Qantas to Pay $120 Million in Compensation for COVID-19 Layoffs

A Qantas flight takes off at Tullamarine Airport on July 7, 2020 in Melbourne, Australia. Daniel Pockett/Getty Images

Qantas will pay $120 million (US$76 million) to 1,820 workers who were illegally outsourced at the height of the COVID-19 pandemic in 2020.

The airline has reached an agreement with the Transport Workers Union (TWU) on the total compensation amount, to be paid from early 2025.

This settlement follows a High Court judgement that upheld the outsourcing of baggage handlers, cabin cleaners, and ground support staff as unlawful.

In October 2024, Federal court Justice Michael Lee then ordered the airline to pay $100,000, $40,000, and $30,000 in three test cases related to the employment terminations.

At the time of the outsourcing, Qantas was dealing with financial impacts of the COVID-19 travel bans and lockdowns, which grounded the majority of its flights and cut revenue at the airline.

In a statement, Qantas said the compensation fund would be administered by Maurice Blackburn on behalf of the union.

“Final compensation amounts will cover both economic and non-economic loss, compensation to the TWU, as well as the costs incurred managing the distribution of the funds to individuals,” Qantas said.

“The fund will be established in early 2025, from which compensation will be paid directly to the former employees.”

The airline said it last update its estimated compensation and penalties from the case in its full year results in August 2024.

Further changes to this estimate will be provided to shareholders of Qantas in half yearly results for the 2025 financial year to be released in February. Qantas shares are rising 0.055 percent at the time of writing to $9.08 a piece.

Qantas CEO Vanessa Hudson apologised to the workers and noted the company had fast tracked the decision ahead of the holiday season.

“We know this has been a difficult period for those affected and are pleased we have been able to work closely with the TWU to expedite this process and resolve it ahead of Christmas,” she said in a statement.

“This is an important step in bringing closure to these individuals and I want to reiterate our sincere apologies to those impacted and their families.”

A separate hearing on penalties will be held in the future on a data at the discretion of the Federal Court, Qantas advised.

Qantas previously apologised to the former ground handling employees in Oct. 2024 following the court ruling on compensation.

Transport Workers Union Praises ‘Brave’ Workers

The Transport Workers Union said the funds would compensate workers for economic loss and hurt and suffering following a long legal battle.

The union noted Qantas had appealed the case all the way to the High Court before agreeing to the union’s proposal on compensation.

Transport Worker’s Union national secretary Michael Kaine said 1,800 former Qantas workers had been subject to four gruelling years of this court battle after being illegally outsourced.

“Soon these brave men and women will receive long-awaited compensation in accordance with the principles set out in the Court’s decision,” he said.

“They’ve stood by each other during what for some has been the most difficult times of their lives, through family breakdowns, financial stress and mental hardship.”

Kaine said delivering justice to these workers was just the first step turning Qantas around, adding “there’s still a long way to go to bring back the flying kangaroo.”

“It is encouraging new CEO Vanessa Hudson has agreed to establish a pool to ensure these workers receive justice, but we need to see a Safe and Secure Skies Commission put in place to ensure it can never happen again,” he said.

“These workers helped build the Spirit of Australia. Many worked decades, proud to play their part in delivering the safety and service standards that made Qantas a national icon.”

Qantas also dealt with strike action from hundreds of workers on Dec. 13, amid a dispute over pay with the Qantas Engineers Alliance.

The alliance is demanding a 5 percent annual pay increase, including a 15 percent pay boost in the first year to compensate for 3.5 years of wage freezes.

Qantas however, managed to get through the industrial action with very little disruption and the majority of flights arriving on time.

Further industrial industrial action could be on the way, the alliance warned, including a possible strike on Dec. 20.