20 September 2023
The High Court of Australia’s recent decision in Qantas Airways Limited v Transport Workers Union of Australia  HCA 27 confirms that an employer is prohibited from taking adverse action against an employee to prevent the exercise of a future workplace right.
Whilst significant, this decision does not suggest that employers should avoid outsourcing arrangements. Rather, it highlights that employers should carefully consider the decision to outsource and ensure that the reasons to outsource do not include preventing employees from exercising workplace rights.
On 30 November 2020, Qantas announced that its ground handling operations would be outsourced to third-party suppliers (outsourcing decision). As a result, thousands of Qantas Airways Limited (QAL) and Qantas Ground Services Pty Ltd (QGS) employees were made redundant (collectively, ‘Qantas’ employees’). Many of these employees were members of the Transport Workers Union of Australia (TWU).
At the time of the outsourcing decision, Qantas employees were prohibited from exercising their workplace right to engage in protected industrial action and enterprise bargaining (workplace rights). This was because the QAL employees’ enterprise agreement had not yet passed the nominal expiry date, and whilst the QGS employees’ enterprise agreement had passed nominal expiry, none of the procedural steps towards industrial action had been completed.
The TWU commenced proceedings in the Federal Court, alleging that the outsourcing decision was made to prevent employees from exercising their workplace rights, which contravened section 340(1)(b) of the Fair Work Act 2009 (Cth) (the Act).
A single Federal Court judge held that despite Qantas’ sound commercial reasons for the outsourcing decision, they failed to prove that the decision was not made to prevent affected employees from exercising their workplace rights.
Qantas appealed to the Full Federal Court. This appeal was dismissed and the primary decision upheld. Qantas then appealed to the High Court of Australia.
The central issue on appeal was whether Qantas, by terminating its employees at a time when they only had a future workplace right, breached section 340(1)(b) of the Act, which prohibits a person from “taking adverse action against another person to prevent the exercise of a workplace right.”
In support of its appeal, Qantas submitted a ‘broad’ and ‘narrow’ construction of section 340(1)(b) of the Act.
Qantas argued that:
The majority of the High Court rejected Qantas’ argument and dismissed the appeal. Whilst the High Court confirmed that Qantas had sound commercial reasons for the outsourcing decision, the airline also had additional reasons which contravened the Act.
The key findings from the High Court judgement are as follows:
If you have any questions or wish to discuss what this decision means for your organisation, please get in touch with our team below.
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.