robodebt scandal – whereby transparent and good-faith scrutiny of policy proposals was replaced with a system given to post hoc rationalisations and reputational damage control. The bureaucrats who were there to ostensibly serve as clear-sighted scrutineers of policy, and to be awake to their own consciences and legal advice, instead became indentured to a rotten scheme.
Qantas, Lee said, “went to great lengths to paint a picture of internal agonising and studious assessment of the alternatives and detachment up until the eleventh hour, but I am unconvinced that this was the case”.
So damning is Lee’s judgement, so exhaustive the catalogue of illegality, misleading evidence and convenient amnesia, that this historic penalty might now seem inevitable. It wasn’t always, however; at least not in the minds of those who brought the case to court. They knew how difficult it was to win these cases, as they knew how careful Qantas was to avoid paper trails and how formidably the company cloaked its decisions with lawyers. “It was not a foregone conclusion,” says Josh Bornstein, one of the lawyers representing the union. “It was a gamble.”
One extraordinary feature of this case is the repeatedly incomplete provision of evidence by Qantas – something referred to by Lee as the “disparity issue”. Qantas’s initial submission of evidence in affidavits was exposed as grossly incomplete when additional evidence emerged via discovery and cross-examination. So startling was this discrepancy, and so insulting to the court’s integrity, that in earlier hearings Lee admonished Qantas’s counsel: “You can’t come along and run false cases in court.”
In this week’s judgement, Lee cited earlier judgements of his when he found that Qantas had provided the court with positively and materially misleading evidence. Of the “unimpressive” witness Paul Jones – then a senior Qantas executive – Lee said, “I am satisfied that Mr Jones was willing to fashion his evidence to suit what he perceived to be the forensic advantage of his erstwhile employer … I do not consider it safe to place any significant reliance upon his evidence.”
Jones is now Virgin Australia’s chief commercial officer, and was being considered for its chief executive position earlier this year before the TWU’s objections were reinforced by then federal workplace relations minister Murray Watt.
“The truth of the matter was never presented to the court at the trial,” Bornstein says. “After the trial further documents emerged. The court was given an insight into the dark art of union busting. In America, there’s a union avoidance industry. In Australia, it’s done with lawyers and it never sees the light of day. That’s what happened in Patrick’s in the waterfront dispute at the start of my career, but it was never interrogated, and here we got a little bit of a glimmer into what really happened – but only after the trial.”
Among industry observers, union officials and industrial relations experts there is a sense that the judgement still suffers from the opacity Qantas cultivated around its decision-making, as well as its submission of misleading evidence. Damning as the judgement is, it’s not exhaustive.
For decades, Qantas was a beloved brand and global byword for aviation safety. Through some parochialism, memorable marketing campaigns and its largely unimpeachable safety record, the airline was domestically celebrated for its professionalism and hospitality – a fact that largely survived its privatisation in the mid 1990s.
The outsized presence of Qantas in public life, and the grand claims it made about its symbiotic relationship with Australian virtue, was reflected on by Lee. The implication of his remarks was that the airline was both smug and hypocritical. “Qantas is a unique company,” Lee said. “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’ … The conduct of Qantas, to use senior counsel’s memorable phrase, revealed ‘an attitude of adamantine self-righteousness’.”
By the time of Alan Joyce’s premature retirement in 2023, the gloss was gone. “Look at the pre-Covid lionisation of Alan,” says one union official, who has represented airport workers in negotiations with the airline. “It was extraordinary. But the aura came off Alan and not because of this outsourcing. What mum and dad investors cared about was that Qantas had gone to shit. This luxury product had been gutted – it was Jetstar with a paint job. And what led to that was the ruthless outsourcing of jobs. He was given a Rolls-Royce, and then he nakedly stripped its parts, sold them and celebrated the profits. This was the ‘genius’ of Alan Joyce.”
In addition to the finding of guilt for illegal outsourcing, last October Qantas was ordered by the Federal Court to pay $100 million in penalties for selling tickets to flights they knew were cancelled – a practice that constituted misleading or deceptive conduct and which occurred for two years and affected almost 90,000 flights. The penalty was on top of an earlier order to compensate passengers the sum of $20 million.
“Qantas,” the Australian Competition and Consumer Commission said at the time, “admitted that it benefited from the conduct by obtaining revenue from consumers who may have chosen a cheaper Qantas flight or a flight with another carrier had they known their chosen flight had already been cancelled.”
In the time since Vanessa Hudson replaced Joyce as chief executive, the Qantas share price has doubled. Profits are increasing; so, too, capital expenditure. “It cannot lose as a quasi-monopoly,” one observer says. “The brand has gone to shit, but profits are still through the roof.”
In considering the size of the penalty he imposed this week, Justice Lee was obliged to consider the company’s contrition and, relatedly, its capacity for cultural reform. Its contrition, he thought, was not well demonstrated by the company’s publicity campaign throughout these years of litigation.
Lee drew attention to a pattern: lengthy, complicated and adverse judgements made against Qantas that were met with almost immediate and insouciant media releases that trivialised the findings. He also drew attention to a defiant and unapologetic interview Alan Joyce gave The Sydney Morning Herald in 2021. “We fundamentally disagree with the ruling, we’re going to appeal it,” Joyce told the paper.
“A further insight into Qantas’s public relations effort can be gleaned by its conduct immediately following the Full Court decision dismissing Qantas’s appeal … on 4 May, 2022,” Lee said this week. “The reasons of Justices Bromberg, Rangiah and Bromwich 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 … Qantas determined to issue a press release reasserting that it was solely motivated by ‘commercial reasons’.”
On the matter of contrition, Lee also lamented the absence of Hudson from the stand. Hudson first joined Qantas in 1994 and was Joyce’s deputy in 2020. She knew where the bodies were buried. Qantas lawyers did not want to assume the risk of submitting her to cross-examination.
“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 courtroom by senior counsel for a party submitting that Qantas is engaged in performative remorse,” Lee said. “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’s expression, was ‘socialised’ with her and other members of the GMC [group management committee].”
As for the future of Qantas’s corporate culture and its capacity for reform, Lee was gently sceptical. “The strategy adopted by Qantas at the compensation hearing was not reflective of regret and rather suggested an industrial relations culture that has very deep roots,” Lee said. “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.”
Tony Sheldon, a Labor senator for New South Wales and former national secretary of the TWU, was just as harsh. “What the public learnt is that, for Qantas, the truth was optional, and they did whatever they could to avoid accountability,” he told The Saturday Paper by email. “Justice Lee’s findings are damning and warrant the respect and reflection they’re due. There were fundamental discrepancies between the initial affidavits submitted by Qantas to the Federal Court and the subsequent evidence that emerged during the proceedings. That should concern every Australian. If a regular person gave misleading evidence in court, they’d face serious consequences.
“I’ve spoken with many of the staff affected by this decision – people who gave decades of their lives to Qantas and have spent the last five years fighting for justice. What they’ve endured has been nothing short of a living hell. This isn’t about retribution. It’s about making sure individuals in powerful corporations and the law firms that enabled them are held accountable for acting as though they were above the law.”
Qantas met the judgement with a press release, markedly different in tone from earlier statements. “Today’s judgement,” it said, “holds us accountable for our actions that caused real harm to our employees.”
This article was first published in the print edition of The Saturday Paper on August 23, 2025 as "‘Jetstar with a paint job’: Inside the $90 million Qantas fine".
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