Australian flag carrier Qantas intends to appeal a Federal Court ruling against the carrier over claims that it violated the Fair Work Act by unlawfully unloading its ground staff to outsource its ground handling function to contractors.

Claims by the Transport Workers Union of Australia (TWU) stress that Qantas’ decision to unload about 1,700 ground staff in November 2020, was to prevent future industrial action which was a violation of the Fair Work Act.

On July 30, 2021, the Federal Court accepted Qantas’s defense that the decision to outsource its staff was in response to the unprecedented impact of the COVID crisis, however, the court found that TWU’s claim against the airline which referred to the airline’s intention of outsourcing prior to the pandemic was not disproven.

Qantas disagrees with the court’s judgment, stating that prior to the pandemic the airline was recruiting new ground staff and investing in new equipment. The airline adds however, that the action taken to outsource its ground handling function was taken based on lawful commercial motives.

The use of specialized companies would allow the airline to save up to $100 million annually. Additionally, Qantas would save $80 million over 5 years, which would have been spent on ground handling equipment such as tugs and baggage loaders.

“The TWU has put forward its 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,” Qantas Group Executive John Gissing, said in a press statement from the airline. “The fact is, Qantas deals with the operational risk of industrial action on a regular basis given the 50-plus agreements across the Group. That risk pales in comparison with a pandemic that has grounded our fleet and our people for months, and has so far cost us $16 billion in revenue,” adds Gissing.

Qantas announced its plans in August 2020, to outsource its ground handling functions such as baggage handling and aircraft cleaning in response to the COVID-19 crisis. This would affect its staff at 10 airports.

The decision to outsource was made in November 2020 and it resulted in around 1,700 Qantas employees receiving redundancy packages. In March 2022, the handover of ground handling functions to external companies was completed.

“Qantas was motivated only by lawful commercial reasons, and this will be the subject of our appeal,” said Gissing.

“As part of its campaign, the TWU has been trying to discredit the safety of outsourced ground handling, despite the fact the long-term incident rate was double when this work was done in-house. That kind of behavior is hypocritical, and it undermines the strong safety culture that exists throughout Australian aviation,” adds Gissing

“The impact the latest lockdowns in Melbourne and Sydney have had on domestic travel shows why it was so important that we unlocked the structural savings from outsourcing the remainder of our ground handling.”

According to court proceedings, the TWU did not submit any applications for an injunction to halt any retrenchment and redundancy packages, which would need to be repaid in full if Qantas’ ground staff were to return to work