Back in November 2020, as borders slammed shut and air travel collapsed, Qantas Airways made a brutal call: it would outsource its last in-house ground operations at 10 airports. More than 1,800 baggage handlers, cleaners and ramp staff were cut.
Management pitched it as survival. The airline was bleeding cash, and outsourcing promised $100m in annual savings plus $80m in avoided capital expenditure. But the Transport Workers’ Union (TWU) called it something else: union-busting. The timing was no accident, they argued. Enterprise agreements were about to expire, opening the door to strikes and new bargaining. By outsourcing during the pandemic lull, Qantas could sideline its unionised workforce before that window reopened.
The stage was set for one of the most consequential workplace cases in decades.
The First Ruling
A Landmark Win
The first shot came in July 2021, when Justice Michael Lee of the Federal Court sided with the TWU.
He found Qantas had breached the Fair Work Act’s adverse action provisions. Even if Qantas had “commercial imperatives” for the decision, they weren’t the whole story. Qantas had failed to discharge the reverse onus required by the Fair Work Act - it could not prove that preventing collective bargaining or industrial action was not a “subtantial and operative reason” in its outsourcing decision.
Justice Lee was satisfied that the Fair Work protections could extend to a future workplace right. That made it the first time an Australian court had ruled that mass sackings were unlawful because they were designed to suppress collective bargaining.
Courtroom Cast
The scale of the dispute was matched by the firepower on both sides, with some of the country’s most prominent silks and firms drawn into the fight.
The union’s case was run by Maurice Blackburn, led by principal Josh Bornstein, a veteran of high-stakes employment battles. Bornstein described Qantas as the country’s “fiercest legal opponent”. Across the 5 years of litigation, the TWU briefed some of the nation’s most prominent silks. At first instance in the Federal Court, Mark Gibian SC appeared with Philip Boncardo. By the appeals, Noel Hutley SC joined the team, lending heavyweight credibility more often seen in commercial and constitutional disputes. Hutley stayed with the case through the High Court and penalty phase, consistently pressing the point that Qantas’s conduct called for a penalty of the “highest order”.
On the other side, Herbert Smith Freehills Kramer marshalled Qantas’s defence, also rotating a formidable line-up. In the Federal Court, it relied on Neil Young KC, Richard Dalton KC and Matthew Follett. At the Full Court appeal, Bret Walker SC, Thomas Prince and Naomi Oreb took over. For the High Court and penalty proceedings, Qantas brought in Justin Gleeson SC, a former Solicitor-General known for his appellate skill. They fought hard, arguing that future rights shouldn’t count, and later pushing for a moderate penalty. None of it stuck.
Culture on Trial
Beyond the dollars, Justice Lee’s judgment tore into Qantas’s corporate culture.
He noted a “sense of disquiet” about how the decision was made. Former CEO Alan Joyce’s name was conspicuously absent from the paper trail. Internal documents appeared “fashioned” in a careful way to keep him at arm’s length, raising suspicions that evidence had been sanitised to shield him from accountability.
Qantas also chose not to call Hudson, its new CEO, as a witness at the penalty hearing. Instead, it put forward a lower-level executive. As Hutley SC put it, that smacked of “choosing a person who couldn’t be the subject of true investigation.”
And while Qantas claimed remorse, Lee wasn’t convinced. He labelled it “the wrong kind of sorry” — more about damage to reputation than guilt for the harm done to workers.
Appeals All The Way Up
Qantas jumped on appeals immediately, issuing a press release saying that it would appeal Lee’s decision before it had time to read the 400-paragraph judgment.
The Full Federal Court dismissed the appeal in May 2022. Then, in September 2023, the High Court delivered the final blow: a unanimous ruling against Qantas. The High Court’s ruling is now the definitive precedent, settling once and for all that even future workplace rights are protected under the Fair Work Act. An employer can’t act today to stop workers exercising rights tomorrow.
Compensation and Closure
The TWU had initially sought an injunction to reinstate the outsourced workers, but the court declined to do so. Instead, Justice Lee directed that the case move to the next stage: determining compensation and penalties.
With liability settled, the focus shifted to remedies. Justice Lee oversaw “test cases” to assess lost wages and emotional harm, with workers describing depression, anxiety and medication triggered by the sudden loss of careers. In December 2024, Qantas and TWU agreed to a $120m compensation fund — one of the largest in Australian employment law — averaging $30k to $100k per worker.
Then came the penalty. On 18 August 2025, Justice Lee fined Qantas $90m — the largest ever imposed under Australian labour law. Lee calibrated the fine at 75% of the maximum to ensure it wasn’t dismissed as just a “cost of doing business.”
“Courts won’t tolerate blatant attacks on workers’ rights”
Yet even after more than $200m in fines and compensation, Clayton Utz industrial relations lawyer Dan Trindade noted that Qantas is still financially better off. The outsourcing saved the airline around $580m over 5 years. Trindade says “even with compensation, even with penalties likely to be added on top of that, and legal costs, Qantas are going to come out ahead.”
Transport Workers’ Union of Australia v Qantas Airways Limited [2021] FCA 873
Qantas Airways Ltd v Transport Workers’ Union of Australia [2022] FCAFC 71
Qantas Airways Limited v Transport Workers Union of Australia [2023] HCA 27
Transport Workers’ Union of Australia v Qantas Airways Limited (Penalty) [2025] FCA 971