The TWU claimed the case was the first successful challenge to major corporate outsourcing in 20 years © James D. Morgan/Getty Images
The TWU claimed the case was the first successful challenge to major corporate outsourcing in 20 years © James D. Morgan/Getty Images

How outsourcing was 'put on trial and lost'

30 July 2021

A union is claiming partial victory in a court case against Qantas after the company outsourced 2,000 jobs.

The Australian Federal Court found Qantas’ decision to dismiss workers and hire subcontractors was driven partially to prevent workers from demanding better wages and taking industrial action.

The decision to outsource workers left baggage handlers, ramp workers and cabin cleaners across 10 airports out of work, a total of 2,000 staff.

While Justice Michael Lee said the ruling was not a “test case” on outsourcing,  Michael Kaine, national secretary at the Transport Workers Union (TWU), said the decision was a “watershed moment for workers in Australia”.

“This ruling calls a halt to shifting responsibility for workers and outsourcing them onto third parties on a low cost, take-it or leave-it contract,” Kaine said.

A TWU survey found three-quarters of those who were let go by Qantas have been unable to secure full-time work since. 

The decision means outsourced employees could potentially regain their jobs or receive compensation, though the court has yet to rule on this.

Josh Bornstein, who represented TWU, said: “The Federal Court has found for the first time that a major employer has sacked over 2,000 workers because it was seeking to deprive them of the ability to collectively bargain with the company for a new enterprise agreement.

“It is also the first successful challenge to a major corporate outsourcing exercise in 20 years. We put Qantas’ outsourcing on trial and Qantas lost. Large companies have used outsourcing for decades to prevent employees from being able to collectively bargain with them.

“As a result, employees have lost the ability to obtain proper wage rises. Once Qantas outsourced its workers and sourced them indirectly from labour hire agencies, it did not have to bargain with ground staff again,” he said.

Qantas outsourced 90% of its groundwork operations, including workers at airports in Sydney, Melbourne and Brisbane, shifting them to external businesses including Swissport and dnata. Workers bid for their own jobs but Qantas rejected their bid in November.

Qantas denied any unlawful wrongdoing, and claimed the decision was financially motivated, saying it would save them $100m annually.

The company said in a statement: ​​“We recognise that this was a difficult decision that impacted a lot of our people but outsourcing this work to specialist ground handlers who already do this work for us in other cities across the country is not unlawful.”

Qantas plans to appeal the decision.

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