A judge on Monday (August 18, 2025) fined Qantas Airways 90 million Australian dollars ($59 million) for illegally firing more than 1,800 ground staff at the start of the COVID-19 pandemic.

The penalty is in addition to the AUD 120 million ($78 million) in compensation that Australia’s biggest airline had already agreed to pay its former employees.

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Australian Federal Court Justice Michael Lee said the outsourcing of 1,820 baggage handler and cleaner jobs at Australian airports in late 2020 was the “largest and most significant contravention” of relevant Australian labour laws in their 120-year history.

Qantas agreed in December last year to pay AUD 120 million ($78 million) in compensation to former staff after seven High Court judges unanimously rejected the Sydney-based airline’s appeal against the judgment that outsourcing their jobs was illegal.

The Transport Workers Union, which took the airline to court, had argued the airline should receive the largest fine available — AUD 12,12,12,000 ($7,89,69,735).

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Mr. Lee ruled that the minimum fine to create a deterrence should be AUD 90 million ($59 million), noting that Qantas executives had expected to save AUD 125 million ($81 million) a year through outsourcing the jobs.

Mr. Lee questioned the sincerity of Qantas’s apology for its illegal conduct, noting that the airline later unsuccessfully argued that it owed no compensation to its former staff.

“If any further evidence was needed of the unrelenting and aggressive litigation strategy adopted in this case by Qantas, it is provided by this effort directed to denying any compensation whatsoever to those in respect of whom Qantas was publicly professing regret for their misfortune,” Mr. Lee said.

“I do think that the people in charge of Qantas now have some genuine regret, but this more likely reflects the damage that this case has done to the company rather than remorse for the damage done to the affected workers,” Mr. Lee added.

“Qantas chief executive Vanessa Hudson, who was the airline’s chief financial officer during the layoffs,” said in a statement after Monday’s (August 18, 2025) decision: “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,” she said.

“Over the past 18 months we’ve worked hard to change the way we operate as part of our efforts to rebuild trust with our people and our customers. This remains our highest priority as we work to earn back the trust we lost,” she added.

Mr. Lee ruled that AUD 50 million ($33 million) of the fine go to the union, because no Australian government agency had shown interest in investigating or prosecuting Qantas.

“But for the union … , Qantas’ contravening conduct would never have been exposed and it would never have been held to account for its unlawful conduct,” Mr. Lee said.

“Hence the union has brought to the attention of the court a substantial and significant transgression of a public obligation by a powerful and substantial employer,” Mr. Lee added. A hearing will be held at a later date to decide where the remaining AUD 40 million ($26 million) of the fine will go.

Michael Kaine, national secretary of the union that represents 60,000 members, said he felt vindicated by Monday’s ruling (August 18, 2025), which ends a five-year legal battle that Qantas had been widely expected to win.

“It is a significant — the most significant — industrial outcome in Australia’s history and it sends a really clear message to Qantas and to every employer in Australia: Treat your work force illegally and you will be held accountable,” Mr. Kaine told reporters.

“Against all the odds, we took on a behemoth that had shown itself to be ruthless and we won,” Mr. Kaine added. Qantas has admitted illegally dealing with passengers as well as employees in its responses to pandemic economic challenges.

Last year, Qantas agreed to pay AUD 120 million ($78 million) in compensation and a fine for selling tickets on thousands of cancelled flights.

The Australian Competition and Consumer Commission, a consumer watchdog, sued the airline in the Federal Court alleging that Qantas engaged in false, misleading or deceptive conduct by advertising tickets for more than 8,000 flights from May 2021 through to July 2022 that had already been cancelled.

Published – August 18, 2025 11:30 am IST

Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), revealed that Qantas “admitted that it misled consumers” by advertising seats on tens of thousands of flights, despite the fact that these flights had already been cancelled. 

What is the issue?

Having long held the moniker “Spirit of Australia,” the national carrier Qantas found itself making headlines for all the wrong reasons over the last several months. The airline was accused of selling tickets for flights that were already cancelled. The scandal also extended to the company inadequately informing customers about these cancellations, and providing flight credits with expiration dates for trips affected by the COVID-19 pandemic. 

Allegations against Qantas included a delay in notifying ticket holders about cancellations, with an average notification period of 18 days for 10,000 flights. As a result, several consumers had to suffer through botched and inconvenient attempts at rescheduling, even resulting in financial loss for many.

As per the West Australian, the ACCC pursued Qantas through the federal court, alleging that the airline sold tickets for over 8,000 flights between May and June of 2022, despite these flights already being cancelled. 

At the time of the investigation, the airline was already faced scrutiny on multiple fronts, including criticism for exorbitant ticket prices, accusations of below-par service quality, and the controversial dismissal of 1,700 ground staff amidst the Covid-19 pandemic. 

When the accusations were first levelled, Qantas denied any wrongdoing 

Defending its decision to sell seats on cancelled flights, the airlines argued that  instead of purchasing tickets for individual seats, customers acquire a “bundle of rights” and a commitment from the airline to “do its best to get consumers where they want to be on time”. It may be noted that Qantas recorded an annual profit of $1.1 billion last year, marking a significant financial recovery following the turbulence in travel brought on by the pandemic.

ACCC investigation findings

At the end of the ACCC investigation, the airline acknowledged that it did indulge in such malpractices May 2021 and August 2023, a period that also coincided with the most severe stages of the pandemic. The ACCC described Qantas’ conduct as “egregious and unacceptable.”

As part of a settlement agreement between Qantas and the ACCC, 86,000  impacted customers will receive $13 million in compensation. The aforementioned $66 million fine is subject to approval from the federal court.

During a press conference, ACCC chair Gina Cass-Gottlieb stated that the commission opted to settle to sidestep “legal semantics” and emphasised the importance of prioritising customer reimbursement.

“In the interest of getting an early settlement and the additional payments and compensation to customers, we are no longer taking forward a requirement that they admit to a contravention of selling the service and receiving payment with no intention of providing the service,” Ms Cass-Gottlieb said, adding “It’s very interesting what legal semantics might be saying, what we consider as very important is that Qantas is admitting that it misled customers by continuing to sell tickets on flights they had already decided to cancel.”

Qantas’ explanation and plans for future 

While Qantas CEO Vanessa Hudson stated that the company did provide adequate support to customers, she added the airline intended to commence remediation efforts prior to court approval, The Chronicle quoted her as saying. 

“Today represents another important step forward as we work towards restoring confidence in the national carrier. When flying resumed after the Covid shutdown, we recognise Qantas let down customers and fell short of our own standards. We know many of our customers were affected by our failure to provide cancellation notifications in a timely manner and we are sincerely sorry. We have since updated our processes and are investing in new technology across the Qantas Group to ensure this doesn’t happen again. We are focused on making the remediation process as quick and seamless as possible for customers,” Ms Hudson.

She added, “The return to travelling was already stressful for many and we did not deliver enough support for customers and did not have the technology and systems in place to support our people.”

About the fine, ACC’s Ms Cass-Gottlieb said: “This $100m [Australian dollars] penalty, if accepted by the Federal Court, will send a strong message to Australian companies that they must comply with the Australian Consumer Law.